The Truth Shall Set You Free

I was part of the problem," says Jim Harbour, now 76 and retired from his company. For most of his 23 years at Chrysler, he thought what most people in the industry thought: American automakers were the best. But in the late 1970s, Jim, as Chrysler's director of corporate manufacturing engineering, studied the lean production line at Mitsubishi and began to think otherwise.

After taking early retirement in 1980, at the age of 52, Jim founded Harbour and Associates to do automotive consulting. While working for Toyota, he visited its Japanese plants and was bowled over by the high-quality, just-in-time manufacturing. He promptly wrote a 54-page study--the original Harbour Report--that described how American automakers had lost their competitive advantage in manufacturing. Japanese companies could make a car using far less labor and for $1,700 less. He presented his analysis to Ford, GM, and Chrysler. All scoffed at or ignored his recommendations. So Jim took his dramatic study to the media. The attention eventually helped land his data in a 1982 report by the U.S. secretary of transportation.

Many of the Big Three executives, particularly those at GM, he says, reacted as though he had betrayed the industry. "It was a war between us and them, and I was a big mouth," Jim says. "Most of the companies were in complete denial, even though internally there were people who knew how far behind they were."

Following his revelatory report, he focused on building his consulting firm. Laurie Harbour Felax, 35, the youngest of his eight children and now vice president of the company, suggested making the report an annual. She believed it could create a respected brand. But it needed better data. In the late 1980s and early 1990s, when the Harbours issued follow-ups to the original report, they relied on public information to make rough estimates about productivity. The reports ruffled feathers as before, but the numbers weren't beyond reproach; the companies routinely disputed the report's methodology and accuracy.

The turning point came when the Harbours persuaded the automakers to share their data. "They realized the report wasn't going to go away, so they might as well make sure what we said about them was right," Felax says. In the face of their eroding market share, the Big Three could no longer deny their failure to compete. To improve, they needed the intelligence Harbour could provide. "When we first started down this road, the report was like cold water in your face, because we thought we were pretty good," says Jim Glynn, a former plant manager at Flint Metal Center. "Then we looked at the data and realized, This isn't working."

And so Harbour and Associates became a trusted partner. Since 1993, the Harbour Report has appeared annually, and the company has met regularly with the automakers' top brass to negotiate which results will be made public and decide how best to compare plants that use different machinery and make different vehicles. Over the years, says Felax, the companies have continued to make more data available, although there are some exceptions. Last year, for instance, Nissan withheld stats on its plants in Mexico, so the Harbour Report excluded the company from its overall rankings.

Although the automakers would just as soon not disclose how long it takes them to make a car or change a stamping die, says Ron Harbour, they realize that the more they share, the more they learn--about themselves, the competition, the industry. They may already be aware of their flaws, but they need a benchmark to determine exactly how far ahead or behind their competitors are. That's why the automakers open up to Harbour, and why they tell the truth. "I don't know why you would want to report [fake] numbers," says Gary Cowger, president of GM North America. "That would be like lying to your doctor."

Felax was right about the Harbour Report feeding the consulting side of the business. With a print run of several thousand copies, the study "is not a cash cow," she says. But it does give Harbour and Associates high-profile credibility as manufacturing experts. (The majority of the firm's clients are automakers or their suppliers, but it has also worked for major pharmaceutical and furniture companies, identifying ways to improve efficiency and quality.) And yes, it can be awkward when an automotive client is unhappy with a poor showing in the report. Felax and her brother, who insist on not owning stock in automakers or automotive suppliers, remind clients that the firm merely publishes the data. It doesn't create them. "What we do is keep score," she says. "When you go to a [Detroit] Tigers game and they lose for the 50th time, you don't beat the crap out of the scoreboard, do you?"