U.S. automakers improved productivity at their North American plants last year but still trail their Japanese rivals, a closely watched annual survey reported yesterday.
Because labor is 12 percent to 17 percent of the manufacturing cost of a new vehicle, the Harbour Report is widely followed by manufacturing experts and Wall Street. A UAW worker's labor hour at General Motors Corp., for example, runs $62.78, once benefits are accounted for.
The annual report shows General Motors, Ford Motor Co. and DaimlerChrysler posted better ratings in 2002 but their Asian rivals still held the top four spots. Japanese car makers "continue to set the course for designing and developing simple, low-cost manufacturing systems that produce high quality and highly sought vehicles in North America," said Ron Harbour, president of Harbour Associates, based in Troy, Mich.
Mitsubishi Motors climbed past Nissan and Honda to rank No. 1 in vehicle assembly efficiency, but the top ranking carried several asterisks. One was that Nissan was more efficient but was excluded from the company rankings because its Mexico plant did not provide information for this year's survey.
Nissan averaged 16.83 worker hours per vehicle in 2002 at three assembly plants that participated in the survey vs. 21.33 hours at Mitsubishi's plant in Normal, Ill.
Another asterisk was that Mitsubishi has only one North American plant, and other high-ranking manufacturers have multiple plants, from five for Honda to 32 for General Motors.
Rich Gilligan, chief operating officer of the Mitsubishi plant, acknowledged that it was No. 2 based on the numbers but said the plant produced five models on its mile-long assembly line last year, the most of any North American plant. Three were Mitsubishi cars and the others were Chrysler and Dodge cars.
In assembly plant rankings, Nissan's Smyrna, Tenn., facility posted the best rating ever in the Harbour Report, with 15.74 labor hours per vehicle.
GM's Oshawa, Ontario, No. 1 and No. 2 plants, which build midsize cars, ranked second and third in plant productivity. Ford's plant on the south side of Chicago was fourth for the third straight year.
Among manufacturers, Toyota was third at 21.83 hours per vehicle, Honda fell two spots to fourth and GM was fifth, the only domestic manufacturer to exceed the industry average of 25.23 hours per vehicle. Toyota and Honda also did not include all of their plants in this year's survey.
Honda's productivity slipped 12.6 percent from 2001 because some of its plants were being reconfigured to build new models and the flow of imported parts was interrupted by the West Coast longshoreman dispute last fall.
GM reduced the labor hours per vehicle by 7.4 percent to 24.44 and was the most efficient domestic manufacturer for the second straight year.
Ford improved 2.7 percent to 26.14 hours, and DaimlerChrysler improved the most of any manufacturer, 9 percent. DaimlerChrysler still had the highest number of hours per vehicle among major manufacturers, with 28.04.
While the domestic companies have improved, the Harbour Report gives Japanese brands a cost advantage of about $400 per vehicle because they pay workers less and get higher productivity.
Rick Popely and Jim Mateja are reporters for the Chicago Tribune, a Tribune Publishing newspaper.