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Harbour: Detroit Closing Productivity Gap

June 7, 2007

Toyota is the most productive automaker operating in North America, according to the latest in a long-running series of studies on factory efficiency, but the Big Three U.S. automakers are quickly closing the gap, the Car Connection reports. Detroit's gains are coming on so quickly that, with recent moves to slash the workforce and gain workplace concessions from once-intransigent unions, the Big Three may soon outpace their Japanese rivals - a trend that Ron Harbour , president of Harbour Consulting, says should is good news for consumers, as well as shareholders. Underscoring that transformation, Harbour noted that for the first time ever, a single manufacturer - General Motors - operated three of the four most efficient plants in North America, taking the lead in assembly, engine and transmission production. Honda, meanwhile, took the productivity award for most efficient stamping plant. As recently as 2002, the gap between most efficient and least efficient was more than eleven hours. That translated into a cost advantage for the best Japanese makers of $800 to $900 a vehicle, said Harbour, while the gap has now narrowed to just "a couple hundred dollars." Like other industry insiders, Harbour said he'll be closely watching contract talks between the Big Three and the United Auto Workers, which begin in July. The troubled U.S. makers are expected to push for concessions aimed at reducing costs and further improving productivity.
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