June 11, 2004

Nissan’s Tennessee assembly plant most productive in North America

Detroit, Michigan – North American automotive manufacturers made significant gains across their manufacturing operations in 2004, according to The Harbour Report North America 2004, the annual study released on Thursday by Harbour Consulting. However, it was Nissan’s assembly plant in Smyrna, Tennessee, which produces the Altima, that set the benchmark for productivity. General Motors plants in Oshawa, Ontario were number two and three respectively. Oshawa Car Plant Number 1 produces the Chevrolet Monte Carlo and Impala passenger cars. Plant Number 2 produces the Buick Century, Buick Regal and Pontiac Grand Prix passenger cars and has begun production of the new Buick Allure.

The Harbour Report, which was first published in 1989, measures assembly, stamping and powertrain productivity performances – plant by plant, and company by company – for North American automotive manufacturers. The hours per unit measure calculates the total salary and hourly labour content required to assemble one vehicle.

Among assembly plants, Nissan’s Altima operation in Smyrna, Tennessee, again was tops in labour productivity, and established a new standard for labour hours per vehicle (HPV) with a measure of 15.33. Smyrna broke its own mark of 15.74, which was established last year.

“Nissan Smyrna has consistently been at or near the top of the assembly rankings,” said Ron Harbour, president of Harbour Consulting. “Once again in 2003, Smyrna found ways to improve its performance, and take its assembly operation to a higher level of productivity.”

In overall productivity, all six of the companies with assembly, stamping and powertrain operations in North America – Chrysler, Ford, General Motors, Honda, Nissan and Toyota – showed improvement in 2004, led by the 7.8% overall gain for The Chrysler Group. The surge in productivity enabled Chrysler to pass Ford in overall productivity for the first time in report history, even though Ford achieved an overall 3.4% improvement. Chrysler improved 7.2% in assembly productivity, 8.5% in stamping productivity, 9.5% in engine productivity and 9.2% in transmission productivity.

Honda, General Motors and Ford also improved their measures across all manufacturing segments. Honda had an across-the-board 7.1% improvement, GM had a 5.2% gain and Ford improved 3.4%. GM’s gain was particularly noteworthy because the company has improved its total HPV 25% over the last six years, and each segment achieved 5% or more gains in 2003.

“The Harbour Report highlights the efforts every automaker in North America is making in the areas of lean manufacturing, continuous improvement and other manufacturing activities that drive down costs and drive up quality and productivity,” said Ron Harbour. “Manufacturers that are using disciplined, common processes to drive consistent, sustainable improvement are seeing the most progress in the report’s measures.”

This year, only the companies that fully participated with all of their North American plants were included in the company rankings (plant rankings continued to include all participating plants). Nissan was not included in the company rankings because its operations in Mexico and Canton, Miss., did not participate in the report measures. Honda and Toyota also were not included in the rankings. Honda’s Alliston #1, Alabama and Mexico plants did not participate in this year’s report, nor did Toyota’s assembly plants in Princeton, Ind., and Cambridge North, Ontario.

Among the seven companies that fully participated in the assembly segment, GM was second to NUMMI with a 23.61 HPV measure, as 25 of 30 GM plants improved their labour productivity measure, including five that had double-digit percentage improvements and seven with gains of 5% or more. After Smyrna’s benchmark-setting performance, GM operations had the next four spots on the top 10 list of assembly operations in Oshawa #1, Oshawa #2, Lansing M and Lansing C. GM also had four of the 10 most improved plants, led by Flint, which was the most improved plant in the report with a 30% gain in its HPV measure. And GM plants led eight of the vehicle segments.

“GM’s story has been much the same for the last seven years,” said Laurie Harbour-Felax, Harbour Consulting vice president. “GM’s solid progress is the result of lean product and process design, development of common systems and processes, and a strong focus on quality and throughput.”

Five of the seven companies improved their productivity performance in the 2004 report, including AutoAlliance, the joint venture between Ford and Mazda in Flat Rock, Mich., which posted a 10.2% gain in labor productivity. However, Mitsubishi, which led the company assembly rankings a year, fell to third place after a 19.2% degradation in HPV as plant volume dropped drastically. Low vehicle volume also was the major cause of a 19.5% degradation in HPV at CAMI, the joint venture between General Motors and Suzuki in Ingersoll, Ontario.

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