Productivity Gaps and Industry Shifts in 1998

Strategic Insights -

Confident home buyers continue to stride forward as financing barriers collapse, allowing a record two-thirds of American households to own their own homes by the end of the first quarter. In the automotive industry, Japanese automakers' plants in the United States were more productive than the Big Three, with Nissan's plant in Smyrna, Tenn., topping the list at 2.29 workers per vehicle. However, General Motors Corp. lagged behind, with 3.37 workers needed to build a vehicle, making it the least efficient automaker. Meanwhile, American Airlines raised the minimum mileage requirements for frequent-flier rewards, citing a $400 million upgrade in its first- and business-class cabins and strong demand.

Key Takeaways:

  • The 1998 Harbour Report ranked Ford Motor Co.'s Hapeville assembly plant as the most efficient builder of midsize cars in North America and the third most efficient overall.
  • Japanese automakers' plants in the United States were more productive than the Big Three, with Nissan's plant in Smyrna, Tenn., topping the list at 2.29 workers per vehicle.
  • General Motors Corp. was the least efficient automaker, requiring 3.37 workers per vehicle according to the report.
  • American Airlines raised the minimum mileage requirements for frequent-flier rewards, requiring between 10,000 to 25,000 more miles to buy or upgrade to premium seats on domestic and international flights.
  • The Big Three have improved significantly since last year, but still need to slash thousands of workers, design vehicles easier to build, and produce more vehicles per day without using overtime to catch up to the Japanese.
  • The collapse of financing barriers has allowed a record two-thirds of American households to own their own homes by the end of the first quarter.

Statistics:

  • 2.29: The number of workers needed per vehicle for Nissan's plant in Smyrna, Tenn.
  • 3.37: The number of workers needed per vehicle for General Motors Corp.
  • 10,000 - 25,000: The additional miles needed to buy or upgrade to premium seats on domestic and international flights starting Feb. 1.
  • 2/3: The percentage of American households owning their own homes by the end of the first quarter.

Sources:

  • 1998 Harbour Report by Harbour & Associates
  • Fannie Mae housing survey
  • U.S. Department of Housing and Urban Development
  • Associated Press reports