When the first Honda SUT pickup rolls off the line next year in Ontario, it won't be merely the launch of another model. It will mark Honda's arrival as a full-line North American producer and underscore the stunning achievements of its first quarter-century of production here.
The scrappy Japanese upstart that began turning out motorcycles 25 years ago in Marysville, Ohio, helped change forever the landscape of U.S. automaking. The Marysville adventure launched a surge of transplant activity by global players who understood that to cash in fully on the vast U.S. market, they had to make things here, not just sell them.
Honda didn't just export a corporate culture to the United States. It allowed the Honda Way to evolve so the new American entity could produce vehicles as nimbly - and with the same high quality - as the parent company did in Japan. It rewrote the rules on how global-looking companies expanded into new markets.
The transplant companies - with Honda leading the way in many areas of improvement - radically changed the way vehicles were built in the United States. The complacent Big 3 soon were scrambling to become as nimble, efficient and skilled as their new neighbors. The bar got higher, and everyone got better.
Honda also showed that it was possible to build cars without the UAW, and to look beyond traditional automaking states such as Michigan and Ohio.
It also pioneered ways of working with suppliers to cut costs, boost quality and build strong relationships.
That's quite a leap from a $30 million motorcycle plant in Ohio.
$8 billion empire
Honda is now an integrated North American manufacturer with an $8 billion empire of technical and production assets here.
Civics roll down the highly automated assembly line at the East Liberty, Ohio, plant in 1995. PHOTO: ALAN R. KAMUDA
Honda stamps its own steel panels, casts its own aluminum blocks and engine heads and casts its iron cylinder sleeves. It also cold-forges steel crankshafts and driveshafts in Anna, Ohio.
The first U.S.-built Accord in 1982 relied mainly on parts shipped from Japan. Honda's North American-made vehicles now contain approximately 95 percent local content - about the same level as vehicles made by the Big 3. Last year Honda bought $12.6 billion worth of parts from 620 North American suppliers.
The local purchasing was made possible by engineering and r&d personnel in Marysville and Torrance, Calif.
North American stylists, engineers, and manufacturing personnel are capable of planning new models. In Marysville alone, 950 people operate an r&d center that transforms studio designs to manufactured products.
Forging an identity
But Honda's real achievement of the past 25 years hasn't been just steady growth, says Michael Flynn, director of the University of Michigan's Office for the Study of Automotive Transportation. Rather, it is the fact that Honda's U.S. manufacturing presence enabled the company to change its world identity.
"Honda was still perceived as a motorcycle company in the 1970s," says Flynn, who has monitored the company's evolution in North America since the early 1980s. "Even their Japanese competitors viewed them as a motorcycle company. Honda realized that by coming to America it could really stretch out and become something more."
When Honda arrived in Ohio it was merely a pesky rival to its larger Japanese competitors. It was only the fifth-largest Japanese automaker that year, behind both Mitsubishi Motors Corp. and Mazda Motor Corp. In Japan, Honda also trailed Suzuki and Daihatsu.
But the threat of Honda making a play for U.S. small-car sales in the early 1980s sparked an investment wave that has yet to subside. Nissan Motor Co. arrived in 1980 to make small pickups and Sentras in Smyrna, Tenn.
Toyota Motor Corp., Mitsubishi, Mazda, Suzuki, Isuzu Motors Ltd. and Fuji Heavy Industries' Subaru unit followed with North American plants during the 1980s.
By the 1990s, the allure of U.S. manufacturing also brought in Germany's BMW AG and Mercedes-Benz. Hyundai Motor Co. built a plant in Bromont, Quebec, in the late 1980s. Hyundai closed the Bromont plant in 1995. It is currently building a $1 billion car assembly plant in Montgomery, Ala.
Foreign automakers either operate or are constructing 34 auto assembly, engine or major component plants in the United States. They have invested $34.7 billion in U.S. manufacturing and directly employ 65,000 people, according to the American International Automobile Dealers Association.
In addition to making import-brand auto companies more competitive, U.S. manufacturing also has given them a political voice. Through groups such as AIADA and the Association of International Automobile Manufacturers, the companies have spoken up on trade issues, tariffs, regulation and legal issues.
|Honda, then and now|
|U.S. activity||Motorcycles||Wide range of vehicles, components, engines|
|U.S. investment||$30 million||$8 billion|
|U.S. vehicle sales||353,291||815,896 (through July)|
|North American employees||64||25,000|
Designed in America
All that can't be credited to Honda. In the early 1980s, the Japanese auto industry was straining at the leash to reach American consumers, and little could have held them back. But it was the small and scrappy Honda that made it to the United States first. Once Honda took root, the U.S. automotive landscape changed.
Next year's SUT debut is symbolic. The pickup will use a U.S.-made high-torque 3.8-liter V-6 that early unofficial estimates pegged at more than 240 hp. It will feature four-wheel drive, stability control, seating for five and a 5-foot cargo bed.
The notion of creating something such as the SUT in North America 25 years ago would have been ludicrous. Honda could not do then what it can do now.
The pickup is derived from the Honda Pilot SUV - a vehicle that was designed for the United States by Honda North America's engineering and r&d operations. The Pilot, in turn, is a derivative of the Acura MDX and the Honda Odyssey minivan - all developed in North America.
Honda resisted jumping into the truck market until well into the 1990s, even as industrywide truck and SUV sales here were roaring. At the 1996 Chicago Auto Show, Honda showed Americans the CR-V, its small Japan-only SUV. But company officials were vague about whether they wanted to sell the SUV here. They are now selling about 14,000 CR-Vs a month.
Three years later - with consumers buying its latest full-sized Odyssey minivans at a faster rate than the Alliston, Ontario, factory could build them - Honda decided to build a second Odyssey factory in Lincoln, Ala.
And it wanted to move fast. In the 1999 speech in which he announced the Alabama plant project, Honda North America Inc. President Koichi Amemiya also asked the project leaders to find a way to trim six months out of their construction schedule.
An agent of change
The first Accord was built in Marysville in 1982.
Being caught off guard set Honda on a mission to make its factories more agile and less expensive to retool. Tools and dies that normally took months to redesign and redeploy were replaced by automated welding systems that could be changed mostly by relatively simple reprogramming.
Honda wanted every factory to be capable of building any of its products, or to produce any new model as quickly and inexpensively as possible.
That manufacturing model has been embraced by automakers worldwide. General Motors prides itself on flexible North American factories that can shift production quickly between cars and trucks.
Toyota uses a common body weld system capable of changing to new models on short notice. Nissan's newest plant in Canton, Miss., can shuffle volume among five models.
"You can't underestimate the effect that Honda has had, not just on the Big 3 but on the entire North American industry," Flynn says. "The industry has closely studied Honda since they first arrived here. Look at the enormous changes that suppliers have gone through since then.
"Honda worked with U.S. suppliers to improve their processes, to find ways to reduce costs, and even to start bringing them inside of new model projects to help design-in their parts," he says. "That wasn't done here before Honda."