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| The CR250R, first of Honda’s motorcycles to be produced at HAM, rolled off the production line on September 10, 1979. Shown aboard the bike is Kazuo Nakagawa, HAM’s inaugural president. |
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Formed in December 1975 to determine the feasibility of U.S. automobile manufacturing, the group now began to focus on the following two requirements:
1) The cost of manufacturing automobiles must be plausible when compared to the price of Japanese-made cars sold in the U.S.
2) Quality must be secured on a level equal to those completed in Japan.
In May 1976, the Joint Meeting of Senior Managing Directors endorsed the commissioning of an American consulting firm to research automobile production in the U.S. Requirements for the plant location study were presented, calling for a place in which 100,000 Civics and Accords could be produced annually and transported via truck lines or railroads.
A midterm report was presented by a consulting firm in October 1976. Several cities in Ohio and Tennessee were named as specific candidates, based on their intrinsic economies. The final report came at the end of the year, when many candidate locations centering around Columbus, Ohio, were proposed. However, it would not be easy to find a site that answered all of Honda’s requirements.
Then, in February 1977, the company asked a university research institute to examine the quality of the labor force, for the purpose of verifying previous data. According to that report, it was confirmed that the region from Ohio to Kentucky had a low rate of job turnover, along with highly motivated workers. However, no specific location was identified as an optimal candidate.
The requirements for the location of a plant were that it be on a level lot covering between 100 and 200 acres (approximately two million square meters), that it offer access to expressways and railroads, and that a high-quality labor force be available.
The results of the location study and research concerning labor quality brought Ohio further into focus, at which time the project was enhanced with additional personnel. Meanwhile Suzuki and others began a quest for new information, touring more than fifty sites throughout the state. That search, however, went without a satisfactory result.
Therefore, finally it was decided that a meeting with the governor of Ohio was the only way to pull out of the situation. Suzuki requested an appointment in July 1977, after a considerable period of deliberation.
“I visited the governor, determined to give up on Ohio,” Suzuki recalled, “if none of the locations the state had recommended could prove sufficient.”
Governor James Rhodes, upon hearing that Honda had focused on his state as the final candidate for plant construction, welcomed the project members with open arms. New locations were immediately cited as candidates, and a tour itinerary was arranged.
The following day Jim Dark, chief of Ohio’s Economic Development Bureau, took the three project members--Suzuki, Kazuo Nakagawa (managing director in charge of overseas production), and Shigeyoshi Yoshida (president of HIT (Note 1*)—on a tour of industrial suburbs in a state-owned airplane. Following the tour, they stopped by the state-run Transportation Research Center (TRC).
The center was a large proving ground boasting a number of different test facilities, among which was a 7.5 miles (12 kilo meter) oval course. It was used by makers of cars, trucks, and auto parts, as well as by government organizations and research groups. There the topic of conversation turned to employment, with people from TRC saying that many people in the area were industrious and that a large number of quality workers would be available. Indeed, Suzuki, Nakagawa, and Yoshida saw for themselves how hard the young female test riders were working at the center, they knew it would be a good idea to research the area further.
Suzuki asked, “Is there a site around here that would be appropriate for industrial use?” In response, Dark showed them a lot immediately east of the TRC. It was about 200 acres in size, and there was a main highway nearby. It even had a nearby railroad track, although it was no longer in use. Restoration of the railroad would allow the transport of completed automobiles and associated parts, and soon it was evident that this location fulfilled all the requirements for the manufacture of automobiles.
That evening, the three men reexamined some of the locations they had toured, agreeing unanimously on the lot next to TRC. The following day, they visited Governor Rhodes, telling him they wished to acquire the property.
Mr. Rhodes replied, “Then, the state will provide you the lot for free.” “Oh, no, we can’t accept that,” said Suzuki, acting as Honda’s official representative. “We would like to purchase the land at its fair market price.”
It was decided that the plant would begin on a small scale, through the production of motorcycles. Then, once the new plant had become proficient in that process, they could apply it to the production of cars.
“Although I didn’t see the location myself,” Kiyoshi Kawashima recalled, “I made my choice [to build a plant there], because it was the result of a thoroughly considered decision by my trusted colleagues.”
Honda signed an agreement with the State of Ohio in October 1977, simultaneously announcing in Japan and the U.S. that it planned to build a motorcycle plant. The total amount of investment was to be $25 million, which was then equal to approximately ¥6.5 billion. The agreement entailed the acquisition of 214 acres of land for the construction of a facility capable of producing 60,000 large motorcycles a year via a single workshift employing between 300 to 500 people. Production was to begin in 1979, two years down the road. It was also announced that when motorcycle production was well underway and requirements such as the understanding of the local community had been met, Honda intended to manufacture automobiles in a facility adjacent to the motorcycle plant.
Note: 1* HIT (Honda International Trading Corp.), financed and established by American Honda in September 1972, engages in the trading business. |
