The End of Detroit (14 page)

All of the features of the Odyssey combined into a package that the auto industry had never seen before. The first glimpse of it came at a Christmas party that Honda threw at the Automotive Hall of Fame in 1997. Dick Colliver, the general manager of the Honda Division, was smiling like a cat that had eaten the canary in one gulp, as he showed off the minivan to a group of Detroit journalists. “We are going to sell a ton of these,” Colliver confided, standing at the back of the crowd crawling all over the Odyssey. The proof came within months of the Odyssey’s debut in spring 1998. Odagaki, Benner, Berkman and the rest of the team had hit their target. Odyssey was an immediate success, in hot demand among Honda customers and attracting new buyers to the auto company who had heard about the suburban status symbol. Across the country, waiting lists mounted, particularly on the East Coast, where a dealer on Long Island asked for a $500 deposit just to take a test drive. Honda had hedged its bets originally with the new Odyssey, figuring that it would sell about 70,000 a year. But demand was soaring, and clearly Honda would be able to sell twice that many.

The Odyssey’s success spurred Honda into a project that it had long been considering but had not found a reason to do: a new American manufacturing plant. As part of its decision to create a new minivan for the American market, Honda decided to produce it in North America. The decision was in keeping with its practice of building vehicles in the same markets as the customers who bought them. Moreover, the bigger Odyssey would have to be built on its own assembly line. Because of its size, and because it was not based on any previous Honda underpinnings, Odyssey could not be built in the same Japanese factory where its predecessor was produced. In any case, Honda was keeping the smaller Odyssey in its lineup, so it had no need or interest in tearing apart its Japanese plant in order to build the new version. It chose to build the Odyssey on a new assembly line at its factory in Alliston, Ontario, north of Toronto, and when Odyssey proved to be so successful, it increased production at Alliston in order to get more vehicles out of the plant while it decided where the new plant should go.

Though Honda had been the first Japanese manufacturer to build factories in the United States, it had not built a plant since the one in East Liberty, Ohio, opened in 1989. Since then, Toyota had opened a truck plant in Princeton, Indiana, a move that had been central to its production of the Tundra pickup. The Princeton plant was the first of the second generation of Japanese-owned factories in the United States, and now Honda, too, was ready to expand. Ohio was eager for Honda to build the factory right there, and Honda was deluged with offers from other states as well. But it wanted to go somewhere completely new, because it had new manufacturing ideas that it wanted to try.

A lot had changed since Honda had built both the Marysville and East Liberty factories. For one thing, Honda in the 1980s was still new to the car business. It was feeling its way as an automobile manufacturer. It had never had a Dr. Ohno, and its factories looked that way. “What Honda wants to be good at is not making cars,” said author James Womack. “It’s designing and engineering cars with the feel and features that Japanese and American customers are willing to pay a premium for.”

To visit one of Honda’s factories in Japan, like the giant Suzuka plant near the famous racetrack, is to be taken aback by what Honda is able to accomplish. Suzuka’s production lines are situated on three floors of the factory: the body shop downstairs, assembly on the second floor and the paint shop up top. It’s a rabbit warren of manufacturing, stuffed in a shoe box. Nonetheless, the plant has an amazing production capacity, building more than 750,000 vehicles a year in more than half a dozen body styles, and the roads outside the plant are a constant buzz of activity, with parts deliveries coming in and finished vehicles heading out to marshaling yards. In the same way, Marysville is no showplace of factory-floor layout. It has undergone significant overhauls at least three times, including the most recent, in 2002, for the introduction of the 2003 Accord. The plant’s manufacturing engineers built entirely new assembly lines behind those that were operating, then shifted production over a weekend so that the plant could restart the following Monday without any loss of cars. It was a remarkable feat that Detroit plants wouldn’t even attempt to accomplish. Among the Big Three, it’s still acceptable to shut a factory for weeks, months or years to change over from production of one type of vehicle to another. Honda, however, simply can’t afford to lose the units, because that would mean customers would have to wait longer for their cars.

Honda’s decision to build a new factory led to a number of company firsts. It selected a site in Lincoln, Alabama, about 15 miles east of Montgomery, the first time it had ever ventured so far into the American South. The plant would be Honda’s first that was solely dedicated to the production of light trucks, starting with the Odyssey, adding the Pilot, and eventually, some auto industry analysts believe, including a pickup truck, once Honda finally decides to build one. Honda decreed that the plant would produce not only vehicles but engines, the first time that it had put both an engine plant and a car plant under the same roof, and it would have a foundry there, too, to make the blocks for the engines. (Though it isn’t unusual to have an engine plant and a car plant on the same property, as Toyota does in Georgetown, it is still a rarity in the automobile business to have one big manufacturing plant with both. One of the few factories to do so is the Saturn complex in Spring Hill, Tennessee.) Along with that, Honda decided that the plant in Lincoln would have to be up to speed far faster than it originally planned, because demand for the Odyssey was just too enormous.

That led to a timetable that itself was something of a first for the auto industry, where all manner of hiccups, from the weather to environmental permits, can knock a manufacturing plant off schedule. Even years after it opened, people in the industry are still amazed at how quickly Honda opened the Lincoln factory, particularly given all the risks that the venture involved. Honda announced the $580 million project in May 1999, with an initial completion date set for two years later. It planned to hire 4,300 workers, who would build 150,000 vehicles a year in a plant that had 1.7 million square feet. Honda broke ground for the factory in April 2000. It went into production in November 2001, six months earlier than Honda had first planned. Not only that, but before Honda even finished the plant it announced that it would expand it. By the time the expansion is complete, Honda will have invested $1 billion in the Lincoln plant, which will employ 4,300 workers, cover 2.8 million square feet and produce 300,000 vehicles a year.

The project was a breakthrough assignment for Lincoln’s plant manager, Chuck Ernst, a native of Middletown, Ohio, who had begun his manufacturing career working in the steel industry. But Ernst heard positive stories from friends in Ohio who had joined Honda, and he signed on there in 1985 when Honda began hiring staff for an engine plant it planned to build in Anna. He became the second American assigned to the plant, which Honda announced three years after it began building cars in Marysville. When Ernst arrived, Honda didn’t even have a trailer parked on the site for the factory, so Ernst and his small staff made do with offices in a house. Ernst, who looks more like a banker than an automobile industry manager, with neat graying hair and fashionable small glasses, spent time in Japan training in the ways of Honda’s manufacturing operations and learning to understand the Honda Way. “Honda’s corporate culture is made up of a lot of little things,” said Ernst.

He loved his job at the engine plant, which built engines not only for the Honda Accord and Civic but also for the Gold Wing motorcycle, Honda’s premier touring bike. On the first day of production, he remembered looking at the engines coming off the assembly line and thinking, “Will it start? Of course it will start!” He draws on his engine-building expertise every day at the Lincoln factory, which has emerged within the Honda network of factories as a collaborative effort, drawing from the company’s experiences around the world. Walk through the plant and you’ll hear a collection of accents, many from the South, of course, but others from Ohio, from Japan and from Canada. The Lincoln plant has relied heavily on its sister plant in Alliston, Ontario, for advice and a road map as it has begun producing the Odyssey. It isn’t so much the minivan’s size that sets it apart, said Ernst, as the fact that it is not a car, and the production lines here draw a number of visitors from all over Honda’s operations to see the company’s only dedicated truck plant.

Lincoln has borrowed from elsewhere in Honda in other ways. It was able to keep its investment costs low and speed up its timetable by procuring unused equipment from Honda’s factory in Swindon, England. Over came a giant machine used for machining, or polishing, engine blocks, saving the plant $600,000, while from Honda’s plant in Wako, Japan, came a big casting machine used to produce the blocks themselves. That saved another $500,000. Meanwhile, its stamping pressures, which make sheet metal parts for the Odyssey, are so productive that they are making extra parts and shipping them up to Honda’s plant in Canada.

But along with the savings, Honda is paying an attention to detail inside the Lincoln factory that is remarkable even in a company that is known for the care it takes in building automobiles. One such example is in the stamping plant, where, standing on a catwalk above the plant floor, visitors can watch big metal presses in action. They make a constant thumping sound as they hammer through layers of steel to make roofs, side panels and hoods. Larry Hughes, the stamping plant’s manager, knew nothing about this process when he joined Honda at its Alliston plant, but he is here now to train Honda’s Alabama workers in the intricacies of making sheet metal parts.

Half a dozen workers, wearing protective goggles and cotton work gloves, stand in anticipation next to a conveyor line at the end of one of the stamping presses, waiting for roofs to be completed. When one appears in front of them, they pore over it, looking for nicks and scratches and any kind of minuscule defect that might cause a customer to complain to their dealer. Every so often, one of the roofs is taken off the conveyor line and walked over to a special inspection area. Here, one of the Honda workers rubs a stone coated with oil across the metal hood, a process that is supposed to expose any flaws within the metal surface itself. “You can pretty much see the deformities,” said Gordon Hammond of Talladega, Alabama, demonstrating how he uses the stone, much like an eraser, to see if there is anything amiss. Perhaps 10 to 15 times during an eight-hour shift, Hammond might spot something wrong, and if that happens, the inspector immediately shows the flawed hood to a supervisor. Together, they take action. “We stop the press, and go in and clean out the die [before the press is allowed to resume operations],” said Hammond.

That same care can be seen in the engine plant, whose foundry is quiet, clean and virtually odor free, in contrast to the filthy, noisy and smelly foundries that auto companies have operated since the earliest years of the industry. Soichiro Honda would have a hard time finding anyone to slap here, and he would probably be likely to be pleased by all the care that is being taken with the engine components. Months after the plant began production, the engine plant staff noticed that Alabama’s humidity was having an effect on the metal bearings and cylinder parts that were being shipped to the plant. The heat and the stickiness caused them to weep moisture. So engineers decided to store the parts in air-conditioned trailers until they were needed on the assembly line. It was a minor detail, but if an engine were to fail on an Odyssey, Honda would wind up with an unhappy customer and lose a chance for positive word of mouth. Appearances count here, too, even in places owners might not think to look. After each engine is finished, it gets a protective wax coating that takes 45 minutes to cure. It provides an attractive sheen and also protects the engine from wear and tear.

John Penrose, the manager of the plant’s paint shop, is even more concerned about the way vehicles look when they leave this plant, because the Odyssey’s finish is one of a customer’s top priorities. Like the foundry, the place is scrupulously clean. Nearby, a line of workers is inspecting vehicle bodies under bright white lights that, combined with their gleaming uniforms, seem to cast a halo around the minivans. Penrose, a veteran of 20 years at Honda, said he has not yet gotten bored at the company in a range of assignments, from the R&D center at Marysville to three years spent in Japan. “Honda’s approach is that they give everyone a chance,” said Penrose, who is stocky with blond hair and looks like he’d be right at home running the rowdiest fraternity on campus. “If you take half an interest, they’ll let you try.” But he points out that Honda’s preciseness is not for everyone, and he admits that over the years he’s been the subject of calls from headhunters many times. “I know a lot of people who didn’t like it. It’s not an easy company to work for,” Penrose said. Still, after 20 years of the Honda Way, “I’d be a fool to go anywhere else. What I give them, I get back in respect.”

Back on the plant floor, the day’s production of Odysseys is winding through the assembly line, passing before the eyes of two tour groups—one of senior citizens, the other of high school students—who have come to see the Lincoln plant. The seniors look amazed by the robots and the rest of the technology, while the students are trying hard to be blasé about the field trip, but it’s clear that this is a sight that has all of them transfixed. When production is complete, the minivans go through a series of tests, checking their engines, their gauges and tires, before being taken out on a short test drive. Then it is off to a marshaling yard, which sits in the distance beyond the construction site for the new plant. The yard is filled with Odysseys as far as the eye can see, and as fast as they arrive from the factory’s back door, they are lined up in order to be driven onto delivery trucks. Every one of them has a customer waiting for it.