10-Year-Old Success: Japan's US Car Plants Change Industry
THIS mid-Ohio farming community is not the place you'd expect to launch a revolution in the United States auto industry, but that's precisely what happened when the Honda Motor Company opened the first Japanese "transplant" here 10 years ago this month.
A lot has changed since the first Accord rolled off the line. The Accord itself is now the nation's bestselling car, prompting Honda to invest billions to expand the Marysville complex. And that has paved the way for a dozen other foreign-owned assembly plants - threatening the Big Three US carmakers.
"By the mid-'90s, we expect the transplants will have capacity to build over 3 million vehicles a year," says William Pochiluk of Autofacts Inc. The transplants have permitted Japanese carmakers to circumvent restrictive import quotas that were recently cut to 1.6 million passenger cars a year.
After initially demanding that the Japanese build cars where they sell them, the Big Three are worried. Overcapacity has become a big problem, especially with the North American economy in a slump. General Motors Corporation alone plans to close 21 car and component plants by 1994. The Big Three have been lobbying Congress not only to cut imports but also limit or bar the opening of further Japanese transplants.
For the moment, the Japanese have cut back on future investment plans. But Mr. Pochiluk and other analysts say that's just a temporary, politically expedient gesture.
As the economy recovers, more transplants will likely be added, and they will probably focus on truck production, the only segment of the market where the Big Three still hold the lead.
HONDA regards its Marysville operations as a virtually autonomous American carmaker - with justification. Though sales operations are headquartered in Los Angeles, this 20-square-mile factory complex in mid-Ohio is the real heart of Honda's American operations.
The company has invested $2.6 billion in Ohio. The Marysville plant can produce 360,000 Accord sedans, coupes, and wagons a year. A second plant in East Liberty can roll out 180,000 Civic sedans and coupes, while Honda makes engines and transmissions in nearby Anna. The majority of Accord and Civic components are produced in the US and company officials promise that more of the products will also be designed here. The new Civic coupe was developed primarily by American designers.
Honda of America Manufacturing Inc. alone employs 10,200 "associates." Few of them had ever worked in the auto industry, a fact that has created some controversy. Critics charge that Honda has tried to bar minority workers and those with union sympathies. The company counters that it has simply tried to hire workers with the "right attitude" and then inculcate them with Honda's unique manufacturing methods. For many associates, that means a temporary assignment to Japan. At first, that created a bit of c ulture shock, for both Americans and Japanese.
"I was the first woman that had ever been to [their] assembly department, and I was a real shock to them," remembers Pamela Hawkins. "They didn't want me to work on the line, but I did it, and they [started] treating me real well."
Few were surprised when Honda, long considered a maverick among the Japanese automakers, announced plans to build an American assembly plant. But there were more than a few skeptics both outside and inside the company.
"We [had to make] sure `Made in the U.S.A.' quality was the same as Japan quality," recalls Noboru Hashimoto, now a senior vice president in charge of Honda's US research and development unit. Honda tested the waters with a small motorcycle plant, and then, "when we had confidence," went ahead with the car plant.
Worried that American consumers wouldn't want to buy an American-made Japanese car, Honda initially downplayed the plant. Today the company highlights Marysville in advertisements designed to blunt the impact of the "Buy American" movement.