GM Continues Steady Productivity Improvements

[Bruce Nunnally]

World's largest automaker has five of the top 10 most productive assembly plants overall Since 1998, GM closed the manufacturing productivity gap with Toyota by more than 75 percent and assembly productivity gap by nearly 90 percent

DETROIT – General Motors Corp. improved its overall North American manufacturing productivity in 2005 by 3.3 percent, according to the Harbour Report North America 2006. The world's largest automaker has five of the top 10 most productive assembly plants in North America.

GM also leads in six of the study's 15 vehicle segments, three of them in cars, one in crossovers and two in trucks. GM has improved manufacturing productivity by nearly 30 percent in the last seven years. Since 1998, GM has closed the productivity gap with Toyota by approximately 80 percent.

As part of the overall improvement, GM's vehicle assembly plants improved productivity by 2.9 percent. GM's engine plants improved productivity by 4.4 percent and its transmission plants improved productivity by 3.7 percent. GM's metal stamping operations improved labor productivity by 4.6 percent.

"GM's productivity improvements are being fueled by continued improvements in product quality and a sense of urgency to reduce cost," said Gary Cowger, GM group vice president of Global Manufacturing and Labor Relations. "GM's Global Manufacturing System is providing the foundation for our manufacturing improvements and this focus will drive our progress going forward."

GM's productivity gains were achieved despite production cuts of more than 413,000 vehicles in 2005 compared to 2004 levels. GM's performance is more proof that a constant focus on continuous improvement is part of the company's culture.

"A great deal of the credit for these noteworthy improvements resulted from the dedicated efforts and persistent focus of the UAW members at GM," said UAW Vice President Richard Shoemaker. "Union members are part of the solution at GM and these results underscore that fact."

"Most importantly for GM customers, much of GM's improvement has been driven by its plant quality improvements, reducing repair and overtime and thereby labor content in every car and truck, "said Ron Harbour, president of Harbour Consulting.

Some of GM's productivity highlights in the Harbour study include:

[*]At 33.19 total labor hours per vehicle (including assembly, stamping, engine and transmission manufacturing), GM improved its overall manufacturing productivity by 3.3 percent.

GM has five of the top ten most productive vehicle assembly plants in North America.

[*]Oshawa #2, Ontario, was ranked #2 at 16.08 hours per vehicle.

[*]Fairfax , Kan. , was ranked #4 at 17.62 hours per vehicle.

[*]Lansing M, Mich. was ranked #6 at 17.82 hours per vehicle.

[*]Oshawa #1, Ontario was rated #7 at 17.91 hours per vehicle

[*]Spring Hill #1, Tenn. was rated #10 at 18.34 hours per vehicle

GM vehicle assembly plants led in six of 15 North American assembly plant segments: Spring Hill #1, Tenn. was the industry's most productive sub compact car plant. Fairfax , Kan. was the most productive compact car plant. Lansing Grand River, Mich. was the most productive in the luxury car plant. Ramos Arizpe #2, Mexico was the most productive small crossover plant.

[*]Fort Wayne , Ind. was the most productive full-size pickup plant.

[*]Wentzville , Mo. was the most productive large van plant.

In the high volume full-size truck segments, GM had three out of the top four most productive full-size pickup plants (#1 – Fort Wayne, Ind., #3 – Oshawa, Ontario, and #4 – Pontiac, Mich.). Despite pulling ahead the launch of the all-new 2007 Chevy, GMC and Cadillac full-size SUVs by up to 17 weeks to accommodate customer demand, GM had three out of the top six most productive full-size SUV plants (#2 – Arlington, Texas, #4 –Janesville, Wisc., #5 - Silao, Mexico).

[Bruce Nunnally]

Also saw this snippet on a different piece about the same report:

The report estimated that Nissan, Toyota and Honda earned pre-tax profits of more than $1,200 on each vehicle sold in North America. The Chrysler Group earned a margin of $223, Ford lost $590 and GM lost $2,496 per vehicle. Those losses reflected the differences in health care and pension costs between the domestics and the import, lower revenue in 2005 and higher rebate costs, the report said.