• Understand the health of the auto industry
• Gain insights to future productivity trends
• Will the Japanese threaten big 3 profits?
• How did the downturn of the end of 2000 effect performances?

The 12th annual Harbour Report, which is produced by Harbour and Associates Inc., measures assembly, stamping and powertrain productivity, plant by plant, and company by company, for auto manufacturers in North America.

Japanese automakers once again were the most productive of all auto manufacturers in North America, while General Motors’ plant performance is moving closer to rival Ford Motor Company.

GM showed the most progress of any company in the 2001 report. Ford was still the leader among the Big 3 U.S. automakers.

Nissan Motor Co., which took top honors for the seventh straight year, led all 10 companies in the report in overall productivity. The company’s Smyrna, Tenn., operation was the top plant in both the car and truck segments.

The edge the Japanese companies hold over GM, Ford and DaimlerChrysler translated to a cost advantage of $500 to $700 per vehicle. If the Big 3 was as efficient in all their plants as Nissan was in its Smyrna factory, they would need 95,000 fewer workers.

The cost advantage will become critical as Toyota, Nissan and Honda expand production of minivans, pickups and sport utilities in North America, putting more pressure on the sizable profit margins the Big 3 have relied on from those models.

Nissan is building a truck plant in Mississippi, Honda is getting ready to ramp up production of minivans in Alabama and Toyota will soon build luxury sport-utilities in Canada.

What happens when supply catches up with demand? The margins go down and the one with the best product wins. But to put features in your product, you have to stop wasting money in lost productivity.

The trend could already be seen in profit per vehicle made in North America. While the Japanese manufacturers had increased profits from North America in the past three years, the Big 3 had seen steep declines. In 1999, DaimlerChrysler’s U.S. arm made $1,487 per vehicle; in the first quarter of 2001, the automaker lost $1,875 per car or truck.

ABOUT THE SPEAKER

Ronald E. Harbour is President of Harbour and Associates, Inc. Since 1983 Ron has been involved in a broad range of projects involving every major automotive manufacturer in North America, Europe and the Far East. Although primarily automotive focused, the Harbour organization has also helped a variety of non-automotive manufacturers in the improvement of cost, quality and productivity. Ron’s work has included factory operations improvements, new product development, investment and product cost reduction, product teardowns, strategic planning, competitive analysis and plant assessments. Ron is also one of the principal authors of The Harbour Report, in North America and Europe. In addition, Ron is a regular contributor to numerous newspapers and publications and authors a monthly article for Car Connection, an on-line automotive magazine. Ron is a member of the board of directors of the Society of Automotive Analysts and two tier one automotive suppliers.