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American car manufacturers are steadily catching their Japanese rivals in hourly productivity as vast redundancy programmes have cut the manpower time required for each new vehicle to leave US factory gates.
Restructuring efforts by Ford, General Motors and Chrysler have made production sharply more efficient in terms of time – although experts stressed that American manufacturers remain disadvantaged by payroll and healthcare costs.
Figures published recently by Detroit-based Harbour Consulting found that Toyota overtook its Japanese compatriots to become the most efficient manufacturer, turning out vehicles in 29.93 hours to Honda’s 31.63 hours and an estimated 29.97 for Nissan, which declined to take part in the study.
But all three of the US manufacturers gained ground.
General Motors cut its time by 2.5 per cent to 32.36 hours, Chrysler improved by 2.4 per cent to 32.9 hours and despite coming last, Ford shaved 1.9 per cent off its rate to 35.1 hours.
The study’s author, Ron Harbour, said that on a key measure of assembly, GM had drawn level with Toyota.
He said the American firms’ performance was particularly strong given their shrinking market share.
He said: “Improving productivity in the face of lower production is a huge accomplishment, but none of the manufacturers can afford to let up.”
Over the past year, GM and Ford have announced 79,000 job cuts in an attempt to stem ballooning losses.
Chrysler’s parent company, Daimler, last month lost patience and sold the US car making business to a private equity firm, Cerberus.
David Cole, chairman of the US Centre for Automotive Research, said that although productivity progress is evident, Detroit car makers face a crucial bargaining session this summer to renegotiate collective agreements with the UAW auto workers’ union. “It’s the 500lb gorilla in the room which can’t be ignored,” said Cole. “The challenge is absolutely huge.”
“If we see a transformational deal with the UAW, then they’ll be making real progress. If not, I have real doubts about the long-term future,” he added.
By Andrew Clark
