A Brief History of Honda's American Manufacturing

Honda had painstakingly marshaled a reputation of superb quality for its made-in-Japan motorcycles. But in the '70s, consumers' attitudes had been hardened by years of disappointment and frustration in American-made products, best illustrated by General Motors' problems with the Vega, Ford's with the Pinto, and the AMF-built Harley-Davidsons of the time. Honda's first U.S. plant offered an opportunity to change consumers' minds about American quality. But the effort had to succeed. If it did, Honda could proceed with the $250-million auto plant it planned to build. If the Marysville Motorcycle Plant (MMP) failed because of quality problems, Honda's reputation, and its future, could have been damaged beyond repair.

Of course, as history shows, the Marysville experiment did everything expected of it: It upheld Honda's reputation for quality and allowed the company to expand with additional plants in this country. Although the MMP was built primarily for motorcycles, the plant was designed to allow production flexibility, including the assembly of ATVs. Ten years after the first motorcycle was assembled, the best-selling ATV in America--the FourTrax® 300--rolled off the line. Honda followed the MMP with the Marysville Auto Plant (MAP, the first Japanese auto plant in the U.S.), the Anna Engine Plant (AEP), Honda Engineering North America (EGA), the East Liberty Auto Plant (ELP), Honda Transmission Manufacturing (HTM), Honda Power Equipment (HPE), and Honda of South Carolina (HSC), the company's first exclusive ATV plant.

Several reasons account for the success of Honda's U.S. plants. Start with just the physical aspects. Both the 260,000-square-foot MMP and 280,000-square-foot HSC plants are far smaller than their counterparts in Japan. Japanese plants in particular were of little use as models, in part because of their vastly greater production capacity, and because of their hodgepodge nature; they had been built and then expanded repeatedly over the years.

What the American plants needed was the strictest efficiency and, in the MMP's case, flexibility to assemble different models. As Takao Shirokawa, one of the MMP's original team members, said, "The plant was designed to minimize traffic between adjacent departments, to try to minimize space, and try to maintain efficient logistics inside the plant. We tried to make the most efficient, but small, motorcycle plant. Profitability was the key to this plant. So [the question was] how to minimize the cost of assembly. We tried to pursue efficiency."

One crucial element of efficiency and quality control at HAM is the use of Honda's own assembly and production machinery. Tour the MMP and the HSC ATV plant, as well as Honda's other facilities, and you'll see the usual array of Japanese die-cast machines and American tubing-benders. But most of the high-tech precision equipment was designed and built by Honda Engineering. Welding equipment used for ATV frames, as well as stamping dies, injection molds and other machines, all bear the Honda Engineering stamp.

The American Advantage

Building machines to make machines also provides Honda with a rapid response time.

In a competitive market, the ability to respond quickly to customer needs has given Honda an invaluable marketing edge. At Honda Engineering-including Honda Engineering of North America--engineers work closely and early in the design process with those in R&D, saving time in creating new jigs, fixtures, stamps, and dies. The arrangement also allows better, more rapid maintenance, as well as kaizen--the Japanese word for improvement--of equipment and processes.

Physically, there's little else about the MMP and HSC that break new ground. The processes and the people make the greatest difference. Take, for example, the sophisticated powder-coat paint process used for FourTrax frames at both the MMP and HSC. This efficient, high-quality, low-emissions technology received the Ohio governor's award for Outstanding Achievement in Pollution Prevention in 1998.

Apart from such purely physical aspects, the attitude the region's inhabitants bring to their work is also crucial. Before construction began on the MMP, Honda officials visited several Midwest manufacturing plants, and were convinced the people there owned a work ethic similar to that of their Japanese counterparts.

What's more, Honda treats its associates in ways almost unheard of at other plants. For instance, open communication allows associates, as Honda's employees are called, to make assembly techniques more efficient. And every associate is treated equally, down to the seemingly minor detail of all employees sharing a single common lunch room, rather than being segregated into labor and management dining areas.

Honda also offers a single pay scale for all assembly associates, which facilitates movement from department to department. Such movement allows cross-training of associates, the development of new skills and a clearer vision of the entire assembly process that has led to many associate-driven improvements over the years. Keeping associates involved and satisfied is a key point in maintaining Honda's high level of quality.

Honda also ensures quality by working closely with its suppliers. At first that was difficult at the MMP because American suppliers were unwilling to supply Honda with parts because of the low production numbers (150 Gold Wings a day in 1981-1983 vs. 1000 units a day at one of Honda's Japanese plants). Suppliers were also unaccustomed to the level of quality Honda demanded, and were initially unwilling to make the investments necessary to provide such quality at such low volumes.

Honda persisted, though, offering training, advice, and even furnishing equipment--an unheard of relationship between client and vendor at the time, and still rare in this country. Yet most suppliers appreciated Honda's involvement, because it allowed them to improve their own quality, and so expand their business. These days, Honda of America Manufacturing (HAM) spends more than $6.4 billion on goods and services from some 450 vendors and suppliers.

The Honda Difference: Putting it Together

Perhaps the most important way Honda ensures the highest quality in its ATVs and motorcycles is by guaranteeing and monitoring quality every step of the way. "It starts with very high-grade materials," says one company spokesman, "continues with quality suppliers, and then, in a phrase we use, quality in the process. That means we have standards, measurements, repeatable and monitorable, whether it's for a weld, or for material specs for frame material, or the quality of the injection-molded plastic material, or how long it stays in the mold--all those things are very quantifiable for high quality and durability.

"Finally, the ultimate standard we apply is customer satisfaction, which has to do with the customers' expectations and how they use the product. If they put a premium on durability and longevity and performance, we have to think up what materials and processes will ensure those things that will satisfy the customer for many years of use."

At the outset, with the construction of the Marysville Motorcycle Plant, Honda took an enormous gamble. But Honda bet that the quality of its U.S.-assembled motorcycles and ATVs would lead to success, and so it ensured quality at every level, with people, processes, material, and machinery.

That commitment to quality led to the building of seven more facilities in this country over the following two decades, for a total of eight, with a total work force of more than 20,000 associates, and a capital investment of $4 billion in Honda's North American Manufacturing and R&D operations.

Honda built its reputation on that most enduring value--quality-from the very beginning, and never relented. Every motorcycle and ATV that rolls out of the MMP and HSC is a testament to that lifelong commitment.

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