TROY, Mich. — One of Detroit’s automakers is about to come out with a new model that has 81 different side-view mirrors. A comparable model built by Honda Motor Co. has two.
According to a new study of the domestic auto industry’s woes, the mirrors are one costly example of why Detroit-based carmakers made an average $2,400 less per vehicle last year than their Japanese competitors.
The study, released Monday by Harbour-Felax Group, also blames high labor costs, huge employee- and retiree-benefit expenses, bad pricing strategies and the low value of the yen to the dollar as factors that make the Big Three’s vehicles more expensive to produce than those made by Japanese competitors.
The domestic automakers are at a point where they must quickly reduce their labor and manufacturing costs or they may not be in business over the long term, company president Laurie Harbour-Felax said.
The key to making more money is common components and car underpinnings used on multiple models, similar to what Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. already are doing, said Jim Harbour, founder of the consulting company known for its annual report that tracks auto-plant productivity.
Using common platforms, body architectures and components, Toyota has saved about $1,000 per vehicle in the past five years. And when fewer unique parts are needed for each vehicle, quality improves, reducing warranty costs, the report said.
Domestic manufacturers have yet to fully grasp the savings from such commonality, the report said. One manufacturer has 41 different seat frames, compared with five for the most streamlined carmaker. Another U.S. automaker has 100 different catalytic converters; the most efficient company has five.
The 81 mirrors vary by color, whether they fold or not and whether they are heated, driving up the manufacturer’s costs.
“Think about 81 mirrors,” Laurie Harbour-Felax said. “I’ve got to have more designers to design them. I have to have more product engineers to package them. I have to have more purchasing people.”