The result is a lean and highly innovative organization that’s helping to change how America builds its cars. Dan Harvey describes the Ohio-base company’s 20-year evolution.
The Honda brand name became firmly fixed in the American consciousness in the early 1960s, strongly associating itself in consumers’ minds with a small motorcycle. Members of the boomer generation may recall when Beach Boy Brian Wilson celebrated the vehicle in his song “Little Honda,” a 1964 hit record for the Hondells (“First gear, it’s alright/Second gear, I lean right/Third gear, hang on tight/Faster, it’s alright!”).
Since then, Honda has come to represent much more than that glorified scooter, as the international Honda Motor Company firmly entrenched itself in the U.S. marketplace by establishing the Ohio-based Honda of America Manufacturing Inc.
While motorcycles remain a Honda mainstay, U.S. consumers have embraced other company products, in particular the Honda Civic and Accord automobiles. Further, along with cars and motorcycles, Honda of America Manufacturing, the primary North American production arm of the Japanese parent company, makes all-terrain vehicles and automobile and motorcycle engines and components.
But Honda and the American subsidiary have not only wielded enormous impact on U.S. consumer tastes; they have revolutionized the domestic automobile industry through its focus on increased efficiency and continuous improvement.
Lean and Flexible
An innovative organization, Honda of America Manufacturing has pioneered production concepts that are changing the way our country builds cars. “We introduced many new manufacturing methods into the U.S. auto industry, which many of our competitors are starting to emulate,” says Edward Miller, senior manager of public relations for Honda of America Manufacturing.
These methods include just-in-time parts delivery and rolling model changes that allow Honda to begin producing new vehicle models even as old model production is winding down. “Rolling-model change is perhaps our biggest innovation,” says Miller. “We first accomplished it in 1985, for our 1986 model Accord, building the newer model on the same lines we used for the 1985 model.”
As a result, Honda of America didn’t have to stop the production line, shut a plant down as it prepared for new production, or lay off any employees during transition. “Typically, U.S. manufacturers closed down plants as they were bringing in a new car model. Many still operate that way,” says Miller. “But, as we’ve always operated in lean fashion, we integrated new and old vehicle production. We’ve even built two model years on the same production line, as we recently did with our ’07 and ’08 Accords.”
Thanks to this lean approach, Honda of America has never experienced a layoff in its 29-year history. “That’s remarkable, when you consider the cyclical nature of the automobile industry,”
In recent years, Honda of America has enhanced this capability by implementing an even more flexible manufacturing system that standardizes production capabilities throughout most of its plants. This new system makes the shift within a plant to new model production much less complex and more cost effective, thus increasing the company’s speed and efficiency in introducing new models.
Miller says Honda developed the system in response to increasing model proliferation. “Typically, American companies would build new plants around a new model. But we decided to set up existing plants so that they could switch from model to model.”
The key to building multiple models in the same plant, he says, is managing the automation. “U.S. plants tend to be the most automated in the world, and the automation in our competitors’ plants were geared to only one model, specifically in their welding shop, where various stamped parts are robotically welded together. We didn’t feel that was a good business model. If the car sales decrease, the plant closes down.”
Conversely, Honda of America adapted its shops for reteaching instead of retooling, an approach that enabled its robotics technology to weld multiple body styles. “That way, we can build trucks and cars on the same assembly line using the same equipment,” reveals Miller. “For example, at our Marysville, Ohio automobile plant, which was originally built for four-door Accords only, we’re now building the Accord Sedan, Accord Coupe, the Accura RDX sport utility vehicle and the Acura TL. We can readily flex between all of those various vehicles.”
But he points out that welding is only the starting point in flexible manufacturing. “You need to not only manage the automation, but the tools, people and processes,” he says. “For instance, the people at our East Liberty, Ohio plant have to know how to build three different kinds of vehicles. They also rotate on jobs. There may be as many as eight processes a team works on, and each team member has to know every process. When you multiply that by three, it involves a great deal of training and education. But we feel that’s essential to making a profit as well as maintaining quality.”
At all of its plants, Honda of America also organizes factory flow. “That was another innovation,” says Miller. “We integrate as many operations as we can into one facility.”
The range of operations at the Marysville Motorcycle Plant – a 260,000-square-foot facility with 600 employees – includes plastic injection molding, frame assembly, testing, shipping and export, painting, engine assembly, quality assurance and steel and aluminum frame welding. Annual capacity at the plant, which began production in 1979, has reached 75,000 motorcycles and cycle engines. Current motorcycle models include the Gold Wing 1800, VTX 1800 V-Twin Cruiser and VTX 1300 V-Twin Cruiser.
Honda of America’s four other manufacturing facilities, also located in Ohio, are similarly structured for multiple operational capabilities. Operations at the Marysville Auto Plant – a 3.8 million-square-foot facility with 5,300 employees – include stamping, welding, shipping and export, quality assurance, instrument panels, plastics injection molding, painting, testing, assembly and sub-assembly, as well as stamped parts and blanks for all five Honda plants. The plant started production in 1982 and now produces 440,000 cars each year.
At Honda Transmission Manufacturing in Russells Point, a 600,000-square-foot facility with 930 employees, operations include product engineering and development, high-pressure die casting, aluminum machining, transmission assembly, transmission quality assurance, parts quality, market quality, material service, gear forging, heat treat and machining. The plant started production in 1982 as an automotive parts supplier subsidiary of Honda of America and was incorporated as Honda Transmission Manufacturing in 1997. It produces a million transmissions
each year, including automatic transmissions for Accord, Acura TL, Acura MDX, Odyssey, Civic, Pilot, Element, CR-V, and Acura RDX models.
Operations at the Anna Engine Plant include cold forging, heat treating, machining, ferrous and aluminum casting, assembly (engines, driveshafts) and engine testing. The 1.6 million-square-foot facility started production in 1985. Its 2,800 employees now produce 1.16 million engines each year. Its product line includes four-cylinder engines for Accord, Civic, Element, CR-V, and Acura RDX models; V6 engines for Accord, Acura TL, Acura MDX, Pilot, and Ridgeline models, and driveshafts, crankshafts, brake components and camshafts, and suspension components.
The East Liberty Auto Plant’s operational capabilities include stamping, welding, painting, testing, plastics injection molding, assembly and sub-assembly, quality assurance and shipping and export. The 1.9 million-square-foot facility started production in 1989. Its 2,500 employees turn out 240,000 cars and light trucks each year. Models include Civic Sedan, Civic GX (natural gas-powered), Element, and Honda CR-V.
Honda of America continues investing hundreds of millions of dollars into these facilities. Some recent investments include new welding systems and assembly areas for the flexible manufacturing system in the Marysville and East Liberty plants, a flexible new engine line at the Anna plant, the startup of engine production at the Marysville Motorcycle Plant, and a new $123-million paint facility at the Marysville Auto Plant.
Many Significant Milestones
Honda of America was established in Marysville, Ohio in 1978 and began production with a dirt bike, the CR250R. “We chose Ohio because the state had built a Transportation Research Center, which has a proving ground, and a 7.5-mile test track, to attract an automobile manufacturer,” informs Miller. “Also, the state had supporting highway and rail infrastructures and an available workforce, as well as the potential for a strong supplier base. The vehicles we first built heavily depended on imported parts.”
In the subsequent 29 years, the company established a strong, mutually beneficial relationship with the state, and it accrued a long list of significant milestones. In 1982, the company produced its first automobile, a 4-door Accord, at its Marysville Auto Plant. In 1985, when Honda of American opened its Anna Engine Plant, it produced its first engine in the United States (for the Gold Wing GL1200). That same year, the company accomplished a major milestone, both for itself and the American automobile industry: While launching the 1986 Accord, associates at the Marysville Auto Plant accomplished the first major rolling model change without a plant shutdown in the United States.
The following year, Honda announced a five-part strategy to establish a self-reliant motor vehicle company in the United States. The strategy included the opening of the East Liberty auto plant, expansion of the Anna Engine Plant, production engineering and North American research and development, a large increase in North American parts purchases, and export of U.S.-built automobiles. During the year, the first U.S.-produced Accord Sedan was exported to Taiwan. In 1988, the year that the company produced its one-millionth car in the United States, it exported America’s first car to Japan: the Accord Coupe. In 1990, the Marysville Auto Plant started producing right-hand-drive models of the Accord Coupe for export to Japan, making it the first U.S. auto plant to produce both left- and right-hand drive models on the same assembly line.
In 1997, Marysville Auto Plant introduced the 1998 model Accord, which marked the first time that Honda of America launched a vehicle in the United States without prior production
Today, the company employs more than 12,500 “associates” at its manufacturing facilities. However, Honda of America has expanded beyond its five plants. Throughout the years, it has established other companies such as Honda R&D-Ohio Center, Honda Trading, and an American Honda service parts and training center. It even has a soybean processing plant. Further the company has branched throughout North America – in Mexico, Canada and into other states. The company is currently constructing an auto plant in Indiana. “It’s a $550 million plant located in Greensburg,” informs Miller. “It will be called Honda Manufacturing of Indiana. But, like our other companies that have been set up as freestanding corporations, it will fall under the Honda of America Manufacturing banner.”
Miller adds that the plant, which will produce Honda Civics and is expected to open in the fall of 2008, will be highly integrated and automated, with operational capabilities that include plastics fabrication, welding, painting and assembly.
No doubt, the new plant will reflect why Honda of America Manufacturing developed such a strong North American presence, as it will share the unique attributes that characterize the Ohio facilities. Those attributes are both highly tangible and material (technology, manufacturing processes) as well as intangible (creativity, enthusiasm) but no less crucial.