travelnutz
West Michigan - On the Lakeshore
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From the Newspaper:
Chrysler matches Toyota in U.S. productivity
Posted by Rick Haglund | Detroit Bureau June 05, 2008 10:05AM
Categories: Breaking News, Business, Statewide News
DETROIT - Chrysler LLC has become as productive as Toyota Motor Corp. in the two automakers' U.S. manufacturing operations, a much-watched study shows.
Chrysler and Toyota each used 30.37 hours of assembly, stamping, engine and transmission time to build a vehicle last year, according to the annual Harbour Report North America 2008, released this morning.
In addition, General Motors Corp. for the first time beat Nissan Motor Co in the total number of hours needed to build a vehicle. GM used 32.29 hours of labor to build a vehicle, compared with 32.96 hours for Nissan.
Ford used the most labor hours among the top six automakers in the United States, using 35.1 hours to build a vehicle.
Despite their labor productivity improvements, all three Detroit automakers lost money before taxes on a per vehicle basis in the first nine months of 2007, according to Harbour. That's largely due to a decline in the sales of high-profit trucks and SUVs.
Chrysler lost $412 per vehicle, while GM lost $729 per vehicle. Ford's per vehicle loss was $1,467.
Nissan and Honda Motor Co. earned $1,641 per vehicle last year, while Toyota earned $922 per vehicle.
Overall, the labor productivity gap among the top six automakers reached its narrowest point in the 28-year history of the Harbour study, which is now owned by international consulting firm Oliver Wyman.
Greater labor productivity is important because the money saved in manufacturing can be used to design and market more attractive cars and trucks.
Ron Harbour, a partner in Oliver Wyman's North American automotive practice, said Chrysler's strong showing was in part due to the fact that Toyota builds more of its own parts and components. Chrysler purchases more components and subassemblies from suppliers, cutting internal labor costs.
Nevertheless, Harbour said productivity improvements by the Detroit Three were impressive, considering steep production cuts that could have boosted labor hours per vehicle.
"Improving productivity in the face of lower production is a huge accomplishment, especially with the pressures created by rising gas prices," Harbour said.
He attributed the Detroit Three's productivity improvements to more efficient manufacturing processes and the buyouts of tens of thousands of autoworkers.
Still, the top three Japanese automakers enjoyed at $606 per vehicle labor-cost advantage over the Detroit Three last year.
Harbour forecasts that gap will shrink to $97 per vehicle as the cost savings from last year's labor contract agreement with the United Auto Workers union are fully realized.
The most productive assembly plant in the United States was Chrysler's Toledo South plant, which makes the Jeep Wrangler.
Chrysler's Detroit Jefferson North plant, which makes the Jeep Commander and Jeep Grand Cherokee, ranked eighth. It was the only Michigan assembly plant ranked in the top 10.
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larry barnhart
wenatchee. wa usa
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I just read the jeep has the most problems of all the cars. chevman
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Kenneth
Washington, the state
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Quality ratings by brand
Jeep, Dodge, Chrysler all get 2 "quality circles." Don't buy these brands...just lease. Buy ones with higher quality ratings.
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travelnutz
West Michigan - On the Lakeshore
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Kenneth,
In reply to you rating's post. Not a knock at the following vehicles but a simple observation I've seen and so does the various rating services as reported in their print/Internet web sites.
Jeep, Dodge, and Chrysler vehicles and a couple others have consistently been the lowest rated or near the lowest rated vehicles for all the years I've watched the "JD powers" ratings as well as the other "respected" rating services. Obviously, as has been constantly discussed, is the deep lack of public confidence in the various product rating reports published by "Consumer Reports". Seems they've lost their way! Some buyers don't pay any attention as to how one vehicle compares to another within the same approx model type/size/features and price range competition. You should expect and demand much better quality/features etc when you pay 1 1/2 to 2 times the price for the same model type/size/feature vehicle as the mid priced range and less quality/features when you only pay 1/2 to 3/4 of the mid priced range. Where you really see the big dollar difference is in the USED book values (trade in, wholesale, private party, loan values, etc) but, by then it's too late! You have what you have and it will only sell for so much! Might there be a reason the higher rated vehicles seem to hold their value longer than the lower rated vehicles? You may also note how low the Mini (Cooper) rates and it's a very expensive vehicle for it's size. Poor!
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8.1 Van
Millstone NJ
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Quote:Despite their labor productivity improvements, all three Detroit automakers lost money before taxes on a per vehicle basis in the first nine months of 2007, according to Harbour. That's largely due to a decline in the sales of high-profit trucks and SUVs.
Chrysler lost $412 per vehicle, while GM lost $729 per vehicle. Ford's per vehicle loss was $1,467.
Nissan and Honda Motor Co. earned $1,641 per vehicle last year, while Toyota earned $922 per vehicle.
If Chrysler ,GM and Ford lost that much per vehicle in the first nine months of 2007 then 2008 should be a record year for loss per vehicle for them.
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RetiredbutWorking
Central Texas
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I wonder why the old big three loose money on the vehicles they make. Is it because they are stuck with an entrenched labor force that will not work as productivly as the Japanese firms? Just wondering!
RBW
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travelnutz
West Michigan - On the Lakeshore
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RetiredbutWorking,
The big 3 have so many decades of being under very expensive union contract agreements, high labor cost per vehicle to manufacture, along with extremely high legacy costs (retiree pensions and their health insurance costs etc) that the Japanese etc implants don't have yet but will be beginning to have in the not too distant future also. Will be a different story then but that doesn't help now! The foreign implants also had started with TOTALLY NEW plants designed to make to vehicles they are producing today, not 20-50 years ago. The "Big 3" are awash with very old and poorly designed plants for today's type of vehicle manufacture and assembly. You may note that GM has just shut down 4 of it older and less efficient plants as it's an opportune time to do so. Also, go to all the dealers new vehicle lots and showrooms you can find and note what percentage of all the vehicles you can see have their major components (engines/transmissions/etc)built in the U.S. or Canada within the vehicle. Component percentages are stated on a label on the vehicle's window that's required by law but I have noticed some un-named dealers have removed them when they put them into the showroom. It's a real eye opener for origin. Don't take the percentage of just one model but rather look at and write down where which components are made and the vehicle is assembled for each manufacturer's complete model lines. You'll understand better where our jobs have gone!
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Hannibal
Gas Station
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Once again, the highest paid employees on the payroll blaming the lowest paid employees on the payroll for the high cost of labor. My truck was built in Mexico using ultra low wage non-union labor. It's still losing. Must not be the cost of labor. No small fuel efficient "desirable" cars as gas prices rise? That's where management dropped the ball, not union members. The new Focus is bordering on desirable. Time will tell.
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surveyorjp
Missouri
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I knew this would turn into another "bash Dodge" thread. 
I guess if the clueless have nothing better to do, so be it.
Meanwhile my Dodges continue to provide excellent service despite what all the non Dodge owners out there spout. I guess I got lucky for the last 15 years.
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Hannibal
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My Dodge has 1.7 problems for every 1 problem a Tundra has. Considering I've replaced one condenser fan motor in three years and almost 85k miles and not even a hint of another problem, the Tundra must "almost" have a problem. There's not enough difference in quality to write a book about but, statistics can be shaped to split hairs and look like monumental differences.
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