Harbour-Felax Group Study Reveals Honda as Best-in-Class

New study links automotive tooling practices to profit-per-vehicle gap

TROY, Mich., March 10 -- --  Overall industry performance analysis ranks Honda as best-in-class,
      followed in order of rank by Toyota, Nissan, General Motors, Ford and
      Chrysler
  --  Today's profit-per-vehicle gap between New Domestic and Detroit Three
      automakers is $3,259
  --  In 2008, New Domestics had profit losses of $830 per vehicle; Detroit
      Three, $4,089
  --  On average, Detroit Three automakers spend 8 percent more per tool
      than New Domestics
  --  Study details via webcast:
      http://www.videonewswire.com/event.asp?id=56316

The study, Vendor Tooling: The Not-So-Missing Link, released by automotive industry analyst Laurie Harbour-Felax, president, Harbour-Felax Group reveals that the New Domestic automakers (Honda Motor Co., Nissan North America, Toyota) on average pay eight percent less than the Detroit Three automakers (Chrysler, Ford Motor Co., General Motors) on vendor tooling. In terms of overall performance, automakers currently rank in the following order, according to Harbour-Felax: Honda, Toyota, Nissan, General Motors, Ford and Chrysler.

Vendor tooling, defined as tools that produce vehicle parts that are not produced at the automotive manufacturer, is rapidly increasing as a percentage of the total cost of the vehicle. The study, based on a sampling of more than $1 billion of previously-unseen tooling audit data, examines the life cycle for vendor tooling at the Big Six North American automakers including product development, sourcing and production practices.

"Until now, vendor tooling has been overlooked as a major contributor to the profit-per-vehicle gap," says Harbour-Felax. "This study indicates that vendor tooling is the link between automaker product and process, providing a unique insight into larger industry issues."

Changes to deep-rooted vendor tooling practices are critical to shrinking the profit-per-vehicle gap that exists and saving the OEMs and troubled supply base. Several best practices are currently in use, which should be adopted industry-wide. These include: early involvement of suppliers on programs; mutually agreed upon guidelines for tooling request for proposal process; reduction in the magnitude and number of engineering changes throughout product development; and collaboration to reduce overall cost through process improvements

"The purpose of this study is to shed light on best practices that will lead the domestic automotive industry into the next decade," says Harbour-Felax. "It will take a seismic shift in the traditionally competitive cost landscape that exists between Detroit Three automakers and suppliers, but the industry-wide results are guaranteed to lessen the profit gap, a reality critical to Detroit's existence."

Vendor tooling is a critical area of focus because it equals several billion dollars of spend each year and if Detroit Three automakers can generate a slight 10 percent savings in vendor tooling costs, they could save nearly enough money to fund a complete new vehicle program, says Harbour-Felax, who predicts a significant market rebound by 2012.

For full details on the study, media can view Monday's webcast, which will be archived for 90-days: http://www.videonewswire.com/event.asp?id=56316

Harbour-Felax Group

The Harbour-Felax Group partners with companies and their suppliers to transform their operations and develop a roadmap for maintaining sustainability in today's automotive and manufacturing communities. A team of highly skilled and experienced consultants, the Harbour-Felax Group and their partners have real-world experience in all aspects of manufacturing. The Harbour-Felax Group analyzes a company's operations compared to its competitors, identifies existing gaps, develops a road map to correct those gaps and implements a sustainable transformation process to achieve success. On the Web, www.harbourfelax.com