Good News for GM in Its Battle with Toyota

[Oracle of Delphi]

Detroit Free Press

6/1/2007

Katie Merx

Jun. 1--General Motors Corp., once the symbol of big, slow corporate America, virtually matched Toyota Motor Corp., the icon of lean manufacturing, in North American assembly plant productivity last year for the first time since it has been measured, industry research group Harbour Consulting reported Thursday.

Toyota logged 22.05 hours of plant labor per vehicle assembled, while GM reported 22.15 hours, a difference of one-tenth of an hour, or just 6 minutes per vehicle.

"General Motors essentially caught Toyota in vehicle assembly productivity," consultancy President Ron Harbour said.

The results come at a turbulent time for Detroit's signature industry and at an interesting crossroads in the GM-Toyota relationship that hinges on their manufacturing partnership in California, among other projects.

Toyota seized the global sales title from GM in the first three months of the year. But at the same time, GM is working to leapfrog Toyota's fuel-efficient hybrid technology with its Volt series hybrid and fuel-cell concepts.

And now GM is nipping at Toyota's heels in vehicle assembly -- long a key to Toyota's success.

Among Detroit automakers, GM had the most productive assembly plants in the Harbour Report, and scored best overall, including in stamping parts and building engines and transmissions.

The results come as GM and other Detroit automakers prepare to begin formal contract negotiations with the UAW.

Automakers' plant-floor efficiency has direct effects on bottom-line profits and allows automakers to charge consumers less or put more content, such as air bags or electronics, into vehicles.

GM said its latest Harbour Report results tell a story of its continuing improvement, with GM closing the productivity gap with Toyota by nearly 85% since 1998 and capturing bragging rights as the first automaker to have its plants capture top productivity honors in three of Harbour's four award categories. GM won in vehicle assembly, engine-making and transmission manufacturing. It did not win in stamping.

"GM's leadership in three of the four manufacturing categories demonstrates we are transforming the company for sustainable, long-term success," Gary Cowger, GM group vice president of global manufacturing and labor relations, said in a statement. "This success is a result of our people being involved in the business like never before."

Analysts said the marked improvement in productivity is important, but is just one of many things GM needs to accomplish and continually improve as it fights to return to profitability and restore its reputation as a quality manufacturer and battles Toyota for the dominant spot in the global auto industry. Those things are all important to avoid further North American losses and job cuts at the company.

Harbour said GM's improved productivity is impressive because it came amid production cuts of about 5% last year and before the company fully realized the benefits of cutting its hourly workforce by 34,410 through a buyout and early retirement program.

"Improving productivity in the face of lower production is a huge accomplishment, but none of the domestic manufacturers can afford to let up," Harbour said. "Toyota is not going to slow down."

Toyota took Harbour Report honors again this year for leading the six largest North American automakers in total manufacturing productivity, using 29.93 hours of labor for every vehicle produced. That was slightly higher than 29.40 hours the year earlier, which Harbour attributed to the automaker's launch of new plants and several new vehicles.

But GM plants took top honors in three Harbour categories, and its vehicle assembly productivity trailed Toyota by just 6 minutes.

"We are virtually deadlocked," said GM spokesman Dan Flores, adding that GM -- like Toyota -- is focused on continuous improvement.

The Oshawa, Ontario, plant that assembles the Pontiac Grand Prix, Buick LaCrosse and Buick Allure led assembly plants for the most efficient productivity, with 15.68 hours per vehicle, followed closely by the adjoining Oshawa plant that produces the Chevrolet Impala and Monte Carlo.

GM's Spring Hill, Tenn., four-cylinder engine plant turned in the best performance of any engine plant, at 2.27 hours per engine, edging out Toyota's Buffalo, W. Va., plant by just more than 1 minute, with 2.29 hours per engine.

And GM's Toledo transmission plant took top honors, with 2.54 hours per transmission. Toyota and Honda transmissions were absent from the top transmission lists because none of the Japanese automakers had a full transmission plant at the time of the survey, Harbour said, adding that that will change.

"It's all very encouraging for GM, but it is just one aspect of making your company profitable," said auto analyst Erich Merkle of IRN Inc. in Grand Rapids. "There's the jobs bank, health care costs, legacy costs, all those issues are also weighing on General Motors. It's not enough for GM, given the position they're in, to match Toyota. They've got to beat them."

Link: http://www.apics.org/APICS/Resources/ViewA...hToyotaEDIT.xml

I didnt see this posted anywhere, if it was, I apologize.

[ellives]

"It's all very encouraging for GM, but it is just one aspect of making your company profitable," said auto analyst Erich Merkle of IRN Inc. in Grand Rapids. "There's the jobs bank, health care costs, legacy costs, all those issues are also weighing on General Motors. It's not enough for GM, given the position they're in, to match Toyota. They've got to beat them."

Well hello Captain Obvious. Don't forget the lemming effect and the fact GM needs to hire a marketing company that has been to a clue store and got one lately.

I *will* says it's nice to see Tundras going out the door with $3500 on the hood. :AH-HA_wink:

[gm4life]

They need more the 3,500 on the hood trust me. This is more good news indeed.

[FUTURE_OF_GM]

This needs MAJOR exposure!!!!

GM needs to advertise ALL of it's accomplishments and play this up as the big deal it is!

[gm4life]

I agree with future here, GM needs to advertise did anyone read the Impala story about the lease they saw and then leased one. That is the best thing for them is to know what to market and how to market it.

[Newbiewar]

This needs MAJOR exposure!!!!

GM needs to advertise ALL of it's accomplishments and play this up as the big deal it is!

i think not...

GM stilll isnt better or faster or higher quality...

you cant go boasting... We've almost caught them!

i mean... the 2 oshenawa plans are GM's best... the best in north america... but not better then a couple back in japan...

[gm4life]

But will Toyota really want to talk about how great it is back in Japan when they are trying to be as American as apple-pie with the new and ugly Turd? I think not.