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NINETY EIGHT REGENCY

Big 3 Efficiency Up

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Big 3 Efficiency Up

By Drew Winter

Ward's AutoWorld, Jul 1, 2007 12:00 PM

It seems like it's the same headline every year from the “Harbour Report”: Asian auto makers are the most efficient producers in North America, but Detroit's Big Three are “closing the gap.”

That is the story again this year from the annual study of auto manufacturing productivity, with Toyota Motor Corp. leading the top-six North American producers in productivity this year, followed by Nissan Motor Co. Ltd. and Honda Motor Co. Ltd.

But 2007 still represents major progress for General Motors Corp., Ford Motor Co. and Chrysler Group.

GM, in fact, had three of the four most-efficient plants in North America in vehicle assembly, engine and transmission production, losing out only to Honda for the most-efficient stamping facility.

Detroit's Big Three have whittled down what once was a crippling $1,500 manufacturing cost disadvantage to $300 or less says Ron Harbour, president of Troy, MI-based Harbour Consulting Inc., the creator of the report.

Harbour says that decline, which does not include so-called legacy costs such as health care and retirement benefits, means Detroit's competitive woes now are not caused by factory floor problems as they once were.

Harbour says recent buyouts of thousands of workers and more competitive labor agreements should lead to even more productivity gains.

While a Detroit auto maker has never bested Honda, Toyota or Nissan in overall productivity in North America, GM essentially has caught up with Toyota in assembly plant productivity, Harbour says. GM's assembly plant productivity rose 1.2% in this year's report while Toyota's declined 3.3%, in part because of several major product launches.

“Considering they will be building vehicles in 2007 with dramatically fewer employees in the U.S., GM, Ford and Chrysler likely will reduce their hours per vehicle significantly,” Harbour adds.

Of course, Asian auto makers were not standing still. Even though its productivity slipped from last year, Toyota still led North America's top six auto makers in overall manufacturing productivity, with 29.93 hours per vehicle.

Also, Chrysler's new Global Engineering Mfg. Alliance engine plant in Dundee, MI, faired well in the study, ranking third in the top-10 engine plants.

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September's UAW negotiations can't come soon enough.

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