Transcript Slide 1

The Changing Face of the North
American Auto Industry
Ron Harbour
President, Harbour Consulting
Automotive News World Congress
January 18, 2006
Areas of Expertise
Harbour Performance
Manufacturing Assessments
Harbour Performance
Harbour Report Global
Lean Manufacturing
Implementation/Transformation
Strategic Planning
Product and Process Design
Product Launch Support
Harbour Benchmarking
Total Cost and Investment Modeling
Cooperative Benchmarking Studies
Cost and Investment Benchmarking
Product Teardowns
State of the Industry
Harbour Benchmarking
Harbour Report Global
North America annually since 1993
(public)
Europe annually since 1996 (private)
Heavy-duty truck study (future)
South America and Asia (future)
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Recent Clients
PSA PEUGEOT CITROËN
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North American Automotive
Manufacturing
Others
Vehicle Assembly
Total
13
21
25
7
4
7
9
Stamping
7
9
18
3
3
4
6
50
Engine
6
7
10
4
2
2
1
32
Transmission
3
4
6
1
1
2
0
17
Total
86
185
Harbour has visited most of these
plants over the last 5 years and tours
30 to 40 each year
© 2005 Harbour Consulting. All Rights Reserved
North American Vehicle Sales
(Millions)
19.8
Millions of
Vehicles
14.8
19.6
16.5
Domestic
brands still
have 69%
U.S.
of
56.9%
assembly
11.1 M
plants
U.S.
65.2%
Korea
0.9%
Europe
3.6%
U.S.
73.1%
U.S.
71.6%
10.8 M
11.8 M
Japan
23.8%
1992
Japan
Korea
21.5%
1%
Europe
3.3%
1995
12.9 M
Japan
32.2%
Japan
25.3%
Korea
2.7%
Europe
6.9%
Korea
4.3%
Europe
6.5%
2000
2005
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North American Vehicle Assembly Plant
Openings and Closings (1990 -- 2005)
New Plants
Closed Plants
Net Change
DaimlerChrysler
4
2
+2
Ford
1
2
-1
General Motors
3
16
-13
Toyota
2
-
+2
Honda
3
-
+3
Nissan
2
-
+2
Total
-6
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Chrysler Group North American
Vehicle Assembly Capacity
Millions of
Vehicles
3
2.5
2.75
Change from 1992 to 2005
NA Capacity rose 14%
(11 to 13 plants)
2.95
2.87
2
1
0
1992
1995
2000
2005
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Ford North American Vehicle
Assembly Capacity*
Capacity rose through the1990’s,
but fell 18% from 1995 to 2005
(22 to 21 plants)
Millions
of vehicles
4.83
5
4.8
4.3
4.0
0
1992
1995
2000
2005
* Includes AutoAlliance Inc.
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General Motors North American
Vehicle Assembly Capacity
Change from 1992 to 2005
NA capacity fell 31%
(38 to 25 plants)
Millions of
vehicles
8
7.35
6.4
7
6.2
5.1
6
5
4
3
2
1
0
1992
1995
2000
2005
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Honda North American Vehicle
Assembly Capacity
Change from 1992 to 2005
NA Capacity rose 129%
(4 to 7 plants)
Number of
Vehicles
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1992
1995
2000
2005
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Nissan North America Vehicle
Assembly Capacity
Change from 1992 to 2005
NA Capacity rose 192%
(3 to 4 plants)
Number
of vehicles
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1992
1995
2000
2005
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Toyota North American Vehicle
Assembly Capacity*
Change from 1992 to 2005
NA Capacity rose 216%
(5 to 7 plants)
Number of
Vehicles
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1992
1995
2000
2005
* Includes Toyota production from NUMMI
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North American Vehicle Assembly
Capacity
Millions of
vehicles
18
16
17.3
16.3
Others
Others
Nissan
Honda
Toyota
DCX
DCX
14
12
10
Ford
8
16.9
15.9
Others
Nissan
Honda
Toyota
Others
Nissan
Honda
DCX
Toyota
DCX
Ford
Ford
Ford
6
4
GM
GM
GM
2
GM
0
1992
1995
2000
2004
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North American Stamping (Domestics)
No. of Stamping
Plants
No. of Stamping
Plants
18
2004
109 Lines
1995
162 Lines
1995
2004
0
0
GM
More stamping
facilities, but most are
smaller plants with
fewer, better and
more productive
presses
Ford
No. of Stamping
Plants
7
7
66
LINES
5
5
92
LINES
10
241 Lines
15
9
10
14
33O Lines
20
9
1995
2004
7
6
5
4
3
2
1
0
dcx
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North American Stamping
(New Domestics)
Number of
Stamping plants
Number of
Stamping plants
4
14 lines
2
11
lines
2
22
lines
14
lines
4
0
0
1995
2004
1995
2004
Nissan
Toyota
Number of
Stamping plants
4 lines
2
6 lines
4
0
1995
Japanese assembly
plants always include
a small on-site
Stamping plant
2004
Honda
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North American Engine Capacity
(Domestics)
Millions of
engines
Millions of
engines
5
2.98
3.95
5.95
5.39
5
0
0
1995
1995
2004
Ford
GM
Domestic
3
•7.5% less capacity
1
2.78
2
2.16
How will
shrinking
assembly capacity
impact
powertrain
capacity?
2004
•9.8% less production
•15% fewer plants
0
Millions of
engines
1995
2004
DCX
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North American Engine Capacity
(New Domestic)
Number of
Engines
Number of
Engines
1,200,000
1,400,000
1,000,000
1,200,000
800,000
1,000,000
800,000
600,000
600,000
400,000
400,000
200,000
200,000
0
1995
0
1995
2004
Nissan
Toyota
Stronger yen
has driven the
shift in
powertrain
capacity
New Domestics
•125% more capacity
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Number of
Engines
2004
•113% More production
• Grew from 4 to 9
engine plants
1995
2004
Honda
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2005 North American Vehicle
Capacity Utilization
111%
97%
97%
93%
87%
79%
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Flexibility Drives Capacity Utilization
No. of
No. of
lines
platforms
No. of
2005 capacity
body styles
utilization
Honda East Liberty
1
2
3
81%
Honda Alliston #2
1
2
3
95%
Nissan Smyrna
2
3
5
124%
Toyota Cambridge
2
2
3
109%
Ford Chicago
1
1
3
98%
GM Oshawa
2
1
4
93%
DCX Brampton*
2
1
3
127%
* Operated on 3 shifts for most of 2005
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What Caused Today’s Overcapacity
Predicament?
• Significant market share loss
– Domestic manufacturers slid from 73.1% in 1992
to 56.9% in 2005
•
•
•
•
Lack of factory flexibility
Restrictive labor agreements
Overly optimistic sales projections
Significant performance improvement
– Better throughput
– Higher first-time through quality
– Improved equipment uptime
• New shift patterns
– 3 crews working 2 shifts
– 3 shifts
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North American History of Total Hours per
Unit – (Assembly, Stamping, Powertrain)
46.81
46.52
2004
vs.
1998
36.76
36.98
35.85
34.33
0%
23%
26%
31.90
30.79
30.25
32.02
0%
29.43
27.90
4%
8%
1998
1999
2000
2001
2002
2003
2004
GM excludes medium duty. Honda, Nissan and Toyota data includes partial reporting of North American plants.
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J.D. Power Initial Quality Survey
Problems per 100 Vehicles
149
140
129
126
123
119
118
116
113
109
106
104
95
85
81
2001
2002
2003
2004
2005
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Translating Perception to Reality
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Translating Perception to Reality
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