Jeffrey Rothfeder - Driving Honda: Inside the Worlds Most Innovative Car Company

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First published by Portfolio / Penguin, a member of Penguin Group (USA) LLC, 2014

Copyright 2014 by Jeffrey Rothfeder

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Photographs provided courtesy of American Honda Motor Co., Inc.

ISBN 978-1-101-60141-9

To all the men and women in the auto industry who believe that
their jobs are to make individuals more mobile, economies stronger,
machines more innovative, societies more equal, and manufacturing more beneficialwhile protecting the environment.

Contents

The Honda Difference

S ome of the people in attendance observed offhandedly that Soichiro Honda must have been spinning in his graveor at least letting loose with one of his well-crafted profane tirades.

It was April 2000 when a ground breaking was held for a factory on a 1,300-acre site in Lincoln, an eastern Alabama town of fewer than 4,500 people at the time. A year earlier, Honda Motor Company had announced that it would construct its inaugural southern U.S. plant in this tiny hamlet. Because Honda had already made history in 1982 as the first Japanese carmaker in the United States by opening a manufacturing facility in Marysville, Ohio, the news that it was expanding into Alabama captured headlines around the world.

And raised its share of questions. For one thing, what and where was Lincoln? Other automakers that had already set up shop in southern citiesamong them Mercedes, Toyota, Nissan, and Hyundaichose large towns like Smyrna, Tennessee; and in Alabama, Huntsville, Montgomery, and Tuscaloosa. The companies wanted to be in cosmopolitan areas where the pool of potential workers who had experience with new manufacturing technologies and skill sets was sufficiently large. Moreover, they liked being able to offer visiting executives access to high-quality restaurants and hotels.

Honda, on the other hand, picked Lincoln precisely because it offered what the company wanted most: anonymity and no big-city spotlights or distractions. Indeed, during the search process for a property in Alabama, Honda executives rejected Birmingham, the first option presented to them, saying it was too big and crowded and, well, messy. And they told the states industrial development officials that they wanted a site at which they could work unobserved and inconspicuously.

By those criteria, Lincoln was perfect. Before Honda arrived it was a sleepy flatland, left behind years earlier by farmers and defense factories, barely a pit stop on eastwest I-20 between Birmingham and Atlanta. Even now, with a world-class automobile factory in its midst, Lincoln is easy to pass by without noticing; it has a few fast-food places to get a biteWaffle House, Taco Bell, and Burger Kingand a couple of franchise motels, like Days Inn and Econo Lodge. But no signs trumpet the Honda factory on the highway or anywhere in town.

Considering the depth of Hondas reticencea single-minded self-preoccupation that manifests in the automakers almost religious regard for internal innovation and individualism and a concomitant ineptness about promoting its accomplishmentsthe public ground breaking at Lincoln for Hondas new 1.7-million-square-foot plant was bound to be perilous. At least the weather cooperated; temperatures reached near eighty that day and the sky was a milky blue. A crowd of a few hundred town residents and invited guests were on hand to watch.

They heard short speeches welcoming Honda from Governor Don Siegelman, three-decade Lincoln mayor Carroll Lew Watson, and local congressman Bob Riley, as well as convocations given by the ministers of the areas primary black and white churches and gospel songs sung by a choir that combined the best talent from the two. The speakers mainly touted the jobs, tax receipts, influx of supplier factories, and population growthall of it adding up to millions and ultimately billions of dollars in economic gains that would be drawn into the area by what would be built on this one unlikely spot of land. As Mayor Watson said later, with an impish grin and a syrupy drawl, It was as if we won the lottery; in our wildest dreams, no one ever expected Lincoln to be in newspapers as far away as California or Tokyo. (That was the same conversation in which he pointedly took pains to erase any misconceptions I had about the origin of his towns name: virtually all southern cities named Lincoln, he said, are honoring Benjamin, the aide-de-camp to George Washington who accepted British general Charles Cornwalliss surrender at Yorktown, and not Abraham.)

Honda was represented by its leading global executive, CEO Hiroyuki Yoshino, and lesser officials from Honda of America and the Lincoln plant brain trust. Like every CEO in Hondas history, Yoshino rose through the ranks of engineering and research and developmentan unspoken but unchallenged prerequisite for those following in the footsteps of Soichiro Honda, who was among Japans most creative engineers when he founded the company. Other automakers, like other outfits in any industry, tend to fill top jobs with MBAs whose expertise lies in marketing, sales, or finance.

Having engineers in charge of the business fits Hondas personality perfectlyparticularly, the companys bias toward an indispensable aspect of the engineers craft. Namely, the necessity to tear apart design, development, strategic, or manufacturing decisions by trying out alternate solutions arrived at with the same analytical probing and intellectual fervor that produced the original option. Criticizing and rejecting ideas and knowledge deemed to be trueinverting conventional wisdomis more valuable at Honda than repeated success using the same concepts. No one will blame you for making a mistake if you tried something new; in fact you may be promoted for that, said Chuck Ernst, who conceived and oversaw the building of the Honda factory in Lincoln, an unconventional facility that resembled and performed like no other auto plant in the world when it was constructed. Before that assignment, Ernst had never built a factory from scratch. However, you could fall out of favor if youre afraid to stray from what worked beforeno matter how well it worked.

Or, as Satoshi Okubo, one of Yoshinos predecessors in the CEOs office, put it: At Honda, its sink or swim. They dont teach you step-by-step; they just throw you into the pool and let you figure it out on your own. If you dont know how to swim at first, you need to be aggressive to survive. We are to try out whatever we think is necessary to take ourselves to the next level.

The tradition of engineers at the helm has also suffused Hondas culture with the concept of sangen shugi, which some people translate as the three realities. In Hondas interpretation, sangen shugi means see it with your own eyes, go to the spot before making a decision. In other words, find out, say, what the customer wants or how a part should be designed so it can be assembled efficiently on the factory floor by asking the people who can show younot just tell youthe answers face-to-face.