Manufacturing Performance in Automotive Engine Plants

Abstract

In 1994, the International Motor Vehicle Program launched the Engine Plant Study with the goal of analyzing the drivers of performance in engine manufacturing. We have collected data from 18 plants worldwide and have found that there is a very large variation in performance across plants. Half of the variation seems to be attributable to factors that do not fall under the direct control of the plant such as the characteristics of the engine, the level of product variety, or the level of capacity utilization. Moreover, we found some statistically significant relations among workers, investment, and efficiency, which reinforces the idea that automotive companies should not put so much emphasis on labor productivity, and that these tradeoffs should be taken into account when making decisions about plant design.