Honda of America Manufacturing Inc. likes to give its managers responsibility, and Larry Jutte personifies the culture.
It's been a busy year. In addition to launching a new motorcycle line in Ohio last month, he is running a new manufacturing model that will see synchronous engine and vehicle production. That model will be repeated later this year at Honda's new Lincoln, Ala., minivan plant. Jutte also is supporting the launch of the new Lincoln engine plant, as well as ensuring the readiness of the Honda supply line to get Lincoln up and running.
While traveling recently, Jutte took time to speak with Staff Reporter Lindsay Chappell.
When Odyssey production starts later this year in Alabama, it won't be a mere duplication of the Odyssey plant in Ontario. A lot of things will be different from the existing operation. How different is the supply line?
The factory itself, certainly, is not a duplication. As we evolve we learn from our past lessons, and we apply that to everything we do, whether it's our own manufacturing or our supply base. We don't want to simply duplicate things, even though there are things we want to standardize globally to give ourselves more flexibility and speed to address market changes. If we can do something in-house, but our supply base can't move at that speed, then it really doesn't matter at the end of the day.
The chain won't be 100 percent the same. A lot of the suppliers are exactly the same, but there are some changes that are either very minor or very strategic. For those suppliers who elected to move with us to Alabama, they either felt it was the best strategic move for their partnership with Honda, or possibly it was simply a capacity issue.
Should the industry expect to see more engine component suppliers move to the area as engine production ramps up in Alabama?
Not necessarily. In engine components, you're often talking about a very capital-intensive process. It may make more sense for you to supply from a single location, rather than trying to spread it out over several locations. It's really dictated by volume, and certainly we don't have that. If an engine supplier decided it's in his best interest, that's his business. I certainly wouldn't be encouraging it at this point.
Speaking of which, how is it Honda can justify the investment to build a new engine plant for only 120,000 units a year?
Honda Motor Co. is a very prudent investor. We use capital very wisely. We take steps toward what we believe is an ideal way of operating. We don't necessarily take the initial investment to that ideal level - we'll take the first step, and as volume increase, we'll take the second step, the third step. We'll continue, meanwhile, to improve on the characteristics of running that business.
You mentioned the capacity issue among your suppliers. You're still expanding; do you expect to see some expansion from your North American supply chain?
It's hard to talk generally about this. Every situation is different. Some of our suppliers have lost other business in the industry lately, and they have no need for any kind of brick and mortar expansion right now. They're just doing a reallocation within their walls for us.