DETROIT - General Motors and Chrysler have steadily improved productivity in recent years. But they still must slash overtime, says the latest Harbour Report on North American automakers' productivity.
The report says that high use of unscheduled overtime by GM and Chrysler substantially raised their production costs.
Based on data from the fourth quarter of 1997, Chrysler ranked last in manufacturing productivity, taking an average of 32.2 worker hours to assemble a vehicle. GM was next to last with an average of 30.3 hours.
The most efficient North American manufacturer, Nissan, led at 17.1 hours per car, almost 47 percent better than Chrysler.
Chrysler's efficiency was hurt by new-vehicle launches at three plants. Chrysler's average hours per vehicle could have been as low as 28 if it had been running at full capacity, said Ronald Harbour, president of Harbour and Associates Inc., which publishes the report.
Even so, Chrysler and GM numbers are higher than the competition.
Ford also uses a lot of overtime, but it is mainly scheduled overtime to build more vehicles, Harbour said. 'Ford is pretty effective in getting what they're planning on getting in an eight-hour shift,' he said.
Ford used an average of 23.0 assembly hours per vehicle.
Despite being North America's most efficient vehicle maker, Nissan is not the best overall. It ranks near the bottom in pretax income per vehicle. Chrysler's pretax income per vehicle is higher than that of Honda and Toyota, the report says.
Nissan has quality and efficiency, but its sales are not impressive, said Jim Harbour, chairman of Harbour and Associates. 'They just don't have the products for this country,' he said.
Chrysler, on the other hand, has the products. Plus, Chrysler is the world's most efficient car and truck developer, saving it about $500 per vehicle, Jim Harbour said. Reliance on suppliers to develop and build parts saves Chrysler a lot.
Chrysler's low labor productivity is partly explained by its manufacturing strategy. It uses less automation than others, which cuts down on capital investment, said Chrysler spokesman Dave Barnas.
According to the Harbour Report, if Chrysler's plants were as productive as Nissan's, Chrysler would save $2.1 billion a year (which works out to $781 per vehicle in 1997) and need 25,527 fewer workers.
General Motors, which usually comes last on the Harbour Report's productivity list, would save $4.4 billion per year if it reached Nissan's efficiency level, and it would need 54,915 fewer workers.
GM is larger and more vertically integrated than any other North American automaker. When it tries to boost productivity by eliminating assembly plants or vehicle lines, it meets resistance from the UAW because the union staffs the assembly plants and often its parts operations.
Ford made crucial changes during the 1980s and now ranks high in most Harbour Report categories. The automaker has four of Harbour's Top 10 car assembly plants and eight of the Top 10 truck assembly factories.
GM has only two of the Top 10 car plants, and none of the Top 10 truck factories.
Ronald Harbour expects GM to improve on the truck side when the company launches its redesigned full-sized pickup platform this year. Since GM released its last redesigned truck in 1988, the rest of the industry has come a long way in designing easy-to-assemble vehicles, he said.
However, GM's numbers next year also are likely to be hit hard by the current strikes in Flint.