Japan shows skill at American auto plants

By Rick Popely
Tribune staff reporter
Published June 10, 2004, 1:14 PM CDT

Despite gains by the three domestic auto manufacturers, Japanese companies remain more efficient at building cars and trucks in North America, a closely watched annual study reported today.

Nissan requires the fewest labor hours per vehicle, followed by Honda and Toyota, according to the Harbour Report.

General Motors for the third straight year was the most efficient domestic manufacturer and the only U.S. automaker below the industry average of 24 hours to assemble a vehicle.

The report by Harbour Consulting of Troy, Mich., measures labor hours required in 2003 to build a single vehicle. Harbour rates vehicle assembly and gives an overall score that includes stamping operations, engine and transmission production and assembly.

For the second year in a row, Harbour did not include Nissan, Honda and Toyota in the overall rankings because they did not report on all their North American plants.

In vehicle assembly, the Japanese continued to outpace the domestic Big Three.

Nissan led with 17.26 hours per vehicle, Honda was second at 20.65 and Toyota third at 20.69. Honda's productivity improved 7.3 percent and Toyota's 5.2 percent as both rebounded from 2002, when adding new models slowed production.

GM cut its labor hours for assembly by 5 percent, to 23.61 per vehicle. Ford Motor Co. improved 2.7 percent, to 25.44, and the Chrysler Group improved 7.2 percent, to 26.01.

When stamping operations and engine and transmission production were included, Chrysler ranked ahead of Ford for the first time in the study's 15-year history. Chrysler needed 37.42 hours per vehicle overall and Ford 38.6.

Ford is adopting a lean, flexible manufacturing system at its plants that it says will yield annual productivity gains of 4 to 6 percent. Four of Ford's 20 North American plants have it, and the Torrence Avenue plant on Chicago's South Side adds the system this summer.

GM has cut its labor hours by 25 percent since 1998 and said it has its sights set on Toyota, the largest Japanese manufacturer.

Guy Briggs, group vice president for manufacturing, said GM has improved at a faster pace than Toyota the last six years and intends to catch the largest Japanese manufacturer, though he wouldn't predict when.

"We know we have to continue to improve and at a more rapid rate than they do to catch them," he said. "This is a must-do, no-choice situation."

Ron Harbour, president of Harbour Consulting, said future improvements by GM and other manufacturers may not be as large from year to year because the easy changes have been made.

"Future improvements will probably be more incremental because they've already picked the low-hanging fruit," he said. "But there's still improvement to be made by every company."

Among individual assembly plants, Nissan's Smyrna, Tenn., facility that builds the Altima sedan set a new benchmark at 15.33 hours per vehicle, breaking a record of 15.74 it set in 2002.

GM had the next four most productive plants: Oshawa, Ontario, Nos. 1 and 2, which build midsize cars; and two in Lansing, Mich., that make compact cars.

Ford's Torrence Avenue plant, which had ranked fourth three years in a row, fell to sixth. Ford reduced production of the Ford Taurus and Mercury Sable 27 percent last year because of declining sales.