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Despite a steady stream of bankruptcies, layoffs and plant closings, there is hope for recovery of the critically ill domestic auto industry.

But not if U.S. automakers waste millions of dollars on such things as developing 81 side-mirror combinations for a single new vehicle, as one automaker is doing. And not if another continues to use 140 different types of catalytic converters in exhaust systems across its vehicle lineup, when the best Japanese automaker uses just five.

Those are some real-world examples of cost excesses cited by Laurie Harbour-Felax, former vice president of Harbour Consulting Inc., which annually ranks the productivity of American and Japanese automakers building cars and trucks in the United States. Harbour-Felax, now an independent consultant, says skyrocketing health care costs, high wages and rising material prices are not domestic automakers’ biggest problems.

“We just keep chasing our tail by closing plants and hoping the next new vehicle is going to give us more market share,” Harbour-Felax said in a recent speech to the Society of Automotive Analysts. “We’re focusing just on the result of the problem and not on the root cause.”

She says the most serious competitive issues facing General Motors Corp. and Ford Motor Co. (and, to a lesser degree, the Chrysler Group) involve too much differentiation in vehicle assembly processes and in parts and components, such as catalytic converters, that the customer doesn’t care about.

Domestic automakers could add as much as $1,000 per vehicle in profit to their bottom lines if they were as good as the best Japanese automakers in those areas, according to Harbour-Felax. That amount would restore Ford, which is losing $139 per vehicle, to profitability. It would nearly erase the $1,227 per vehicle loss being incurred by GM.

Despite impressive gains made by domestic automakers in vehicle quality, their warranty and recall costs are nearly double those of the best Japanese automakers. Matching Japanese automakers’ performance would add as much as $500 per vehicle to domestic automakers’ profits, Harbour-Felax said.

Domestic automakers could reap another $200 to $300 per vehicle by reducing workers’ vacation days, holiday and break times to the same levels as those of workers at nonunion Japanese automakers, she said.

She acknowledged that negotiating such changes with labor unions already outraged by Delphi Corp.’s bankruptcy and GM’s plan to cut 30,000 manufacturing jobs would be difficult.

There isn’t a lot new in Harbour-Felax’s prescription for restoring the auto industry. Automakers have long been working to build more vehicles off similar under-body architectures and use more common parts that the customer doesn’t notice across vehicle models.

So why haven’t domestic automakers made more progress?

Harbour-Felax blames U.S. automakers’ corrosive internal culture, which she says must change soon to give them a shot at survival. Automakers want manufacturing processes to be common in their assembly plants around the world, but promote people who put their own stamp on them, she said. They also say they want partnerships with their suppliers, but reward purchasing employees for squeezing pennies and nickels from those suppliers.

“The truth is that at the foundation of all of these issues, the culture has to change in order for us to even begin attacking these large (problems) and be able to make a difference,” Harbour-Felax said.