Auto Industry Levels Productivity Playing Field
According to The Wall Street Journal:
Detroit's massive job cuts in the past two years have leveled the playing field for the Big Three auto makers and all but eliminated the substantial labor-cost advantage their Japanese rivals once enjoyed, according to a closely watched scorecard on auto manufacturing.
In 2007 Chrysler LLC and Toyota Motor Corp. were tied for the top spot in plant productivity in North America, the Harbour Report found. On average both companies required the same number of labor hours -- just over 30 -- to assemble a vehicle and major components like the engine and transmission.
General Motors Corp. needed about two additional hours to produce a vehicle, and Ford Motor Co. needed 3.5 more hours, meaning their labor cost per vehicle was no more than $260 higher than Toyota's. Honda Motor Co. ranked slightly behind Chrysler and Toyota, and just ahead of GM. Nissan Motor Co. was behind GM and slightly ahead of Ford.
The rankings represent a dramatic turnaround from years ago when the North American plants of the Japanese auto makers were far more efficient than Detroit's. "From a productivity standpoint, there is almost near-parity," said Ron Harbour, a partner at Oliver Wyman, the consulting firm that publishes the report. The Big Three "have never seen that before," he added.... click to continue.
