- The Washington Times - Friday, July 12, 2002

In the past month, two important automotive report cards have been issued, and both demonstrate an indisputable correlation.
In May, the California market research firm, J.D. Power and Associates, issued the results of its 2002 Initial Quality Study.
It surveyed nearly 65,000 purchasers and lessees of 2002 model-year cars and trucks after 90 days of ownership.
Now in its 16th year, the study is considered the industry benchmark for new-vehicle quality.
Within weeks, the Detroit-area manufacturing-consulting firm Harbour and Associates Inc. announced the results of its annual report, considered the industry benchmark on productivity and costs.
The report announces the productivity of the automakers' 170 assembly, stamping and engine plants in North America.
Guess what?
Many of the same companies, plants and vehicles that appeared on J.D. Power's top-notch quality rankings also showed up on Harbour's A-list for productivity.
The obvious conclusion is that, over the long run, improved quality saves, rather than costs, companies money in higher productivity.
The higher the productivity, the better the quality.
The higher the quality, the better the productivity.
The higher the productivity and quality, the lower the cost and the higher the profit perindividual vehicle.
"This year's results further confirm the strong correlation between quality and productivity," acknowledged Ron Harbour, president of Harbour and Associates, in announcing the results of his report to the Automotive Press Association in Detroit.
Foreign-owned manufacturers Nissan, Honda and Toyota continued to have the most productive plants in North America, according to Harbour.
Foreign-owned manufacturers, especially Toyota, also captured the top spots in J.D. Power's quality ratings.
Of the study's 16 segments, Toyota and its luxury division, Lexus, led in nine, the most earned by any corporation.
Toyota also showed the most significant quality improvement 31 percent measured over the past five years.
Both studies, however, showed the gap is narrowing between foreign-owned manufacturers and the domestics.
In the quality rankings, GM was the best domestic performer, with four models earning top quality rankings, and demonstrated a 30 percent improvement in quality over the past five years.
The automaker, for the first time in the 22-year history of the Harbour Report, surpassed Ford in productivity.
One of its Oshawa, Ontario, plants captured first place in assembly productivity; the other received a top gold award for quality from J.D. Power.
The Buick Century ranked number 1 in quality for best entry midsize car.
"At long last, GM's systems and processes are paying off in improved productivity, higher quality and lower costs," Harbour said.
For the eighth straight year, Nissan led in assembly productivity at its Smyrna, Tenn., plant.
However, its productivity degraded from a year ago because of the debut of the redesigned Altima and so did its quality.
Chrysler was the only other automaker to show a double-digit improvement in productivity, according to Harbour.
It achieved double-digit improvements in quality 10 percent between 2001 and 2002, and 26 percent in five years based on J.D. Power results.
Both studies suggest significant strides being made in productivity and quality.
In fact, the J.D. Power report indicated the industry improved initial quality by 10 percent over 2001, the largest quality improvement for the industry since 1997, and 24 percent over the past five years.
Yet, both studies confirm the race for higher quality and productivity is never-ending.
Those in the lead are not standing still.
"Consumers have come to expect that the initial quality of their new vehicle will exceed that of their previous vehicle," said Brian Walters, director of product research for J.D. Power.
"If a manufacturer is not continuously improving its quality at a rate that meets or exceeds the industry average, it could be allowing a quality edge to its competitors," Mr. Walters said.
The same goes in the area of productivity.
The company that has higher productivity also has higher profits that can be plowed back into new vehicles and new features for the vehicles, which is what the most successful companies are doing, Harbour noted.
And all of that is good news for the consumer.

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