Toyota Tops In Efficiency

Toyota tops in N.American plant efficiency: study

May 31, 2007

DETROIT (Reuters) - Japan's Toyota Motor Corp. had the most efficient North American manufacturing plants in 2006, an annual benchmark survey released on Thursday showed.

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Sign up for: Globe Headlines e-mail | Breaking News Alerts But the gap in productivity among the six major North American automakers continued to narrow, as quality advances and more-flexible labor agreements drove improvements, according to the Harbour Report, released by Harbour Consulting.

Last year, Honda Motor Co. Ltd. showed the biggest improvement of 2.7 percent in combined assembly, stamping and powertrain operations, the report said.

In overall productivity, General Motors Corp. , Honda, DaimlerChrysler AG's Chrysler Group and Ford Motor Co. showed improvement in 2006.

"General Motors essentially caught Toyota in vehicle assembly productivity," Ron Harbour, president of Harbour Consulting. "Considering that they will be building vehicles in 2007 with dramatically fewer hourly employees in the U.S., GM, Ford and Chrysler likely will reduce their hours per vehicle significantly."

Harbour Consulting measures productivity at North American plants, calculating the labor hours needed to make vehicles.

Ron Harbour said lower production time equated to a cost advantage of about $200 to $300 for Toyota over Ford, which trailed all of the surveyed automakers.

Japan's Toyota led in 2006 by producing a vehicle in 29.93 labor hours, on average, followed by Honda, which took 31.63 labor hours.

Productivity improved for each of the Detroit-based automakers over 2005, but they still trailed Toyota and Honda.

GM trimmed total production hours per vehicle by 2.5 percent in 2006 to 32.36 hours. Chrysler improved 2.4 percent in 2006 to 32.90 hours across its assembly, stamping and powertrain plants. Ford productivity improved 1.9 percent, but it placed last at 35.10 labor hours.

Nissan Motor Co. Ltd. did not participate in this year's report, but