Domestic Automakers Improving in Production Efficiency
by: Wahlberg
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Word Count: 653
For the past couple of years,
Detroit’s automakers have took up 16 labor hours longer than their Asian rivals
in building vehicles in North America. And that difference is being reduced to
minutes attributed to the shrinking efficiency gap between domestic and
Japanese automakers. Last year the gap shrinks to a tremendous level according
to a closely watched study of labor productivity.
Although at present there are
no domestic automakers that manage to topple down Nissan Motor Co., Toyota
Motor Corp., and Honda Motor Co., -- t maker of top-of-the-line Honda exhaust--from
the top of annual Harbor Report but in fairness to the Detroit’s big three they
have been posting improvements and that is a good sign, according to people
familiar with the report.
Among the domestic automakers
it is General Motors Corp. that has improved the most starting from 2005 to
2006 followed by Chrysler Group and finally Ford Motor Co. On the other hand
the Asia automakers are headed by Honda that posted the biggest overall
improvement while Nissan and
The Troy-based Harbor
Consulting, which publishes the report, will release the data they have
gathered to show how the car companies fared. This report especially the one
pertaining to the automotive factory performance is important since it is
widely used by automakers as a competitive benchmarking tool. The most
significant figure on the report is the average number of labor hours needed to
build a car or truck as it travels through an automaker’s stamping, engine, and
assembly plants.
For that category alone the
ranking of the overall productivity is expected to be similar to last year,
when the Asian automaker (Nissan, Toyota, and Honda) were at the top followed
by Detroit’s big three (General Motors, Chrysler, and Ford) in which Ford
ranked last for the second consecutive year.
The domestic automakers have
made steady gains in efficiency when they started cutting down jobs, idled
plants, and negotiated operating agreements with the United Auto Workers Union.
Ford has so far been successful with getting favorable deals with more than
three dozen of its union locals. On the other hand, General Motors is still
pushing for an agreement and have been meeting opposition in the process.
Improvements empowered the Big 3
Foreign carmakers have observed
that their average productivity has either stay roughly the same or has
slightly increased especially when they started building larger vehicles which
are labor intensive.
Meanwhile domestic automakers
still need more total labor hours per vehicle than their foreign rivals that is
despite reports that they have lessen the gap between them and their Asian
rivals.
Factors causing the gap in efficiency
One of the factors seen to be
affecting production efficiency are the plants. Foreign automakers have newer
plants and are designed to accommodate more flexible manufacturing processes
them obviously more efficient explained Rebecca Lindland, a Global Insight
analyst in
For the 2005 report, it was
Chrysler that recorded the highest level of improvement among the
The data also ranks the
efficient plants in terms of labor hours per vehicle and the figure is derived
by adding up all hours worked for salary and hourly pay together with the
overtime, downtime, and paid lunches, and then dividing that by the total
number of vehicles produced.
About the Author
Ally Wahlberg is a Computer Information Systems specialist. Ally leads an active lifestyle and he is a fan of extreme sports. He is also a car enthusiast and writing about his interests is one of his passions.
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