Indexes of Output Per Man-Hour: Motor Vehicles and Equipment Industry, 1957-66 : Bulletin of the United States Bureau of Labor Statistics, No. 1613

Name: Indexes of Output Per Man-Hour: Motor Vehicles and Equipment Industry, 1957-66 : Bulletin of the United States Bureau of Labor Statistics, No. 1613
Creator: FRASER
Keywords: Labor productivity, Statistics, Technology, United States

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M OTO R VEHICLES A N D EQUIPMENT INDUSTRY BLS BULLETIN N O 1613 U S DEPARTMENT OF LABOR BUREAU OF LABOR STATISTICS B S B L E IN N L UL T O IN E E O O T U DXS F UP T P RMN O R E A H U Motor Vehicles and Equipment Industry D e c e m b e r U S 1968 D E P A R TM E N T O F LA B O R BUREAU OF LABOR STATISTICS Ben Burdetsky Acting Commissioner For sale by the Superintendent of Documents U S Government Printing Office Washington D C Price 45 cents Preface The Bureau of Labor Statistics has been publishing reports on output per man hour for selected industries for many years The motor vehicles and equipment industry will be the most important of the published series in terms of the number of persons employed The problems of measurement in this report are complex in view of the industry structure the range of products and the rapidly changing product mix As a result the Bureau made extensive use of detailed information provided by the motor vehicles manufacturers to supplement regular sources of published information This study was prepared in the Office of Productivity Technology and Growth under the direction of Jerome A Mark Assistant Commissioner The measures were prepared by Clyde Huffstutler Jeffrey Hohenstein and Edwin Adelman of the Division of Industry Productivity Studies under the direct supervision of Chester Myslicki Chief Arthur S Herman of the Division of Tech nological Studies wrote the section relating to technological developments CONTENTS Page Introduction Trends in output per man hour output and employment 2 Technological developments Technical n ote Definition of the industry 16 General procedures Output indexes Employment and man hour indexes Tables Motor vehicles and equipment industry lc Output per man hour unit labor requirements and related data all employees A 2 Output per man hour unit labor requirements and related data production workers Output per man hour unit labor requirements and related data nonproduction workers General characteristics selected years Distribution of U S automobile model year production by price group car size and body style Factory installations of selected equipment items percentages model years Charts Motor vehicles and equipment industry 1 Output per all employee man hour output and all employee man hours Output per production worker man hour output and production worker man hours Output per nonproduction worker worker man hour output and nonproduction worker man hours New plant and equipment expenditures for motor vehicles and equipment Appendixes A Weighting diagram for the motor vehicles and equipment industry B Accessories covered in the optional equipment output index C Unit value weights used in compiling the truck trailer output index D Motor vehicles and equipment industry Average annual rates of change percent Output per man hour and related indexes v INDEXES OF OUTPUT PER MAN HOUR MOTOR VEHICLES AND EQUIPMENT INDUSTRY Introduction The efficient use of resources in the production of a nation s goods and services has long been recognized as the means to higher levels of economic well being and national strength One measure of change in resource use is productivity and one form of productivity measurement is output per man hour which reflects the change in output the quantity of goods produced per unit of labor input Measures of output per man hour for a specific industry are particularly useful for studying changes in manpower utilization projecting future manpower requirements analyzing trends in labor costs comparing productivity progress among countries examiningthe effects of technological developments on employment and unemployment and analyzing related economic and industrial activities Such analyses usually require that indexes of output per man hour be used in conjunction with other industry data For example to study technological effects related data on production and employment are useful to study trends in labor costs data on earnings and other labor expenditures are essential Although the measures relate output to one input labor they do not measure the specific contribution of labor of capital or of any other single factor Rather they reflect the joint effect of a number of interrelated influences such as changes in technology capital investment per worker utilization of capacity layout and flow of operations skill and effort of the work force managerial skill and labor management relations In general industry measures of output per man hour are subject to certain qualifications First existing data techniques cannot fully take into account changes in the quality of goods produced Second although efforts are made to maintain consistency of coverage between the output and labor input estimates some slight statistical differences may remain Third changes in the degree of plant integration and specialization are often not reflected adequately in the production statistics Overstatement of productivity gains in some years and understatement in others may result Fourth year to year changes in output per man hour are irregular and therefore not necessarily indicative of basic changes in long term trends Conversely long term trends are not necessarily applicable to any one year or to any period in the future Because of these and other statistical limitations these indexes cannot be considered precise measures instead they should be interpreted as general indicators of movements of output per man hour This report includes new measures of output per man hour for the motor vehicles and equipment industry Included also is some analysis of the trends in output per man hour and related series as well as a description of some of the technological developments that have occurred in the industry Finally there is a detailed technical note which describes the sources of data and the statistical techniques utilized Trends in Output Per Man Hour Output and Employment Output per man hour of all employees in the motor vehicles and equipment industry increased at an average rate of 4 8 percent per year be tween 1957 and 1966 appendix D J The 1966 index of output per man hour exceeded the 1957 level by over 45 percent table 1 This annual rate of gain compares favorably with the 3 7 percent rate for manufacturing and the 3 4 per cent rate for the entire private economy The gain in output per man hour for the in dustry was closely related to the high rate of out put increase Over the 9 year period total prod uction of motor vehicles and equipment rose at an annual rate of 8 2 percent The industry s growth rate was considerably above the 5 3 per cent rate for manufacturing and the 4 4 percent rate for the private economy Major factors underlying output per man hour movements are changes in output and in tech no logy Technological progress generally operates as a positive factor in good and bad years in the automotive industry its impact over the long run has been obscured by the effects of dramatic yearly fluctuations in output See p 14 for a detailed discussion of technological developments in the industry The automotive industry is particularly re sponsive to changes in general economic condi tions cyclical factors strongly influence produc tion and consequently output p e r man hour Thus productivity did not increase at a uniform rate year to year changes ranged from a de cline of 2 8 percent between 1957 and 1958 to an increase of approximately 1 0 percent between 1961 and 1962 The 1958 decline reflects a re cession induced production cutback of more than 25 percent Correspondingly the high in crease in 1962 occurred when output rose over 25 percent in a strong rebound after another re cession 1 Average annual rates in this report are based on the linear least squares trend line fitted to the logarithms of the index numbers 2 Business cycles were not the only factor in the short term variations in output that explain much of the variation in the rate of productivity growth For instance strikes in the industry affected production in 1961 and 1964 as did the lengthy steel strike in 1959 Changes in the relative importance of imported cars have had a significant impact too Imports took an in creasing proportion of the automobile market until 1960 when the American industry intro duced the compact car and the sale of imported cars dropped sharply Over the next several years imports climbed back steadily a sizable increase in sales occurred in 1966 See table 4 Customer response to style changes and the degree of inventory buildup also directly in fluenced the industry s production thus all of these factors helped determine variations in out put per man hour Cyclical factors probably account for the di vergence in the relation between output and in output per man hour that began in 1962 Output per man hour rose an average of 6 7 percent a year from 1958 through 1962 but only 3 3 per cent a year from 1962 through 1966 On the other hand output rose almost as much in the later years 9 6 percent per year as in the earlier years 9 7 percent per year Since the two periods began at different stages of the business cycle changes in capacity utili zation probably account for some of the decrease in the rate of productivity increase The 195862 period not only followed the 1957 58 recession but also a peak automobile production year of 1955 and the peak employment year of 1953 Thus the industry had both plant and labor reserves to draw on when production picked up In con trast the 1962 66 period started from a level of output 60 percent higher than that of 1958 The industry s productivity rate thus appears to follow a fairly typical pattern of more rapid in creases in output per man hour in the earlier stages of business expansion than in the later stages A further damper on the rate of growth in the later period may have occurred as the job market tightened Both employment and man hours fluctuated widely between 1957 and 1962 but their net effect w a s a small decline in both figures After 1962 employment rose 5 8 per cent a year total man hours 6 2 percent As employment expanded overtime h o u r s in creased the quit rate rose skill shortages oc curred and employers hired new inexperienced workers Although isolating the contributions of sep arate factors to changes in productivity is im possible to some extent the lower productivity gains for the 1962 66 period reflect a change in the type of production In contrast to the earlier period when plainer compact cars played an important role car p r o d u c t i o n after 1962 featured an increasing variety of models and equipment See tables 5 and 6 Consequently the industry had less opportunity to derive the benefits that result from a smooth workflow including ease of mechanization Clearly cyclical factors had the most im portant effect on changes in output per man hour during the period studied not only for automotive employees in general but also for production workers The production worker out put per man hour index increasing at an aver age of 4 5 percent a year was both smaller and steadier than the all employee measure It was steadier because production worker man hours tend to follow changes in output more closely than nonproduction worker man hours do It was smaller because the high and continuing increase in output caused a slightly faster rate of increase of man hours and employment for production than for nonproduction workers Thus a turn around occured in the post war decline of production workers as a percentage of all auto motive employment A change in the industry s capital expenditures may have had an additional influence on output per man hour After the high levels of capital expenditures fell between 1958 and 1962 chart 4 Establishing a direct relationship between changes in capital expenditures and in output per man hour is difficult but in many industries increases in the rate of productivity gain have followed periods of high capital ex penditures A lag appears between the time when expenditures for plant and equipment are made and when these facilities which usually incor porate new technological advances become fully operative Similarly cutbacks in the level of capital e x p e n d i t u r e s tend to retard the rate of p r o d u c t i v i t y growth in subsequent years 3 Table 1 Motor V ehicles and Equipment Industry Output P er M an Hour Unit Labor R equirem ents and Related Data A ll E m ployees Indexes Output p e r Year A ll em ployee A ll em ployee m an hour Unit labor requirem ents fo r A ll A ll em ployee em ployees m an hours Related data Output A ll em ployees no A ll em ployee m an hours Source Output based on data from company records Autom obile M anufacturers A ssociation Automobile Invoice Service Company Autom obile P ricing P ublications Inc National Autom obile D ealers Used Car Guide Company Pow ers and Co Inc Ward s Automotive Y earbooks Bureau of the C ensus U S Department of Com m erce Bureau of Labor Statistics U S Department of Labor Employment and m an hours based on data from the Bureau of Labor Statistics U S Departm ent of Labor and company records 4 Chart 1 MOTOR VEHICLES AND EQUIPMENT INDUSTRY Output Per All Employee Man Hours Output and All Employee Man Hours Indexes Ratio scale 5 Table 2 Motor V ehicles and Equipment Industry Output P er M an Hour Unit Labor R equirem ents and Related Data Production W orkers Indexes Year Output p e r Production Production worker worker m an hour Unit labor requirem ents R elated data fo r Production Production Output1 Production Production worker worker w orkers w orkers m an hours m an hours xThe m easures of output used in this table represent the total production of the industry resulting from all em ployees and do not represent the specific output of any single group of em ployees Source Output based on data from company records Autom obile M anufacturers A ssociation Autom obile Invoice Service Company Autom obile P ricing Publications Inc National Autom obile D ealers Used Car Guide Company P ow ers and Co Inc Ward s Automotive Y earbooks Bureau of the C ensus U S Department of Com m erce Bureau of Labor Statistics U S Departm ent of Labor Employment and m an hours based on data from the Bureau of Labor S tatistics U S Departm ent of Labor 6 7 Table 3 Motor V ehicles and Equipment Industry Output P er M an Hour Unit Labor R equirem ents and Related Data Nonproduction W orkers Indexes Year I Unit labor requirem ents Related data for Non Non Non Non Non production production production Output2 production production worker worker w orker w orkers m an hours1 m an hour1 w orkers m an hours1 Output p e r Non production worker l l23 3 xThe figures shown in parentheses are subject to a wider m argin of error than are other m easures for this industry because of the method of estim ating nonproduction worker m an hours See Technical Note p 22 2The m easures of output used in this table represent the total production of the industry resulting from all em ployees and do not represent the specific output of any single group of em p loyees Source Output based on data from company records Automobile M anufacturers A ssociation Automobile Invoice Service Company Automobile Pricing Publications Inc National Autom obile D ealers Used Car Guide Company Pow ers and Co Inc Ward s Autom otive Yearbooks Bureau of of the C ensus U S Departm ent of Com m erce Bureau of Labor Statistics U S Departm ent of Labor Employment and m an hours based on data from the Bureau of Labor Statistics U S Departm ent of Labor and company records 8 9 Table 4 Motor V ehicles and Equipment Industry G eneral C haracteristics Selected Y ears Item E sta b lish m en ts Total em p loym en t Production w o r k e r s Ratio of production w orkers to all e m p lo y e e s Nonproduction w o r k e r s F actory Sales P assen ger c a r s Trucks and b u s e s Exports P assenger c a r s Trucks and b u s e s Imports P assen ger c a r s Trucks and b u s e s Value added by m anufacture3 Capital expenditures new Unit Number Thousands doPercent Thousands 1957 l do do do do do do m illion do Not available 2 Not strictly com parable with other years 3 Adjusted for inventory changes Source Automobile M anufacturers A ssociation Bureau of the Census U S Department of C om m erce and Bureau of Labor S tatistics U S Departm ent of Labor 10 Chart 4 NEW PLANT AND EQUIPMENT EXPENDITURES FOR MOTOR VEHICLES AND EQUIPMENT Millions Note Data for and 1960 not strictly comparable with other years Source Bureau of the Census U S Department of Commerce 11 T a b le 5 D is tr ib u tio n o f U S A u to m o b ile M o d e l Y e a r P r o d u c tio n by P r i c e G ro u p C ar S iz e and B o d y S ty le D a ta E x p r e s s e d a s P e r c e n t o f T otal I U S auto p r o d u c tio n tho u san d s A uto p r o d u c tio n by p r ic e group o r l e s s and o v e r A uto p r o d u c tio n by c a t s iz e L u x u r y M e d i u m R e g u l a r I n t e r m e d i a t e C o m p a c t s S p e c i a l t y A uto p r o d u c tio n b y bod y s ty le Sedans d o o r d o o r C o n v e r tib le s 2 d o o r d o o r H a r d to p s d o o r d o o r W ago n s 2 3 2 d o o r d o o r 2 s e a t d o o r 3 s e a t d o o r N o t a v a il a b l e I n c lu d e s b u s i n e s s c o u p e and c lu b c o u p e 3 M iscella n eo u s S o u r c e W a r d s A u to m o t iv e Y e a r b o o k N ote S u m s of in d iv id u a l i t e m s m a y not e q u a l to t a ls b e c a u s e o f rou n d in g 1 2 12 T a b le 6 F a c t o r y I n sta lla tio n s of S e le c te d E q u ip m en t I te m s M o d el Y e a r s P ercen t E q u ip m en t A u t o m a t i c t r a n s m i s s i o n M anual tr a n sm issio n 3 s p e e d M anual tr a n sm issio n 4 s p e e d O v e r d r i v e t r a n s m i s s i o n V 8 e n g i n e c y l i n d e r e n g i n e c y l i n d e r e n g i n e P o w e r b r a k e s P o w e r s t e e r i n g P o w e r w i n d o w s P o w e r s e a t s R a d i o A i r c o n d i t i o n i n g L o c k i n g d i f f e r e n t i a l M o v a b le s t e e r i n g w h e e l D i s c b r a k e s T a p e r e c o r d e r J V f J J D ata not c o m p a r a b le to la te r y e a r s 2 N ot a v a ila b le S o u r c e B a s e d o n d a ta f r o m A u t o m o b i l e F a c t s a n d F i g u r e s I Technological Developments stalled This technique consisting of automatic operation and control of machine tools by elec tronic devices and coded tape instructions is suitable particularly for small volume produc tion Because of greater accuracy in reproduc tion of parts and elimination of jigs and fixtures numerical control has been applied in the auto industry largely to increase efficiency in man ufacture of the many tools and dies needed by the industry for the large number of automobile models produced Numerical control is also being used increasingly to produce small volume parts and in combination with conventional machine tools on transfer lines to increase their flexibility Although changes in output greatly influence short run movements in output per man hour long term trends are affected by additional in terrelated factors changes in technology cap ital investment research and development skill and effort of the work force managerial ability and labor management relations Changes in technology are especially important although the precise effect on output per man hour cannot be measured The industry had been involved in a substan tial program of modernization during the 19626 6 period A 1966 McGraw Hill S u r v e y indicates that the industry s producing facilities five years old or less increased from 29 percent in 1961 to 58 percent in 1966 the highest pro portion of new equipment reported by any man ufacturing industry in that year Moreover 25 percent of the industry s capital spending in 1965 was for automated machinery and equipment well above the average for all manufacturing Electrical discharge and electrochemical ma chining techniques which apply electrical energy to shape metal parts provide much closer toler ances than conventional techniques and reduce much of the time and hand labor formerly needed Electrical discharge machining is used mainly for tool and die production electrochemical machining is being applied to debur parts and to a limited extent to produce actual parts Important technological changes have been taking place in almost all phases of motor ve hicles manufacture designing machining in spection assembly and data processing Many of these changes are designated to meet the need of greater flexibility in production techniques brought about by the large number of different automobile models and accessory items being manufactured The use of most of these innova tions however is still quite limited and their future diffusion will depend on such nontechni cal factors as market prospects competitive conditions union attitudes capital requirements and character of management Information on some of the more important technical develop ments that have been taking place in the industry obtained from a review of annual reports of cor porations and trade and technical publications is presented below Advances in Machining New transfer lines permit greater product flexibility and more efficient operations than older equipment by incorporating multipurpose machines which can produce a number of variations of a given part with mininum adjust ment These lines feature automatic work hand ling devices and built in storage areas for parts in process which allow shutdown and maintenance of individual stations without stopping the whole line The number of automatic operations per formed on transfer lines including time consum ing functions such as gaging and inspection has been increasing 2 J Data from this survey include investments made in some automotive stamping plants that are classified outside of the motor vehicles and equipment industry In machining a significant number of numer ically controlled machine tools have been in 14 Use of Computers Over 400 computers are being used for such applications as accounting payrolls inventory control and for scientific engineering and manufacturing functions In the final assembly line operation computer systems match parts of different models styles and colors of motor vehicles This procedure permits smaller parts inventories warns of interruption of parts flow and adjusts the model mix to provide more efficient assembly operations Computer assem bly line applications also provide daily work schedules on line quality control and reports of bad assemblies to repairmen In some cases computers are connected to gages and equip ment on the lines to directly monitor operations Computer applications in other areas of manu facturing monitor and control individual and banks of production machines check automatic transmissions and test completed automobiles for safety quality and air pollution control Advanced techniques incorporating compu ters which reduce the lead time between design and production of individual automobile models have been gaining acceptance for engineering and design functions Computers are useful in solving complex engineering problems that pre viously would have taken many computational man hours New techniques to increase designer and draftsmen productivity include computer aided design techniques and digitizing drafting machines which translate auto body contour drawings into numbers and record points on tape used on numerically controlled drafting machines to produce perspective drawings Another system consists of a contour scanner using a TV camera which records data from clay models The data are fed into a computer which produces tapes for numerically controlled die making machines to speed up greatly the design cycle 15 New Materials New and substitute materials for motor ve hicle manufacture include plastics for numerous components ranging from grilles to rear fender extensions Injection molded plastic parts such as instrument panels and inner fender panels have been substituted increasingly for die cast metal parts They reduce the amount of labor needed for parts production and assembly since they are generally molded in one piece and require fewer finishing operations They also provide substantial weight savings and reduction in the number of dies needed Aluminum is being substituted for iron and steel in making gear housings rocker arm covers and com ponents of accessory options such as power steering power brake units and air condi tioners Crankshafts and connecting rods form erly produced as steel forgings are now made of nodular iron castings which reduce man hours in subsequent processing Zinc die cas tings stainless steel fiber glass and adhesive for bonding are some other new materials Mechanization of Assembly Automatic assembly machines which can per form screwdriving nut running riveting feed ing and aligning operations reduce unit labor requirements in the assembly of large volume fixed design parts such as door locks and brake components Automatic assembly may improve product quality increase production speed and reduce inventories Major subassemblies such as different horse power V 8 engines are produced containing numerous interchangeable parts This technique allows a number of different subassemblies to be built using the same production equipment reduces drastically the number of different parts to be manufactured allows longer produc tion runs for individual components simplifies assembly operations and reduces the inventory of parts needed for service Technical Note Definition of the Industry The motor vehicles and equipment group as defined in this report is based on the 1967 Standard Industrial Classification SIC Group No 371 J3 This consists of the 4 digit indus tries defined in the following paragraphs For each industry an alphabetical list of the prin cipal products appears in the SIC manual 1 Motor Vehicles SIC 3711 Establishments primarily engaged in manufac turing or assembling complete passenger auto mobiles trucks commerical cars and buses except trackless trolleys Industry 3742 and special purpose motor vehicles such as ambu lances and fire engines 2 Passenger Car Bodies SIC 3712 Establishments primarily engaged in manufac turing passenger car bodies but not engaged in manufacturing complete passenger automobiles Establishments primarily engaged in manufac turing stamped body parts for passenger cars are classified in Industry Truck and Bus Bodies SIC 3713 Establishments primarily engaged in manufac turing truck and bus bodies for sale separately or for assembly on purchased chassis Estab lishments primarily engaged in manufacturing stamped body parts for trucks and buses are classified in Industry Standard Industrial Classification Manual U S Bureau of the Budget Some indus try sources have recommended expanding the definition to include all automotive stamping plants At present only those plants producing automobile bodies as final products or consid ered integral parts of motor vehicle establish ments are included 4 Motor Vehicle Parts and Accessories SIC 3714 Establishments primarily engaged in manufac turing motor vehicle parts and accessories but not engaged in manufacturing complete motor vehicles Establishments primarily engaged in manufacturing tires and tubes are classified in Industry 3011 automobile glass in Major Group 32 automobile stampings in Industry 3461 ve hicular lighting equipment in Industry 3642 ignition systems in Industry 3694 and storage batteries in Industry 3691 In addtion to the specific exclusions noted above a considerable number of components parts and accessories for motor vehicles are classified in other SIC industries and are based on the characteristic of the product itself rather than the specific application The U S Bureau of the Census lists some of these other important exclusions 4 automotive hardware SIC 3429 diesel and semidiesel engines SIC 3519 sealed beam and other electric lamps SIC 3641 auto mobile radios SIC 3651 and carburetors and pistons SIC Truck Trailers SIC 3715 Establishments primarily engaged in manufac turing truck trailers and truck trailer chassis for sale separately but not engaged in manu facturing complete trucks and buses One of the data sources for this report is the Census of Manufactures of the U S Bureau of the Census In collecting and publishing statis tics for this group the Bureau of the Census has combined SIC industries and 3714 into Census code 3717 Motor Vehicles and Parts This grouping was made because large establishments which have integrated operations produce parts or bodies as well as assemble complete vehicles This complexity in the struc ture of the industry group has prevented the development of output per man hour indexes for the component 4 digit industries Census of Manufactures 16 SIC Codes Census Code Truck and Bus Bodies SIC 3713 and 3 Truck Trailers SIC man hours based primarily upon published BLS data supplemented by special BLS surveys were used as weights for from 1963 forward 1963 man hours were used The motor vehicles and parts index represented about 94 percent of the total weight in the output index for the group the remaining weights were divided between truck and bus bodies and truck trailers See appendix A A Motor Vehicles and Parts SIC Census Code 3717 To obtain the output index for this industry group separate indexes were constructed for 1 passenger cars and equipment 2 trucks and buses and 3 replacement parts and ac cessories These indexes were combined with 1958 aggregate value of shipments weights for 1957 63 and 1963 weights for 1963 and subsequent years The value of shipments data were ob tained from the 1963 Census of Manufacturers Although combining these indexes with total man hour weights would have been desirable separate man hour data for each of these prod uct groupings were not available 1 Passenger Cars and Equipment The output index for passenger cars and equip ment which represents about three fourths of the motor vehicles and parts industry was derived by combining two production indexes One for passenger cars with standard equip ment and another for optional equipment These two indexes were combined with base year 1958 and 1963 aggregate value weights derived from detailed production and unit value data General Procedures The indexes for the motor vehicles and equip ment industry presented in this report were developed according to the general procedures followed by the Bureau of Labor Statistics for deriving industry output per man hour indexes For an industry producing a single homogeneous product the indexes measure the change over a period of time in the ratio of the number of units produced to the number of man hours expended For an industry producing many products such as the motor vehicles and equipment industry the indexes measure the change in the ratio of a composite of the p r o d u c t s appropriately weighted to the man hours To derive the output per man hour index an output index is developed and is divided by the corresponding man hour index To construct industry output per man hour measures the preferred output index is obtained by weighting the quantities of the industry s products by the average man hours required to produce one unit of each product in a specified year Thus those products which require more labor time are given more importance in the output index For the automotive industry how ever unit man hour data are not available for most of the products and the substitution of weights which are assumed to be proportional to unit man hours was necessary Both unit value and unit value added weights were used as substitutes Output Indexes The output index for the motor vehicles and equipment industry was constructed by compu ting indexes for three major component indus tries and combining these indexes with aggregate man hour weights 5 The three industries with in the group are 1 Motor Vehicles and Parts Passenger Cars with Standard Equipment The output index for this component of the indus try was derived by removing from the change in current value of passenger car production the change in prices To obtain abase year weighted production index consistent with the other seg ments of the output index the index of current value of production should be divided by a current year weighted price index as noted in the follow ing formulation j This procedure is equivalent to combining quantities of products with unit man hour weights 17 Value of produc r Price index Output index tion index Paasche Laspeyres 2 PiQi 2PoQo 2 PiQi 2 PoQi The list of cars selected for pricing changed frequently during the 1957 66 period to reflect changing models increased coverage and shifts in the volume sellers Price imputation patterns were shifted concurrently The price indexes related to the selected models were adjusted for differences in quality i e for additional features and product improvement or deterioration 8 2 PoQi SPoQo where P represents prices Q quantities and sub scripts i and o refer to current and base year values respectively An effort was made to derive a physical prod uction measure for passenger cars with standard equipment by utilizing detailed data on calendar year production of automobile by nameplate Chevrolet Buick Dodge etc model Bel Air Galaxie 500 etc body style convertible 2 door hardtop etc and number of cylinders This detail resulted in approximately 500 separate product classifications each year For the base years of 1958 and 1963 these automobile types were grouped by unit values into weight classes with 100 class intervals For later years the current models were compared with the base year models If a new model was introduced or if the specifications including standard equip ment were changed significantly an appro priate base year weight class had to be deter mined The comparability of the current models was determined after examination of data from several sources including wholesale values and specification changes from New Car Cost Guide and Official Used Car Guide 9 BLS Wholesale Price Indexes and a special listing made by the automobile manufacturers of the models they considered generally equivalent from year to year The volume and complexity of the annual changes taking place in passenger car produc tion meant that the determinations of appro priate weight classes were often subjective and could lead to a serious bias As a result of these difficulties a more accurate index could be obtained by analyzing the information available The current value of production for each year was calculated by multiplying calendar year production of passenger cars including standard equipment for approximately 500 product clas sifications J by the introductory wholesale price for each classification as reported in the New Car Cost Guide 7 Prices exclude excise taxes and freight charges The price index used for this industry was prepared especially for this report and is based on the data and techniques underlying the develop ment of the BLS Wholesale Price Index for Passenger Cars WPI The differences from the published index essentially reflect ex clusion of imported cars and use of current year weights rather than base year weights November data were used as the best match for the introductory prices used for current valua tions Each of the specified domestic car models which were priced for the Wholesale Price Index for a given period was selected to represent a broader range of models so that all domestically produced cars would be included either directly or indirectly Thus for 1966 the price indexfor a priced model was usually given a weight that reflected not only the value of production of all models which have the same nameplate but also the value of production of unpriced nameplates made by the same company 8 For further detail on the techniques and guidelines used in adjustments fo r quality changes see Margaret S Stotz Introductory Prices of 1966 Automobile Models Monthly Labor Review February National Automobile Dealers Used Car Guide Company Washington D C 6 Detailed production breakdown was re ceived directly from automotive manufacturers J j Automobile Invoice Service Company a division of the Chek Chart Corporation Chicago Illinois 18 by applying model year installation percentages from Ward s to the calendar year production data for cars Installation percentages include both standard and optional equipment Therefore standard equipment as determined from New Car Cost Guide and Auto Bluebook 11 was sub tracted from the total installed equipment on the price and quality changes for the sample cars selected for the BLS Wholesale Price Index and assuming that the price movements of the individual cars properly weighted would rep resent all cars Ideally the output index should be unit man hour weighted Since the passenger car with standard equipment accounts for about 60 per cent of the total weight a partial check was made on the validity of the assumption that unit man hours weights tend to be proportional to unit value weights A special examination of unpub lished data from both the 1958 and 1963 Census of Manufactures was made for establishments both specializing in automotive assembly and fabrication and highly integrated i e value added was more than 75 percent of the value of shipments A regression equation was de veloped from the weighted establishment aver ages for unit values and unit man hours The relative weights obtainable from the relevant range of unit values corresponded fairly closely with relative weights derived from the unit man hours developed from the regression equation The weights for the optional equipment items were derived from wholesale prices for each auto series Fairlanes Tempests Val iants etc from New Car Cost Guide When a choice of prices existed for the same item the most popular type of equipment was selected These are used directly as weights for equip ment classified as primary products of the industry since they are produced largely by establishments classified in the motor vehicles and equipment group A fraction of the whole sale price was used as a weight for those items classified as primary products of other indus tries to represent the installation costs incurred by the industry 12 This weight was based on unpublished special analyses of installation costs provided by the motor vehicle manufacturers Optional Equipment This output index was based on production of the major items of non standard equipment installed by the motor vehi cles and equipment industry plus an estimate for all other optional equipment The total items covered directly ranged from 13 in 1957 to 23 in 1966 Production of equipment after 1957 was linked into the index if these items had been available previously to customers but not counted due to lack of adequate information or relative unimportance The 1957 63 output index was based on the annual production of 13 to 17 items See appendix B for list The 1963 66 index was based on 17 to 23 major items When an accessory was introduced as a new item or on an auto series for the first time a unit value weight was derived from the price trend of a similar item or from the price trend of an item from the most closely related series The estimate for all other optional equipment items was based on a comparison between maxi mum v a l u e of optional equipment items per car 13 and maximum value of major items per Actual calendar year production data were available from 1957 to 1963 for automatic trans missions power steering and power brakes from Ward s Automotive Yearbooks 10 For the other accessories production was estimated 11 Currently known as the Complete Auto mobile Pricing Manual published by Automobile Pricing Publications Inc Burlingame Cali fornia 12 Items such as tinted glass and white wall tires which require no additional man hours by the industry are not covered 13 Only those items were considered which were either produced in the industry or had sig nificant installation costs 10 Powers and Company Inc Detroit Michigan 19 car for the passenger car models priced for the price indexes A weighted ratio was used to ad just a production index based on the major items only The list of available equipment for the sam ple cars and the related prices were determined from the New Car Cost Guide The estimated value of the optional items not covered directly ranged from 20 to 25 percent of the total optional equipment index Many implicit assumptions were involve in this type of estimate represent ativeness of sample comparability of installa tion percentages and charges between covered and uncovered item s and similarity of price movements The overall weight of the uncovered sector represents less than 3 percent of the total index of the motor vehicles and equipment index vehicle manufacturers Parts and accessories shipped to or produced by motor vehicle manu facturers are included directly or indirectly in other output indexes Rebuilt motor vehicle engines and parts also are included The ship ments cover export shipments as well as ship ments to distributors dealers wholesalers service stations etc The output index was based on the total value of shipments of motor vehicle parts and acces sories shipped to other than domestic motor vehicle manufacturers Censuscode 37176 plus rebuilt motor vehicle engines and parts Census code 37177 as deflated by BLS Wholesale Price Index 14 1 Motor Vehicles and Equipment Only those parts and accessories which are clas sified in SIC 371 were included See page 16 for definition Value data for 1958 63 were taken from the 1963 Census of Manufactures An estimate was made for 1957 based on the 195758 percentage change in value of sales of replace ment parts and accessories as published by the Automobile Manufacturers Association in Auto mobile Facts and Figures These data were ad justed by BLS to include exports and to exclude replacement batteries Value data for years subsequent to 1963 were taken from the Annual Survey of Manufactures The same adjustment factor for noncovered optional items was used to blow up value of production figures for covered optional equip ment items for both 1958 and 1963 to provide weights for combining the optional equipment index with the index for passenger cars includ ing standard equipment 2 Trucks and Buses The output index for trucks and buses is based on the deflated value of shipments for these two product groups The current dollar value of ship ments for truck tractors truck chassis and trucks is converted into a constant dollar series by using a deflator composed of BSL Wholesale Price Indexes 14 1 Motor Vehicles and Equip ment and Motor Trucks These WPl s were combined with value of shipments weights from the 1963 Census of Manufactures Similarly the shipments data for buses and fire department vehicles were deflated using BLS Wholesale Price Index Motor Coaches To combine this index with other components of industry 3717 base year 1958 and 1963 Cen sus values for codes 37176 plus 37177 were used as weights The industry value was used for 1963 and the product value wherever made was used for 1958 B Truck and Bus Bodies code 3713 The output index for truck and bus bodies was based on the value of output expressed in constant dollars The value of output was derived from data on 1 the industry value of shipments of truck and bus bodies converted to constant dollars plus 2 the net change in the value of finished goods inventories also incon stant dollars Value data were from the Census of Manufactures and the Annual Survey of Manufactures Annual shipments data were obtained from the Census of Manufactures and Annual Survey of Manufactures 3 Replacement Parts and Accessories This index reflects the production of parts and accessories for passenger cars trucks and buses shipped to other than domestic motor 20 For output was measured by the quantity of units shipped since actual production figures are not available after 1963 No inventory adjustment was made but inventories have not been significant for this industry 14 At the same time product detail was revised and re duced Also 1983 unit value weights were used for this period Industry value of shipments for and 1983 exclude resales value of shipments for 1959 62 as it appears in the Census of Manu factures includes resales To exclude resales from the data for intercensal years the 1958 and 1963 ratios of value of shipments without resales to value of shipments with resales were used to interpolate the 1959 62 value of shipments excluding resales For intercensal years after 1963 the 1963 ratio was used to ad just value of shipments Annual value of shipments was deflated by a special industry price index constructed from the yearly averages of BLS Wholesale Price Index Motor Trucks and BLS Whole sale Price Index Motor Coaches In combining the commodity price indexes into an industry price index the weight assigned to WPI was equal to the total value of shipments and inter plant transfers of all truck bodies shipped by all manufacturing establish ments the weight assigned to WPI was equal to the total value of shipments and interplant transfers of all bus bodies Value of shipments weights were from the 1963 Census of Manufactures Beginning of year and end of year values of finished goods inventories were deflated by a special price index constructed from the Decem ber figures of WPI and WPI The commodity price indexes were combined into an industry price index by using the method des cribed in the preceding paragraph Employment and Man Hour Indexes Employment and man hour indexes measure the change in aggregate number of employees or man hours over a period of time Employees and employee man hours are treated as homogene ous and additive Changes in qualitative aspects of employment such as skill efficiency health experience age and sex of persons comprising the aggregate are not reflected in the indexes The man hour data relate to total time expended by employees in establishments classified in the industry group These data include not only the hours spent on primary activities of the establisment but also those on other activities and m is cellaneous operations Paid time for vacations holidays or sick leave when the employee is not at the plant also is included Six labor input indexes were developed for the motor vehicles and equipment group for All employees production workers nonproduc tion workers man hours of all employees man hours of production workers and man hours of nonproduction workers Production workers cover working foremen and all nonsupervisory workers includingleadmen and trainees engaged in fabricating proc essing assembling inspection receiving stor age handling packing warehousing shipping trucking hauling m a i n t e n a n c e repair C Truck Trailers code 3715 The output index for truck trailers was con structed from data on the annual physical quan tities of trailers produced as published in the Current Industrial Reports series of the Bureau of the Census Product detail is by use e g in sulated vans high pressure tanks dump trailers etc and material steel and aluminum For each product was weighted by its 1958 unit valuer See appendix C Unit values were derived from Census of Manufactures data by dividing the total value of shipments and inter plant transfers by the total quantity of shipments and interplant transfers for each product 14 The 1964 Current Industrial Reports for truck trailers states Data on the number of units produced collected for prior years were eli minated in 1964 in recognition of the fact that in this industry no great time difference occurs between products sic and shipments janitorial watchman services product develop ment auxiliary production for plant s own use e g power plant operations and recordkeep ing and other services closely associated with the above production operations The term thus in cludes some indirect as well as direct plant labor Employment and Production Worker ManHours Employment indexes are based on BLS data for the motor vehicles and equipment in dustry group SIC 371 These are 12 month averages of persons who worked full or parttime or received pay for any part of the payroll period which includes the 12th of each month Nonproduction workers include employees engaged in the following activities Executive purchasing finance accounting legal person nel cafeterias medical professional and tech nical activities sales sales delivery e g route men advertising credit collection and in installation and servicing of own products routine office f u n c t i o n factory supervision above the working foreman level and force account construction employees on the payroll engaged in construction of major additions or alterations to the plant who are utilized as a separate work force Man hour indexes for production workers are based on production worker employment and average weekly hours data published by the BLS Man hours include all the hours at the plant plus all paid time for vacations holidays disability time and personal time off when the employee is not at the plant Overtime and other premium pay hours are included on the basis of actual time at the plant All Employee Man Hours The index of all employee man hours is derived from three com ponents 1 production worker man hours de rived from BLS data 2 number of nonproduc tion workers derived from BLS data and 3 an estimate of average annual paid hours of nonproduction workers derived from special confidential company studies For consistency with production worker man hours these data also include time paid for vacations holidays disability time and personal time off Employment and man hour indexes for the motor vehicles and equipment industry group were derived from data published by the Bureau of Labor Statistics in Employment and Earnings Statistics for the United States and subsequent monthly issues of Employment and Earnings and Monthly Report on the Labor Force 22 Appendix A W eighting Diagram for the Motor V ehicles and Equipment Industry W eights E xpressed as Percent of Total W eights Percent 19 S 3 1958 Output Components Motor vehicles and equipment in d e x A Motor veh icles and p a r t s P assen ger cars and equipm ent a P assen ger cars and standard equipm ent b Optional eq u ip m en t Trucks and b u ses Replacem ent parts and a c cesso ries B Truck and bus b o d ie s C Truck t r a i l e r s Type of index DV PP DV DV DV PP 1 DV Deflated value PP P hysical production Notes Indexes of A B and C are com bined with m an hour w eights A and 3 are com bined with value of ship m ents w eights A 1 a and b are com bined with value of produc tion w eights See text for fuller explanation Source Bureau of Labor S tatistics U S Departm ent of Labor 23 Appendix B A ccesso ries Covered in the Optional Equipment Output Index Item s prim arily cla ssified and installed in the m otor veh icles and equipment industry Autom atic tran sm ission Power brakes Power steering O verdrive Window w asher H eater L im ited slip differential 4 sp eed synchrom esh tran sm ission E lectric w ipers Added after 1963 D isc brakes Speed regulating device Movable steering Vinyl tops Item s prim arily cla ssified outside but installed by the m otor veh icles and equipment industry Air conditioner Radio Power windows Power seats and 6 w ay Backup lights Power antenna Bucket seats Added in 1963 Rear power window station wagons After 1963 power seats are separated into 2 w ay and 4 and 6 way sea ts 24 Appendix C Unit Value W eights U sed in Com piling the Truck T railer Output Index SIC 3715 Unit value weights Product group I Complete tra ilers A Vans Insulated sem i in su lated and r e fr ig e ra te d S te e l A lu m in u m F u r n itu r e S te e l A lu m in u m Other closed top v a n s S te e l A lu m in u m Open top v a n s S te e l A lu m in u m B Tanks Petroleum and aircraft r e f u e le r s Carbon and alloy s t e e l Stainless steel A lu m in u m C hem ical food and sanitary Dry m aterials and other low p ressu re ta n k s High p ressu re C Pole and lo g g in g Single axle Tandem axle D P la tfo rm Racks livestock and s ta k e 2 Grain b o d ie s Other platform s E Low bed heavy h a u le r s r Appendix C Unit Value W eights U sed in Compiling the Truck T railer Output Index SIC Continued Unit value weights T95B 1963 Product group F Dump tr a ile r s G A il other tra ilers II T railer ch a ssis only for sale sep arately III Detachable trailer van bodies for sale se p a r a te ly Includes dump trailer ch a ssis in 1963 2 Includes dump trailer ch a ssis in 1958 Source 1963 Census of M anufactures table 6A I APPENDIX D MOTOR VEHICLES AND EQUIPMENT INDUSTRY AVERAGE ANNUAL RATES OF CHANGE PERCENT 1 To obtain annual rate of change between any 2 years shown find row for initial year at left of table and read figure in that row under the term inal year shown on top Output per A ll Em ployee Man Hour Term inal year M 00 Initial year I Output In itia l year I I W7Z All em ployee man hour Initial year TWTTTT I I See footnote at end of table APPENDIX D MOTOR VEHICLES AND EQUIPMENT INDUSTRY Continued AVERAGE ANNUAL RATES OF CHANGE PERCENT 1 To obtain annual rate of change between any 2 years shown find row for initial year at left of table and read figure in that row under the term inal year shown on top Output per A ll Em ployee Term inal year Initial year I Initial year I All em ployees I Output per production worker man hour I n itia l year I See footnote at end of table A P P E N D IX D M O T O R V E H IC L E S A N D E Q U IP M E N T IN D U S T R Y C o n tin u e d A V E R A G E A N N U A L R A T E S O F C H A N G E P E R C E N T 1 T o o b ta in a n n u a l r a te o f ch a n g e b e tw e e n an y 2 y e a r s sh o w n fin d r o w fo r in itia l y e a r at le ft of ta b le and r e a d fig u r e in th at ro w u n d er th e te r m in a l y e a r sh ow n on t o p P r o d u c tio n W o rk er M a n H o u r s T e r m in a l y e a r Initia l year I I960 0TZ Z O utput p e r p r o d u c tio n w o r k e r Initia l year I I P r o d u c tio n w o r k e r s In itia l year I I S e e fo o tn o te at en d o f t a b le A P P E N D IX D M O T O R V E H IC L E S A N D E Q U IP M E N T IN D U S T R Y C o n tin u e d A V E R A G E A N N U A L R A T E S O F C H A N G E P E R C E N T 1 T o o b ta in an n u al r a te o f ch a n g e b e tw e e n a n y 2 y e a r s sh o w n fin d ro w fo r in itia l y e a r at le ft o f ta b le and r e a d fig u r e in th a t ro w u n d er th e te r m in a l y e a r sh o w n on to p O utput p e r N o n p ro d u ctio n W o rk er M a n H o u r T e r m in a l y e a r Initial 1958 year I I S S N o n p ro d u ctio n w o r k e r m a n h o u rs In itia l year I n itia l year I on O utput p e r n o n p ro d u ctio n w o r k e r I S e e fo o tn o te at en d o f ta b le A P P E N D IX D M O T O R V E H IC L E S A N D E Q U IP M E N T IN D U S T R Y C o n tin u ed A V E R A G E A N N U A L R A T E S O F C H A N G E P E R C E N T 1 T o o b ta in an n u al r a te of ch a n g e b e tw e e n a n y 2 y e a r s sh o w n fin d ro w fo r in itia l y e a r a t le ft of ta b le and r e a d fig u r e in th at ro w u n d er the te r m in a l y e a r sh ow n on to p N o n p ro d u ctio n w o r k e r s T e r m in a l y e a r Initia l I year I A ll a v e r a g e a n n u al r a te s of ch a n g e a r e b a s e d on the lin e a r le a s t s q u a r e s tr e n d s of th e lo g a r ith m s of th e in d ex n u m b e r s 31 OTHER RECENT BLS PUBLICATIONS ON PRODUCTIVITY AND AUTOMATION Indexes of Output Per Man Hour Selected Industries 1939 and Bulletin 1612 October pp 65 cents Air Transportation Industry Report 308 August pp Free Aluminum Rolling and Drawing Industry Report 314 December pp Free Concrete Products Industry Report 300 November pp Free Footwear Industry July pp Free Gas and Electric Utilities Industry April pp Free Hosiery Industry Report 307 June pp Free Man Made Fibers Industry October pp Free Primary Aluminum Industry September pp Free Radio and Television Receiving Sets Industry November pp Free Labor Productivity of the Steel Industry in the United States Report 310 July pp Free Productivity A Bibliography July 1966 Bulletin pp 65 cents Industry Productivity Projections A Methodological Study pp Free Indexes of Output Per Man Hour Hourly Compensation and Unit Labor Costs in the Manufacturing Sector June 1967 2 pp Free Indexes of Output Per Man Hour for the Private Economy March 1968 5 pp Free Indexes of Output Per Man Hour Hourly Compensation and Unit Labor Costs in the Private Sector of the Economy and the Nonfarm Sector May 1968 4 pp Free Implications of Automation and Other Technological Developments Technology and Manpower in the Textile Industry of the 1970 s Bulletin cents Manpower Planning for Technological Change Case Studies of Telephone Operators Bulletin pp 30 cents Job Redesign for Older Workers Ten Case Studies Bulletin pp 40 cents Technological Trends in Major American Industries Bulletin pp 45 cents Technological Change and Disemployment of Labor at the Establishment Level pp Free Impact of Office Automation in the Insurance Industry Bulletin pp 45 cents Manpower Planning to Adapt to New Technology at an Electric and Gas Utility Report pp Free Outlook for Numerical Control of Machine Tools A Study of a Key Technologi cal Development in Metalworking Industries Bulletin pp 40 cents Labor and Material Requirements for School Construction Bulletin pp 30 cents Private One Family House Construction Bulletin pp 30 cents Public Housing Construction Bulletin pp 30 cents College Housing Construction Bulletin pp 30 cents Sewer Works Construction Bulletin pp 30 cents Construction of Federally Aided Highways and 1964 Report pp Free Sales publications may be purchased from the Superintendent of Documents Washington D C 20402 or from regional offices of the Bureau of Labor Statistics at the addresses shown below Free publications are available as long as the supply lasts from the Bureau of Labor Statistics U S Department of Labor Washington D C 20212 R egional O ffices R egion I F ed eral Building Room 1603 A G overnm ent Center B oston M ass 02203 Region IV 1371 P each tree Street NE Suite 540 Atlanta Ga 30309 R egion VII M ayflow er Building 411 North Akard S treet D allas T exas 75201 R egion II 341 Ninth Avenue New York N Y 10001 R egion V 219 South D earborn Street C hicago R egion III J efferson Building Room C hestnut Street Philadelphia P a 19107 R egion VI 911 Walnut Street 10th F loor K ansas City Mo 64106 R egion VIII 450 Golden Gate Avenue Box 36017 San F r a n c isc o C alif US GVRMN PININ OF E OENET R T G FIC U S DEPARTMENT OF LABOR POSTAGE AND FEES PAID BUREAU OF LABOR STATISTICS U S DEPARTM ENT OF 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Indexes of Output Per Man-Hour: Motor Vehicles and Equipment Industry, 1957-66 : Bulletin of the United States Bureau of Labor Statistics, No. 1613

DATE: December 1968

AUTHOR:

United States. Bureau of Labor Statistics

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United States. Bureau of Labor Statistics. Indexes of Output Per Man-Hour: Motor Vehicles and Equipment Industry, 1957-66 : Bulletin of the United States Bureau of Labor Statistics, No. 1613 , Washington, D.C: U.S. G.P.O., December 1968, https://fraser.stlouisfed.org/title/4751, accessed on December 10, 2019.

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PUBLISHER: U.S. G.P.O.

PLACE: Washington, D.C

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