What's the right size for an assembly plant?

In recent years, assembly plants have been exhaustively compared and ranked in terms of their relative performance in the areas of labor productivity and quality. Yet, almost half of assembly vehicle costs can be traced to the capital invested and reinvested in these enormous facilities. Scale or vehicle capacity is a major determining factor of the capital efficiency of assembly plants. It appears that the final arbiter of scale for modern assembly plants are the markets they are designed to serve. In a comparison, Japanese assembly sites would appear to possess an advantage in capital efficiency over Big Three North American assembly operations. There are many reasons for the Big Three to consolidate and increase the average capacity of their assembly operations. Given time, they will match the Japanese in scale economies. This will require the further concentration of product lines in a smaller number of plants, and the final redesign of their vehicle platforms for global markets.