Jim Harbour is well known to the movers and shakers of the auto industry having been directly employed by Chrysler and Ford during his years on the factory floor. Later, he started his own consulting company, Harbour & Associates, which created an annual scorecard of the industry called the Harbour Report.

What The Big Three Learned From Harbour

The Harbour Report had a profound influence on GM, Ford and Chrysler, helping these companies to narrow the quality and productivity gap that existed between themselves and their Japanese competition. But, Factory Man takes us back to the late 1940s, a period where the American industry ruled mightily with no challenge from abroad.

Harbour’s review of the industry is both painful and sobering. He honestly shows how inefficiency and arrogance nearly killed off America’s car industry, twin problems whose residual effects still linger today. Tens of billions of dollars have been wasted down through the years, with poorly planned ventures, misguided acquisitions, union indolence, management arrogance and customer indifference (or hostility) doing their best to thwart America’s might.

It is a wonder to me that we still have a homegrown car industry left, such as it is.

High Scrap Rates Weigh In

Harbour held nothing back when exposing the problems besetting the American car industry. When he first started out, he discovered that high scrap rates were among the besetting problems.  For example, defective steel, cracked forgings, heat treating problems and machining problems were some of the issues he found with steering knuckles, a part that had a whopping 15.6% scrap rate.

Later, we learn, that the scrap rate for companies like Toyota was usually closer to 0.5%, the difference often attributed to the machining process. Oddly, corporate management was aware of the problem, but never addressed the root causes. Worse, many parts were put in cars “as is” with dealer shops given the responsibility to make amends after the sale.

It Took Toyota To Get Things Right

It wasn’t until the 1960s when foreign competition first began to offer up a challenge to the U.S. car industry. Volkswagen was one of the first foreign companies to establish a beachhead in the US, with its popular Beetle leading the way. Toyota’s introduction in 1958 was a small start, but 25 years later the company followed Nissan and Honda by building an assembly plant in the US.

During that time, Harbour was touring Toyota plants in Japan in a bid to gain understanding of the Toyota way of car building. Toyota hired him to prepare a report which would help the company gain access to the US market. Fully aware of the problems besetting the UAW, Toyota wanted to build cars in the US, but didn’t want to be weighed down by a union which they saw was a major drag on the operations of the American car makers.

Harbour witnessed first hand how well organized Toyota’s plants were, almost a polar opposite picture of efficiency compared to the Big Three. Shop floors were clean, inventory arrived ‘just on time’,  absenteeism was low, morale high, etc. It took many years to convince the American industry to adopt the changes needed, but in Harbour’s view those changes have largely been incorporated by Chrysler, Ford and General Motors.

Too Late For Detroit?

Harbour sings big praises for GM honcho Rick Wagoner for turning the company around. Wagoner abandoned the foolish restructuring of 1984 which actually worsened GM’s plight. Later, he helped to narrow the quality gap and adopt the three c’s of manufacturing: common, common and common.

When the book went to press in February, Harbour included an Epilogue detailing the present industry woes. The frustration the man feels is evident with shared blame given to management inefficiencies, union stubbornness as well as a huge indictment against U.S. trade, safety and environmental policies which have proven to be an enormous drag on the Big Three.

Harbour forcefully and effectively lays blame where it should go, while worrying that America’s manufacturing base is continually being ignored or misunderstood by political brass. At 82 years of age he may not live long enough to see what is coming down the pike, but in his eyes it cannot be good for our country.

Society of Manufacturing Engineers

Factory Man was published by the Society of Manufacturing Engineers and is available through them as well as online via Amazon and other booksellers. James V. Higgins, a former auto beat reporter for The Detroit News assisted Harbour with the book.