GM Passes Ford in Plant Efficiency for First Time
General Motors Corp. surpassed Ford Motor Co. in auto manufacturing efficiency last year, while Nissan Motor Co. remained the most efficient auto manufacturer in the U.S. for the eighth straight year, according to a respected annual report on automotive productivity released Thursday.
It was the first time GM ranked ahead of Ford in efficiency since the Harbour Report began studying auto plants in the U.S. in 1989, and is the latest good news for GM, which has been improving in the last year in quality, profitability and market share.
Nissan was followed by Honda Motor Co., Mitsubishi Motors Corp. and Toyota Motor Corp. in average assembly efficiency in terms of hours required to build a vehicle.
Nissan scored 17.92 hours per vehicle versus 19.78 hours for Honda and 21.82 hours for Mitsubishi.
GM, Ford and Chrysler Group trailed the major Japanese manufacturers, but closed the gap, a key step for GM to increase profitability and for Ford and Chrysler to get back into the black.
GM, the world’s largest auto maker, improved 6.8% in efficiency to 26.1 hours per vehicle in 2001, and for the first time had one of its factories win the title of most efficient plant in North America.
GM’s Oshawa No.1 plant in Ontario, Canada, which assembles the Chevrolet Impala and Monte Carlo, displaced Nissan’s assembly factory in Smyrna, Tenn., which produces the Altima sedan, Frontier pickup truck and Xterra SUV.
GM’s performance “is a direct result of the company’s commitment to building a strong foundation in lean manufacturing,” said Ron Harbour, president of Harbour & Associates in Troy, Mich., which publishes the report. “At long last the company’s systems and processes are paying off in improved quality, higher productivity ... and lower costs.”
Nissan’s Smyrna plant lost its most-efficient status because of the changeover to a newly redesigned model of the Altima mid-size sedan and thus the slip was expected, said Harbour Vice President Laurie Felax.
“Nissan is very, very strong but launched a vehicle, and when you’re in a ramp-up your number takes a negative hit,” Felax said. “We’ll probably see them come back next year to better than before the launch.”
It was the eighth straight year that Nissan was the most efficient auto manufacturer overall, leading the continuing Japanese dominance of automotive productivity.
The Japanese are pioneers of lean production, relying on just-in-time delivery of parts to minimize expensive inventory, ergonomically designed work stations designed to reduce wasted movement, and workers who perform numerous tasks at once.
“The best Japanese transplants tend to build their production systems from the [worker] out: They focus on making the most of the [workers’] time and effort, not to waste it,” said John Shook, a former Toyota lean production team member and now an automotive manufacturing consultant in Ann Arbor, Mich.
Mitsubishi improved its productivity 8.6% to surpass Toyota and become the third most efficient auto maker.
Mitsubishi started a turnaround plan in 1999 that included eliminating jobs and streamlining production at its plant in Normal, Ill.
Honda was the most efficient auto maker for engine production, followed by Toyota.
Toyota was No. 1 in stamping efficiency.
Honda had the highest profit per vehicle last year at $1,661, followed by Nissan at $1,289 and Toyota at $1,182, the Harbour Report said.
It said GM had a marginal profit per vehicle of $337, while DaimlerChrysler lost an average $1,679 per vehicle and Ford lost $1,913.
