Saturday, December 02, 2006

Ford Stumbles to 4th Place in November

1. Ford Motor Company dropped to 4th place in November (180,939 units sold) for US auto sales, trailing #1 GM (293,558 vehicles), #2 Toyota (196,695), and #3 Chrysler (186,665).

2. Compared to November 2005, Ford's sales dropped by almost 10% last month, and Ford's market share fell from about 16% a year ago to less than 14% in November 2006.

3. The combined market share of Detroit's automakers fell to a historic low of 51.9% in November.

4. Toyota's market share increased to 16.4% in November, up nearly two points from 14.5% market share last year.

Some of Ford's financial troubles can be traced to low worker productivity, the lowest in North America. For example, the Harbour Report does an annual analysis of productivity in the automotive industry. For 2005, here are the results of one of the most closely-watched statistics: Total Hours per Vehicle for Assembly, Stamping and Powertrain, i.e. how many hours of total production does it take to produce a car or light truck:

Nissan: 28.46 hours
Toyota: 29.40 hours
Honda: 32.51 hours
GM: 33.19 hours
Chrysler: 33.71 hours
Ford: 35.82 hours

Therefore, it takes Ford workers 7.36 more hours to produce a car than Nissan workers. Over the 2.85 million vehicles Ford produces, that is an additional 21 million hours of work time compared to Nissan producing that number of cars. Multiply 21 million hours of additional work time by the average compensation cost to Ford of a UAW worker ($65/hour), and you get about $1.365 billion of additional cost every year at Ford! Ford excepts to lose about $10 billion this year, and at least $1.365 billion of that loss can be traced to low worker productivity.


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