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June 19, 2003

USA: Nissan’s Smyrna assembly plant is most productive in annual survey

Nissan's operation in Smyrna, Tennessee, established a new benchmark for assembly productivity in The Harbour Report North America 2003, the annual study released on Wednesday by Harbour and Associates, Inc. Smyrna's car plant, which produces the Altima, led all assembly plants in the report with a measure of 15.74 labour hours per vehicle (HPV), the best performance in report history.

By bcusack

Nissan’s operation in Smyrna, Tennessee, established a new benchmark for assembly productivity in The Harbour Report North America 2003, the annual study released on Wednesday by Harbour and Associates, Inc. Smyrna’s car plant, which produces the Altima, led all assembly plants in the report with a measure of 15.74 labour hours per vehicle (HPV), the best performance in report history.

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 labour content required to assemble a vehicle.

For the first time, Mitsubishi led the overall company assembly rankings with a labour hours per vehicle measure of 21.33 at its operations in Normal, Illinois. 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 did not fully 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 plant in Princeton, Indiana.

The Chrysler group was the most improved company in the 2003 report with an overall productivity improvement of 8.3%, including a 9% gain in its assembly HPV, an 8.2% improvement in stamping and an 8.4% improvement in engine HPV. General Motors also had a solid performance, posting a 7.4% gain in the company’s overall HPV measure. GM has improved its overall HPV 22% over the last five years.

“The Chrysler Group and General Motors showed broad-based improvement at almost every one of their assembly, stamping and powertrain plants,” said Harbour and Associates president Ron Harbour.

Ford halted its HPV erosion with a 2.3% improvement in the company’s overall productivity.

In addition to the performance of its car line, which was No. 1 overall, Nissan Smyrna’s two truck lines finished first and second in truck plant productivity. Its truck line for the Frontier small pickup had a HPV measure of 18.23, and its line that produced the Xterra recorded an 18.35 HPV.

“The performance of Nissan’s Smyrna operation is testament to Nissan’s strength in manufacturing,” Harbour said. “Although it has not received the same acclaim as Toyota and Honda, Nissan’s manufacturing operations have always compared favourably with their Japanese rivals.”

Mitsubishi, another Japanese manufacturer, also earned praise for its continuing improvement. Mitsubishi’s assembly operation has improved nearly 45% over the last five years, including a 2.2% improvement in this year’s report.

“Mitsubishi may be only a one-plant operation in North America, but that one plant currently has six different models in production (the Eclipse, Endeavor, Galant, Sebring, Spyder and Stratus) all running on primarily the same assembly line,” Harbour said. “The plant’s progress over the last five years has been outstanding. While gains were much more modest in 2002, it also showed that Mitsubishi has not stopped its efforts to eliminate waste and further improve its performance.”

Other highlights from this year’s assembly, stamping and powertrain chapters include:

Assembly

Among participating plants, Toyota, Honda and Nissan continued to be the benchmarks in assembly productivity. In addition to Nissan’s record-setting performance, Honda and Toyota also had some very strong performances despite some launch degradations. For example, Toyota Georgetown’s two assembly operations combined for an overall 8.6% improvement in labour HPV.

The Chrysler Group’s assembly plants had an overall HPV of 28.04, a 9% improvement. Every Chrysler plant improved its productivity performance in 2002, including St. Louis North, the most improved assembly plant in The Harbour Report’s productivity measures.

“The Chrysler Group made significant improvement in 2002 with its assembly productivity, which probably surprised some industry watchers,” Harbour said. “But accelerated efforts to take out waste helped Chrysler become more efficient and realise some big gains in manufacturing productivity.”

General Motors also had a solid performance, with a 6.4% gain in productivity that improved its overall assembly HPV to 24.44. GM had four of the top 10 assembly plants, three of the top 10 most improved plants and GM plants were ranked No. 1 in seven of 14 vehicle segments.

“Lean product and process design, as well as a strong focus on quality and throughput have driven General Motors to solid improvement in assembly productivity over the past few years,” Harbour said. “GM’s new-found competitiveness and manufacturing strength are helping the company secure a much stronger place in the North American market.”

Ford also turned around two years of sliding performances with a 2.7% gain in productivity. Ford also had 4 of the top 10 most improved assembly plants.

“The turnaround of Ford’s assembly operations should not go unnoticed,” Harbour said. “The company deserves recognition for taking steps to create more commonisation throughout its operations, and accelerating the pace of its improvement activities.”

Stamping

Toyota again had the strongest performances across stamping’s basket of measures. Despite degradations in some measures, the company led all participants in such key labour productivity measures as hits per labour hour and pieces per labour hour, as well as key equipment productivity measures as hits per hour and pieces per hour. Modernisation strategies that include investments in higher volume, higher speed presses helped the Chrysler Group and General Motors continue to see improvements in both labour and equipment measures. Nissan also saw nearly across-the-board improvements thanks to sharp increases in volume.

Powertrain

Toyota and Honda finished first and second in the engine productivity rankings, reversing their order from the previous year. General Motors had the best performance of the domestic Big Three, and GM, the Chrysler Group and Ford all had improved performances in engine productivity. With an 8.4% productivity improvement, Chrysler took its hours per engine (HPE) measure below 5 hours for the first time ever.

Toyota led the four-cylinder segment with a HPE of 2.36, and Toyota’s West Virginia engine plant was the No. 1 plant in engine productivity with a HPE of 2.18. Despite an overall 9.3% degradation of its engine operations, Honda remained first in six-cylinder productivity with a 3.64 HPE. GM remained the benchmark in V8 productivity with a 4.21 HPE.

GM also narrowly led the Chrysler and Ford in transmission productivity. GM’s Toledo plant led all plants with an hours per transmission (HPT) measure of 3.23, and GM’s Spring Hill operation, in its last year of production, was the most improved transmission plant with a 12.7% gain in productivity. Chrysler led all participants in front-wheel-drive productivity, while GM led the rear-wheel-drive HPT rankings.

Overall

Despite performances that regressed in several categories, Honda and Toyota remained two of strongest manufacturers in the Harbour Report measures, along with Nissan. Harbour attributed degradations by Honda and Toyota to several factors, including a number of new product launches, an increase in the number and complexity of their vehicles, the lockout of West Coast dock workers, and the implementation of new systems and processes that are expected to pay off in improved performances in the future.

“Both Toyota and Honda undertook many tasks in 2002, which had an impact on their manufacturing performance,” Harbour said. “But these companies continue to set the course for designing and developing simple, low-cost manufacturing systems that produce high quality and highly sought vehicles in North America.”

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