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...Three. Though it is narrowing the quality gap, Detroit today squeezes almost all its earnings out of "light trucks," an industry category that includes SUVs and pickups. But the transplants are attacking that bastion. Toyota is adding capacity for its full-size pickup, the Tundra, with a new plant set to open in 2006 in San Antonio, Texas. And later this month, Nissan will inaugurate a new plant (now in test mode) in Canton, Miss., where it will build the Armada full-size SUV and the Titan full-size pickup...
...told, North American vehicle sales are expected to grow to 18.4 million a year by 2008, an increase of 1.6 million vehicles since 2002. The transplants alone are adding enough capacity for an additional 1 million vehicles. Hyundai is building a plant in Montgomery, Ala.--the first Korean auto-assembly factory in the U.S.--to make Sonata sedans and Santa Fe SUVs. Mercedes-Benz (owned by DaimlerChrysler, based in Stuttgart, Germany) is doubling capacity at its SUV facility in Tuscaloosa, Ala. And BMW recently expanded its plant in Spartanburg, S.C., where lines run overtime to produce Z4 roadsters...
Doing flexible assembly well is a lot tougher and, initially, more expensive than it may sound. Of the $1.5 billion Nissan has invested in its new plant in Canton, Miss., just north of Jackson, about a third went into making the operation as flexible as possible. At full capacity, the Canton plant can produce 400,000 vehicles a year, including sedans, minivans, SUVs and pickups...
...that their work practices are rooted not in mutual trust but in a system of sometimes picky rules. A "skilled tradesman" may be required to change a fuse in an assembly-line machine, a task that an assembly worker could easily be trained to perform. Work rules differ from plant to plant because agreements are negotiated with local union leaders. If a tradesman notices a line worker fiddling with equipment, he may file a grievance, claiming that his job is being undercut by a lower-paid employee...
Though the UAW has resisted manufacturers' attempts to outsource much production to lower-paying suppliers, GM may have set a precedent with its new Cadillac plant in Lansing, Mich., which opened last year. Be more flexible about work rules, and let us outsource more, GM said, or we'll set up shop in Mexico or Canada (where the Canadian Auto Workers split from its American parent in 1985). The plant is now a model of Detroit lean and mean. Its vehicles rate second, to Lexus, in initial quality. Suppliers deliver components every four hours (vs. every two weeks at some...