Honda v. GM/Ford:5 Minutes v. $75-350M, 13 Mos.
The manufacturing dexterity of Honda's plants, now the most flexible in North America, is emerging as a key strategic advantage for the company. In an era of volatile gasoline prices, Honda can adjust production to inventory levels faster than its competitors. Earlier this year, when gasoline prices reached $4 a gallon, the company slowed production of its Ridgeline pickup truck at its Canada plant and increased output of better-selling vehicles.
In recent weeks, fuel prices have eased. If prices continue to fall and demand for larger vehicles improves, Honda has the ability to adjust faster than its competitors. At Honda, a variety of models can be assembled efficiently because almost all of its vehicles are designed to be put together the same way, even if their parts are slightly different.
FORD AND GM -- Switching from one model to a completely different one still can take weeks and millions of dollars. Ford will spend at least $75 million to overhaul a SUV plant in Michigan to make small cars, and the work will take 13 months. GM is retooling its Lordstown, Ohio, plant to produce a new model at a cost of $350 million.
Source: WSJ article "Honda's Flexible Plants Provide Edge"
MP: Another reason that the future of the U.S. automotive industry, regardless of temporary bailout measures, will shift towards the nonunionized, nimble, flexible foreign transplants like Honda (see chart above), and away from the rigid, unionized, "work-rule burdened," Soviet-style Big Three.