News Column

Honda's Ohio Plant Changed Competitive Landscape in America

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Thirty years ago, the first Accord rolled off the line at Honda's Marysville, Ohio, plant, the first car a Japanese automaker assembled in the U.S., changing the competitive landscape of American automaking forever.

From an underdog carmaker known in Japan as a cadre of engine geeks, Honda established a trust with young American consumers not unlike the way today's Millennial generation flocks to Apple stores. "They were seen as dirty-fingernailed motorcycle mechanics and got no respect in Japan," said Dave Cole, chairman emeritus of the Center for Automotive Research. "So they decided to grow elsewhere to become a strong international company."

Since those early industrial seedlings nurtured in what used to be Ohio cornfields, Honda's North American manufacturing network now spans seven auto plants in the U.S., Canada and Mexico with more under construction, in addition to its motorcycle and power equipment operations.

Honda has invested $12.3 billion in the U.S. -- $8 billion in Ohio -- employs more than 26,000 Americans and has never laid off a worker. Workers were retained and paid for months when Ohio plants cut production following the tsunami in Japan.

The original silver-gray 1983 Accord that rolled off the line Nov. 1, 1982, with a blue and white Ohio license plate "USA 001" is on display at the Henry Ford museum in Dearborn.

Though its world headquarters remains in Japan, Honda makes and sells more cars in North America than in any other continent. The seven plants can produce 1.63 million vehicles a year now and will boost annual capacity to 1.92 million vehicles when a new$800-million plant in Celaya, Mexico, starts production in 2014.

"It has had the most profound effect on the industry," said Michael Robinet, managing director of IHS Automotive Consulting in Northville. It wasn't just the introduction of Japanese culture, but philosophies and practices that helped establish new benchmarks for engineering, manufacturing and quality.

The competition made everyone's cars better.

"Honda showed a Japanese company could go into the American heartland and establish a non-union facility with unique and foreign work practices and suppliers and be successful and continue to expand over a quarter century," Robinet said.

Amid tremendous skepticism, "they showed American workers could build vehicles as well as other countries," he said. Workers were recruited primarily from rural communities, where many applicants tended to their farms before or after clocking out from the factory.

Honda will invest another $2 billion by 2014 in the U.S., Canada and Mexico and the roughly 900 engineers at Honda R&D Americas in Ohio are charged with developing global vehicles such as the next-generation Civic for 2016 and a new NSX sports car.

But the company's resolution to do everything itself when others outsource and form partnerships has raised questions about whether the strategy will continue to be a winning one.

Recently industry observers have attacked Honda's styling, which has never been particularly daring, as too bland. The new Civic is getting a hasty redesign.

Honda's three-decade journey began with former Ohio Gov. James Rhodes and Honda founder Soichiro Honda. Rhodes convinced Honda-san to start making motorcycles in Marysville in 1979. That led to a $3.9-billion investment and the car assembly plant that launched three years later.

Honda was fifth in automobile production in Japan and many auto executives in Japan thought Honda would stumble in America. But it established a beachhead that grew to include suppliers and engine, transmission and car plants in Ohio, Indiana, Alabama and Canada.

Jeff LaRoche, a 29-year veteran at Marysville, remembers pre-shift calisthenics and a lot more Japanese colleagues.

"We came in thinking we had a lot to prove. 'Could a bunch of farmers do it and prove we were as good as the Big Three, who had second and third generations of workers?' " LaRoche said.

They exercised to the theme of the "Magnum P.I." TV series.

"It looked pretty cool, like an army ready to build cars," LaRoche said.

The automaking aerobics are long gone and there are few Japanese colleagues today, but the melding of cultures remains.

"We view this as our company," said Rob Lee, a welding manager at Marysville with 29 years' experience. "We feel like we're separate. We're Americans, but there is a sense of pride being Honda."

John Spoltman, manager of the Anna Engine Plant, said the population of Marysville has more than doubled to 22,000 since 1982.

"We didn't want to overwhelm the area," Spoltman said. "We took pains to change truck routes out of courtesy to neighbors, who would have had headlights in their windows at all hours."

Nearby Highway 33 has gone from a two-lane road to what locals call the "Hondabahn."

"We don't look at whether we are a Japanese or American company," said Marysville plant manager Jeff Tomko. "The combination of Japanese culture, U.S. aggressive style, rural manufacturing and a hard work ethic has made it a success."

Honda was able to launch new models seamlessly back when Big Three plants had to be idled for months to retool.

"The Japanese couldn't build a plant for every model like GM. They had to build it all under one roof," Cole said.

The quick changeovers took stress off dealers who could sell down the outgoing models without deep discounts, and they received new models in quantities that allowed the sticker price to be close to the selling price.

"It was a game changer," said Tomko. "Folks wondered how we could do it and how we could do multiple models on one line. But in Japan, the mind-set is small is smart."

Employees grew with the plant.

Lee was 22 when he left a machine shop job in 1983 for Honda and an extra 15 cents an hour.

"The rumor was it was a good place to work. I was scared to death. I had never been exposed to an assembly line before and was worried about keeping up with the line speed." He lost almost 15 pounds and was sore the first few weeks, but he's still there 29 years later.

Monte Dyke is an engineer in the paint shop with 29 years of service.

"I was a snot-nosed kid from a local farm. It was a bit scary," Dyke said, especially the manual spot welding. "I got used to the manufacturing flow and routine and gained confidence. I was proud of what we did."

After 30 years, Marysville started building the ninth-generation 2013 Accord on Aug. 20, with new engines and transmissions from nearby factories.

The East Liberty plant makes the Honda CR-V and Acura RDX.

Marysville represents a$4-billion investment to date. About 4,800 workers make 1,760 Accords and Acura TLs a day.

Anna is Honda's largest engine plant with 2,600 workers and 80 assembly lines snaking across 2 million square feet, which insiders nicknamed "Disneyland for engineers." Within this mini industrial city, Honda workers melt scrap material in foundries and do stamping, casting, machining and engine assembly. Anna will make the engine for the new NSX due about 2015. It will be almost a hand-built engine on a separate, showcase line, Spoltman said. Working on it will be a reward for the workers who get the assignment. More details, including the location of the plant to make the NSX in Ohio, are expected to be revealed later in November.

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