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Study: GM tops Ford in productivity

DETROIT, June 13 (UPI) -- General Motors Corp. surpassed Ford Motor Co. in overall manufacturing productivity for the first time, posting a 4.5 percent improvement in hours per vehicle and 6.8 percent jump in vehicle assembly productivity, according to the Harbour Report North America 2002 released Thursday.

Nissan, Honda and Toyota continued to lead in overall productivity and profitability but two of the Big Three -- GM and DaimlerChrysler -- narrowed the productivity gap.

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The eighth Harbour Report analyzed overall assembly productivity of 10 companies that make cars, trucks, vans and SUVs in North America. Nissan, which assembles the Altima, the Xterra sport-utility vehicle and the full-line of Frontier pickups at its plant in Smyrna, Tenn., led the pack, setting the benchmark as the most efficient auto manufacturer in North America for the eighth consecutive year.

"Manufacturing efficiency is an important key to being a successful automaker, as are product durability, quality engineering, pleasing performance and, of course, an attractive design," said Emil Hassan, senior vice president of North American manufacturing, purchasing, quality and logistics.

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Nissan ranked first and second in truck manufacturing efficiency and No. 2 in car assembly.

Honda was first in engine productivity and second in assembly productivity and Toyota was runner-up in engine productivity.

However, GM reduced the amount of time it takes to build a vehicle by 4 or 5 percent over the past 12 months based on a plant-by-plant comparison of more than 120 auto plants.

"More than ever, 2001 showed the critical importance production and manufacturing systems play on a company's profit and loss margin," said Ron Harbour, president of Harbour and Associates Inc., a manufacturing and consulting firm that began the study in 1989.

He said automakers must focus on "lean manufacturing, and emphasis on quality, safety, and product and process engineering ..."

Manufacturers were on an annualized pace to sell 18.7 million vehicles in North American in 2002, compared to 19.7 million in 2001. GM held onto its 28.3 percent market share last year while Ford's market share dropped 4 percent to 22.9 percent and DaimlerChrysler's fell 8 percent to 13.3 percent.

Ford, whose productivity has declined since 1998, is in the midst of a massive restructuring to return to profitability after losing a record $5.45 billion in 2001. Management changes and cost-cutting will reduce its North American workforce by more than 21,000 as Ford gives hourly workers more responsibility in production.

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Meanwhile, GM and Mitsubishi have seen steady yearly improvement. The Harbour Report said the world's largest automaker posted a 4.5 percent overall improvement, leading domestic car companies in assembly, engine and transmission productivity for the first time. Vehicle assembly productivity was up 6.8 percent.

Mitsubishi posted an 8.6 percent improvement in vehicle assembly.

GM and Chrysler were the only companies that improved their combined hourly assembly, stamping and powertrain manufacturing efficiency in 2001.

"GM's performance ... measures is a direct result of the company's commitment to building a strong foundation in lean manufacturing," Harbour said. "At long last, the company's systems and processes are paying off in improved productivity, higher quality -- as shown in the company's improved performance in J.D. Powers' initial quality scores -- and lower costs."

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