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Big Three Closing the Gap

Thursday, 31 May 2007 | 11:18 AM ET

If you're among those who think the Detroit "Big Three" are a lost cause that, despite improving quality and efficiency, are simply in a long, slow slide that shows no sign of ending, listen up. The latest study on the efficiency from Harbour Consulting shows the Big Three are closing the gap with Asian competitors. Want more? GM is almost in a virtual dead heat with Toyota when it comes to the time it takes to build a new vehicle.

First, let's talk about the gap between the Asian and domestic automakers getting closer? The difference in time it takes to manufacture a vehicle, including stamping and engine production, for the top automaker (Toyota) and the lowest rated domestic automaker is now just over five hours. That's a huge improvement over ten years ago when the difference was 17 hours.

Second, when it comes simply to final assembly, GM has improved to a point where it's just a few seconds behind Toyota. Honda is #1 at a little over 21 minutes. Not only that, but GM had the top-rated plant in three of the four categories rated by Harbour. In short, GM is almost on the same level as Toyota.

GM's improvement, and frankly Ford and Chrysler's as well, shows that the domestics are doing a better job building cars and trucks -- partially because they have worked with the UAW to see where they can make improvements, and partially because the domestics' focus on improving quality is helping them make vehicles more efficiently.

The challenge now for Detroit, is closing the "perception gap." Americans have a long memory and many still believe the Asian automakers build better vehicles -- even though data like the Harbour Report and J.D. Powers quality survey show the domestics improving how they operate. Once the Big Three figure out a way to change that perception, then perhaps sales will improve for the domestics.

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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