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Tuesday, October 31st 2006

15:33

Automotive Manufacturing Productivity

Harbour Consulting produces their Harbour Report North America on the productivity of Automobile manufacturing in North America every year. This year shows the gap between the automakers is narrowing.

One of their key measurements that Harbour uses is the Hours per Vehicle. This year's numbers ranged from 28.46 hours at Nissan to 35.82 hours for Ford. This is the smallest gap between manufacturers yet. For a thought provoking discussion about whether this is a good measure of profitability, see Dan Slater's editorial about Quality and Productivity from Manufacturing & Technology News.

The two most productive assembly plants belong to Ford (Atlanta GA) and GM (Oshawa Ont.). Ironically both of these plants are scheduled to be closed in the next 2 years. The reasons behind this have more to do with the capacity utilization of the North American plans with Ford at 79% and GM at 90% utilization. Toyota is running at 106% utilization with the other manufacturers in between. With the announced plant closings Harbour estimated that GM will be at 105% and Ford at 113% utilization.

Even more interesting than the total utilization is the range for individual plants. GM ranges from 23% utilization to 143% utilization, Ford is 33-138%, and Daimler/Chrysler 43-132%. Compare this to Toyota's 97-109%, Nissan at 89-107%, or Honda between 78% and 100% utilization. Is Toyota's planning that much better? Is GM too saddled with restrictive union work rules and old facilities? What do you think?

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