Honda of America Manufacturing CEO Hidenobu Iwata

Honda Celebrates 30 Years of Manufacturing in America ... the Honda Way

Honda of America Manufacturing CEO Hidenobu Iwata and other Honda managers offer an inside look at Honda's unique manufacturing model -- and how Honda manages its most valuable asset.

"Our company is successful only because of the involvement, expertise and passion of each associate to build the best products for our customers," declares Hidenobu Iwata, president and CEO of Honda of America Manufacturing Inc.

It's a common refrain among manufacturing managers at the automaker's operations in Marysville, Ohio, where Honda Motor Co. (IW 1000/23) in 1982 became the first Japanese transplant to produce vehicles in North America.

"If you think about how complex it is to manufacture a vehicle from start to finish, and how many things potentially could go wrong, it is incredible how through the entire process we're able to do it as well as we do on a consistent basis," says Jeff Tomko, plant manager at Honda Marysville. "And that's not luck. That's a concerted effort by the entire team to do it right and understand how we need to continue to improve."

Indeed, Honda's approach to making vehicles -- and its approach to managing its people -- isn't a product of luck.

The Honda Way, Iwata emphasizes, is built on Honda's core principles: respect for the individual, and "the three joys" (the joys of buying, selling and creating Honda's products, respectively).

Honda of America Manufacturing CEO Hidenobu Iwata
Hide Iwata (left), president and CEO of Honda of American Manufacturing, talks with workers at the Marysville Auto Plant. At Honda, associates of all levels "come together as equals" to solve problems, Iwata says.

While such lofty, almost fanciful concepts seem like the stuff of mission statements and banners collecting dust in dark corners of factory rafters, a visit to Honda's operations in central Ohio reveals just how embedded they are in the automaker's manufacturing process.

It's evident as soon as you walk in the front door of the Marysville Auto Plant, where all 4,400 associates wear white uniforms -- just as they do at Honda's other facilities around the world.

That applies to everyone, emphasizes Ron Lietzke, assistant manager of media relations and corporate affairs for Honda of America Manufacturing, "whether you're the president, or in support like I am, or in the factory -- on the line or not on the line."

The white uniform, Lietzke explains, is a means of leveling the playing field, so to speak, in the spirit of continuous improvement.

"When there is a production problem, or an initiative to implement a new production method, many teams come together to work on the project as equals," Iwata adds.

They come together on the factory floor, and in other settings such as Y-gaya meetings, which are designed to encourage participants to voice their opinions regardless of rank or position.

John Spoltman, chief engineer and plant manager at Honda's Anna Engine Plant -- about 45 miles west of Marysville -- says he holds almost-weekly Y-gaya meetings to address important questions, issues and concerns.

Participants are instructed to leave their titles at the door.

"And you just discuss and work through an issue, and no one leads or tries to steer the meeting in one direction because of their title," Spoltman says. "So it's a free-thinking discussion."

In his interactions with other associates, Spoltman emphasizes that "everybody has the same and equal voice."

"There are no assigned parking spots and no individual offices," Spoltman says. "Everyone eats in the same cafeteria. There's no assigned seating anywhere."

Respect for the Individual

Respect for the individual was espoused by company founder Soichiro Honda, who believed that an egalitarian culture is a problem-solving culture.

More than 20 years after Mr. Honda's death, the philosophy plays a fundamental role in Honda's global business model, in which each region -- North America is one of six for the company -- has the autonomy to develop and manufacture products for its own region, Lietzke explains.

"Each plant has responsibility to manage its own business," Lietzke says. "You have to do it within the parameters of achieving certain quality levels and so forth, and having some shared processes [to drive economies of scale].

"But Honda's approach is to rely on the associates to figure out things for themselves and to improve their workplace."

How much does Honda trust its employees? At the Marysville Auto Plant -- which makes all of the Accord sedans and coupes sold in the United States -- the assembly line runs on one conveyor system.

"Whereas a lot of plants are set up where they have a series of conveyors and buffer zones, so if there's a line stop, they can absorb it," says Rob May, associate chief engineer at the Marysville plant. "But not on this line. It's one continuous chain from start to finish."

Tim Reisinger, senior staff engineer and assembly department manager for the Marysville Auto Plant, adds: "Our intensity level has to be very high."

"And there has to be a lot of teamwork, because anybody on that assembly line can cause it to shut down," Reisinger says. "Any kind of an issue an associate has, we react to it very quickly."

Associates Are the Experts

Iwata, who oversees more than 10,000 associates at three Honda plants in Ohio as well as Honda's manufacturing and engineering functions in North America, emphasizes that Honda's production workers "are the experts at the manufacturing process."

The new-model-changeover process is a prime example.

"When we retool for a new model, we pull process-level people offline and they basically lay out the process [flows and standards]," May explains. "And then as we run trials, they evaluate the process to make sure that it's as ergonomically sound as it can be, and it has all of the quality features in place."

Getting production workers involved in the development and tooling phases, May says, "has made our products much easier to manufacture."

"We end up with vehicles that are higher quality, and there's less stress on the associate physically," May adds.

No-Layoff Policy

The Great Recession was a huge source of stress on the U.S. auto industry, not to mention the hundreds of thousands of autoworkers who were downsized.

Honda, however, stuck to its no-layoff policy. To this day, Honda maintains that it has never had any layoffs in North America -- dating back to 1959, when it opened its first U.S. office.

During periods of downtime, some Honda employees reported to work and participated in continuous-improvement projects, while others took advantage of Honda's no-pay/no-penalty policy, which allows them to stay home without pay and without any damage to their attendance record.

When last year's natural disasters in Japan and Thailand disrupted the flow of parts to Honda facilities, the Marysville plant used the idle time to repair equipment and train workers, "knowing that when we do go back up, we're going to go back up fairly quickly," Tomko says.

Plant management also used the downtime of the past few years as an opportunity to improve communication with employees.

"We communicate a lot at Honda," Iwata says, "so that our associates understand our business condition."

In the wake of the Lehman Brothers bankruptcy and the ensuing financial crisis in late 2008, Honda -- like most other automakers -- faced mounting inventories of vehicles.

"So we educated our team about what inventories mean, and what a desired amount of inventory is -- which is 45 to 60 days by vehicle out in the market," Tomko says. "And we were running, in some cases, 200-plus days when nobody was buying cars."

Such information has helped associates "see that linkage of how important their daily job is to the big picture," Tomko adds.

"As a result of this common understanding," Iwata says, "they know that if they can improve our operations, their plant is more competitive, and as a result their jobs are more secure."


 

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