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Transportation equipment industry

Nissan's Manufacturing Efficiency Tops Big Three Automakers in North America

Strategic Insights

— 1 min read

Nissan's manufacturing operations remain the most efficient in North America, outperforming its American and Japanese competitors, according to the 1998 Harbour report. With an average of 2.29 workers needed to build a car or truck at its Smyrna, Tenn. plant, Nissan achieves pretax profits of $301 per vehicle. Meanwhile, its competitors, Honda and Toyota, are closing in on Nissan's lead with average worker requirements of 2.45 and 2.55, respectively.

Key Takeaways:

  • Nissan's manufacturing efficiency is unmatched in North America, with an average of 2.29 workers needed to build a car or truck at its Smyrna, Tenn. plant.
  • The Big Three American automakers, General Motors, Chrysler, and Ford, have bloated workforces, with General Motors needing 3.37 workers to build a vehicle.
  • Honda and Toyota are closing in on Nissan's lead, with average worker requirements of 2.45 and 2.55, respectively.
  • Ford is the most efficient and automated of the domestic manufacturers, needing an average of 2.97 workers to build a car or truck.
  • Chrysler needs 3.17 workers and General Motors needs 3.37 workers to build a vehicle, both requiring significant workforce reductions to reach Nissan's level of efficiency.
  • The Harbour report recommends that the Big Three automakers slash 96,920 workers, mostly in assembly, powertrain, and parts plants, to match Nissan's efficiency.

Statistics:

  • Nissan achieves pretax profits of $301 per vehicle.
  • Ford is North America's most profitable automaker when measured on a pretax, per-vehicle basis, with $1520 in profits per vehicle in 1997.
  • Chrysler collected $1336 per vehicle in pretax profits in 1997.
  • Theellery strike at Chrysler's Mound Road engine plant cost the automaker around $300 in per-vehicle losses.
  • The Harbour report recommends that the Big Three automakers cut 96,920 workers to match Nissan's efficiency.
  • General Motors needs to cut 54,915 jobs, Chrysler needs to cut 25,527 jobs, and Ford needs to cut 16,478 jobs.

Sources:

  • Harbour report, 1998
  • James Harbour, chairman of Harbour & Associates
  • Ron Harbour, president of Harbour & Associates
  • Reuters article, "Nissan's Efficiency to Lure More Investors: Harbour", 1998
  • Ford Group vice-president of manufacturing Bob Transou
  • The Wall Street Journal, 1998

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