Expensive New Plants Pinch Japanese Car Companies : Autos: Planned years ago, the facilities are coming on line during an industry slump.
It’s spacious, more pleasant for workers, highly automated--but a pricey investment to repay in Japan’s slumping automobile market.
Nissan Motor’s new Kyushu assembly plant was designed several years ago, when the car market was strong and interest rates low. But Nissan and other Japanese auto makers are facing bills now for high-priced plants that are coming on line as sales are sagging.
“We would be very unlikely to begin building such a plant now,” says Kazutaka Kobatake, general manager of production engineering at Nissan, Japan’s No. 2 car maker.
Kobatake says Nissan spent close to 1 1/2 times as much on its “Dream Factory” on the southern island of Kyushu than it would have on a traditional plant.
The plant has some revolutionary features. Nissan eliminated the conveyor belt throughout the assembly process, substituting a string of independent dollies that glide along at different speeds. At each work station, the dollies adjust automatically to a height that reduces bending and reaching by workers.
To make work easier, computer-controlled lights over part bins tell workers which parts to install, and robots take over the most unpleasant or difficult assembly tasks.
Body welding is fully automated, while the hard-to-automate final assembly area is 20% robotized, up from the usual 5%, Nissan says.
The $780-million plant boosts the capacity of Nissan’s Kyushu manufacturing facility by 240,000 vehicles--to 600,000 per year--while requiring only 20% more workers.
In recent years, Japanese auto makers have invested unprecedented levels of capital in the construction of highly automated plants because of strong demand and worker shortages caused by Japan’s declining birth rate and the difficulty of attracting affluent Japanese to factory jobs.
But car sales in Japan fell last year for the first time in 10 years--by 3.9% to 5.74 million vehicles--and operating profits dropped more than 60% at some car makers.
Toyota has decided to hire no part-time workers for the first time in 14 years and to roll back production of luxury cars at its new $606-million Tahara plant, where it is operating only one shift.
Honda reportedly has decided to shut down its Suzuka line for three days, while Mazda is ending the night shift at its new Hofu plant.
The auto industry, which accounts for 20% of all Japanese manufacturing investment, is slashing spending.
“From a 30% growth in capital investment in fiscal 1990, investment is likely to fall by about 10% this year,” says Andrew Blair-Smith, an auto analyst at UBS Phillips & Drew.
“They were lured into higher levels of capital spending than seems now to be wise because of low interest rates and unprecedented car sales,” he says.
