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Published: Friday, 6/1/2007

Powertrain regains top spot in transmission plant ranking; Toledo Jeep shows slip in productivity

BY JON CHAVEZ
BLADE BUSINESS WRITER

Tired of consecutive second-place finishes, workers at General Motors Corp. s Toledo Powertrain factory have reclaimed their previous title of being the best transmission plant in North America.

The Harbour Report, a closely watched industry barometer that was released yesterday, placed Toledo Powertrain atop all transmission facilities in productivity, a spot it held for five straight years before being surpassed the last two years by DaimlerChrysler AG s Kokomo, Ind., plant.

It was frosting on the cake for the Alexis Road plant in which the company is investing $872 million to produce more fuel-efficient transmissions.

Regaining the banner is not only a pride thing, but a job-security issue, said Ray Wood, president of United Auto Workers Local 14 at the plant.

We don t like to come in second to anyone, he told The Blade.

The report also showed that Chrysler s Toledo Jeep Assembly complex slipped in productivity. It was not among the top 10 assembly plants in the country.

But Harbour officials said that was expected because the plant not only launched two products in 2006 but implemented unusual on-site operations run by three suppliers.

Both the Ford Motor Co. Lima, Ohio, plant and Global Engine Manufacturing Alliance in Dundee had decent performances compared with their peers, according to the annual report by Harbour Consulting of Troy, Mich.

Overall, the study found, Toyota led the six largest competitors in total productivity, using 29.93 labor hours to make a vehicle, or 5 percent better than last year.

But plants at General Motors, which has embarked on a plan to cut its work force by 30,000, was hot on Toyota s heels. Its labor hours were 32.36, a gain of 2.5 percent. Honda Motor Co. took 31.63 hours to build components and assemble a vehicle, Chrysler 32.9 hours, and Ford 35.1 hours. Nissan Motor Co., with no data supplied, was estimated at 29.97 hours.

General Motors essentially caught Toyota in vehicle assembly productivity, said Ron Harbour, president of the consulting firm.

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.

In the new report, GM plants took the best plant awards for vehicle assembly, engines, and transmissions. Honda s Marysville, Ohio, stamping plant took the fourth top award.

GM has made amazing strides just in the consistency in their manufacturing, said Greg Gardner, a Harbour analyst. It s very standardized, much, much more so than five years ago.

Toledo Powertrain was to receive its best plant award this morning.

We re proud of our membership and everything we ve been able to accomplish under great difficulty, said Mr. Wood of Local 14.

The plant lost about 1,300 workers who recently took buyouts or early retirement incentive packages as part of GM s corporatewide efforts to cut jobs. The factory s employees, Mr. Wood said, are not resting on their laurels, despite the GM investments.

The Toledo plant was able to build a rear-wheel-drive transmission every 2.54 hours, better than 2.8 hours a year ago and than 2.8 hours of the second-place finisher this year, a Chrysler plant in Indiana.

Improved productivity means we can run the company more efficiently, but it also means you re building a higher-quality product, GM spokesman Dan Flores said.

Toledo Jeep did not fare well in the Harbour study. Its factory that makes Jeep Liberty and the new Dodge Nitro used 22.13 hours to make a vehicle, 12 percent worse than last year. Its Nitro production alone took 20.11 hours, and finished second among plants making midsized sport-utility vehicles. Its factory that makes the Jeep Wrangler needed 22.05 hours per vehicle, worse than 20.84 a year ago.

But Harbour officials said that, with the Nitro being new and with Wrangler launching a four-door version last year, productivity typically drops initially. The start of three on-site supplier operations helping to make the Wranglers and a new four-door Wrangler also was novel for an automaker in the United States and likely curbed productivity at the outset.

I guess I would cut them a little slack because that was quite an undertaking, Mr. Gardner of Harbour said.

UAW Local 12 officials at Toledo Jeep were not available for comment.

North America s top assembly plant was GM s Oshawa, Ontario, plant, making a vehicle every 15.68 hours.

Among engine plants, Ford s Lima engine factory took 3.01 hours to produce a V-6 engine, 10 percent better than last year and enough to keep it first in the V-6 category. It finished sixth overall among engine plants, however. GM s Spring Hill, Tenn., plant was tops, at 2.27 hours.

Making a respectable third-place showing, Mr. Gardner said, was a joint-venture engine plant operated in Dundee by Chrysler. It was ranked for the first time this year, at 2.68 hours per engine. But it took 2.54 hours to build a 4-cylinder engine.

Dave Elshoff, a Chrysler spokesman, said the automaker wasn t pleased by the Dundee factory s performance. It s a tremendous showing for an all-new product and an all-new plant, he said, but the plant will improve as it gears up production.

Performances in the study affected profits per vehicle before taxes. According to the study, Ford lost $5,234 per vehicle, GM $1,436, and Chrysler $1,072. In contrast, Toyota made $1,266 per vehicle, Honda $1,368, and Nissan $1,575.

Reducing labor costs and particularly fringe-benefits costs will be key for GM, Ford, and Chrysler, whose UAW contracts expire in September, Harbour officials said.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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