Toyota is tops in new Harbour manufacturing report

Automotive News
May 31, 2007 - 10:16 am Toyota was the top-ranked automaker in the 2007 Harbour Report on manufacturing in North America, with a combined 29.93 labor hours per vehicle. That score covers stamping, engine production, transmission production and vehicle assembly.

General Motors plants were ranked at the top of three of those four categories.GM's Oshawa, Ontario, No. 2 plant was top-ranked in vehicle assembly; the Spring Hill, Tenn., plant was top-ranked in engine production; and the Toledo, Ohio, plant was top-ranked in transmission production.

Honda's Marysville, Ohio, plant was top-ranked in stamping.

The gap in productivity among the six major North American automakers continued to narrow as quality advances and more-flexible labor agreements drove improvements, according to the report.

Honda Motor Co. Ltd. showed the biggest improvement this year of 2.7 percent in the combined assembly, stamping and powertrain operations, the report said.

In overall productivity, GM, Honda, the Chrysler group and Ford Motor Co. showed improvement in 2006.

"General Motors essentially caught Toyota in vehicle assembly productivity," Ron Harbour, president of Harbour Consulting, said in a statement. "Considering that they will be building vehicles in 2007 with dramatically fewer hourly employees in the U.S., GM, Ford and Chrysler likely will reduce their hours per vehicle significantly."

Harbour Consulting measures productivity at North American plants, calculating the labor hours needed to make vehicles.

Productivity improved for each of the Detroit-based automakers over 2005, but they still trailed Toyota and Honda.

GM trimmed total production hours per vehicle by 2.5 percent in 2006 to 32.36 hours. Chrysler improved 2.4 percent in 2006 to 32.90 hours across its assembly, stamping and powertrain plants. Ford productivity improved 1.9 percent, but trailed all of the surveyed automakers at 35.10 hours.

Nissan Motor Co. Ltd., which has long been among the top-ranked companies in the report, did not participate in this year's report, but Harbour estimates it took 29.97 hours to build a vehicle last year.

All three Detroit automakers are in the midst of shutting plants and cutting jobs in North America as they restructure operations. On a combined basis, they are closing more than two dozen plants and cutting over 80,000 jobs in North America.

By closing plants in the next two years, all three should improve capacity utilization, the report said.

While production times narrowed among the automakers, big gaps remained in profitability, however.

Toyota and Honda each earned an average pre-tax margin of more than $1,200 on vehicles sold in North America. In contrast, Chrysler lost $1,072 per vehicle, while GM lost $1,436 and Ford lost $5,234 per vehicle in 2006.

The losses reflected a variety of factors, including the large difference in health care and pension costs, as well as rebates and low-interest-rate financing, the report said.

Reuters contributed to this report.