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Recent reports suggest the US Big Three may be turning things around. Quality and productivity are improving.

Falling sales and market share have affected Chrysler, GM and Ford. But the Harbour Report on productivity and JD Power’s quality survey indicate that the OEMs are closing the gap on Japanese competitors.

Ron Harbour of Harbour Consulting said: “Toyota is still on top for productivity, but the lead is marginal.” In the 2007 Harbour Report, a measure of US production efficiency, GM won three of the four best plant awards.

Toyota’s plants took 29.93 man-hours of labour last year to produce each vehicle. At GM it took 32.36. Ford was the least efficient of the main OEMs, averaging 35.10.

Harbour said: “Five years ago, the gap between best and worst was more than 11 hours per vehicle, giving Japanese OEMs a cost advantage of $800–900 a vehicle. Now, the gap is just a couple hundred dollars.”

Detroit has worked hard on productivity, but a change of strategy by Japanese firms might be partly responsible. They have expanded their line-ups to include larger and more complicated vehicles with bigger engines. Products such as the V8 Toyota Tundra often require more labour, not less.

Harbour said the impact of restructuring in Detroit would show up more clearly next year. “There’s no telling who might be on top, next year,” he said.

The outcome of contract talks between the Big Three and the United Autoworkers Union will have a significant impact, but so too will moves by the Big Three to increase their factory utilisation rates.

Japan’s OEMs lead here. The typical Toyota plant operated at 103 per cent of its normal two-shift capacity. Its slowest line still averaged nearly 100 per cent. Ford factories ran at 27 per cent.

To tackle this, Ford is closing plants and consolidating its production footprint. It is not yet clear what effect this will have on quality, however.

This year Ford improved quality. All three of its US brands were in the top 10 in the latest JD Power quality survey. Lincoln rose from 12th to third, behind Porsche and Lexus. The Lincoln Town Car was ranked fourth in the premium segment, but the Wixom plant that built it has closed.

GM did much worse in the survey. None of its brands scored highly. GM’s flagship Cadillac division fell from seventh to 25th, largely due to problems on the new Escalade luxury SUV.