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| Soichiro Honda, his wife Sachi, and Kiyoshi Kawashima are greeted by Ohio Governor James Rhodes, second from right, upon their arrival at Columbus Airport to attend the ground-breaking ceremony for a new motorcycle plant. When an American reporter asked Mr. Honda why he had chosen Ohio, he answered, out of consideration for the many other states that had attempted to lure the company, “God led us to Ohio”. |
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The new corporation, Honda of America Manufacturing (HAM), was established in February 1978 for the purpose of producing motorcycles. The operational setup was based on the idea that the profits American customers provide Honda should be reinvested in America, rather than taken back to Japan. This would allow the company to expand its activities internationally, while becoming more thoroughly engrained in the American cultural fabric. Therefore, 80 percent of the initial capital was financed by American Honda, while the remaining 20 percent was financed by Honda Motor of Japan. As of the late 1990s, American Honda’s investment in HAM had reached about 97.6 percent.
The announcement to build a motorcycle plant brought about full-scale preparations both in Japan and the U.S., in order to build the plant and establish an infrastructure. HAM President Kazuo Nakagawa, who was to direct U.S. manufacturing operations, led the others in establishing a context for corporate activity.
The manufacture of motorcycles in the U.S. was to require nearly twice the funding and labor force used in Japan. Accordingly, discussions turned toward the question of what should be done to manage profitable U.S. operations, considering the limited profit margin inherent in motorcycle production. The conclusion drawn by Nakagawa and his colleagues was that Honda’s top priority in corporate activity was to provide high-quality products that would ensure the satisfaction of Honda customers.
To start activities in Ohio and take root in the local community, Honda officials decided it was necessary to provide an understanding of Honda throughout the local community, which they would achieve by clearly stating the company’s goals and strategy to begin operations. Moreover, in hiring Americans, despite the many cultural differences between Japan and America was important that Honda reveal its objectives in order to win the understanding and full cooperation of every new associate. To that end, Honda needed to organize its own thoughts concerning such hirings.
Considerable debate ensued, after which it was decided that no HAM employee would be described via the term “worker” or other such words as commonly used in the U.S. Instead, they were to be called “associates,” meaning members of a team working on behalf of a common goal. Additionally, Honda had to settle basic issues such as wage structure and job rotation. In America, wages were generally paid according to the type of job one held, but this was not to be the case at HAM. For any job position, the job description included responsibility for product quality. The names of job positions and supervisors were newly established to encourage associates to gain a sense of pride in their work, and thereby function as a team. At the plant, a flat wage rate was adopted based on the job-rotation system.
Honda first hired American managers who would oversee plant operations. Then, after HAM’s corporate concept had been thoroughly explained to them, the company would hire general associates for engagement in motorcycle production.
Despite not having advertised its job openings in the area newspapers, the applicants came in droves --more than 3,000 in all. “The unemployment rate was definitely high at the time,” recalled Nakagawa, “but just hearing the name Honda prompted a great many people to apply for jobs. It really dawned on me then that the good image Honda had built through its products and sales was taking root in America.”
HAM’s Executive Vice-President Shigeyoshi Yoshida and Manager of General Affairs Kunio Iwamoto led the hiring operation, explaining Honda’s goals for U.S. manufacturing, operation policy, philosophy, and work regulations to each applicant. Hiring was conducted under the strict policy that all members of the selection committee had to agree on personnel selections. As a result, only fifty people were hired, none of whom had ever been involved in the manufacturing of motorcycles. To Honda, it was more important that there was a passion for work rather than direct experience with motorcycle construction. It was passion, they believed, that would lead to a more rapid assimilation of Honda’s philosophy and operational outlook.
“Sometimes we’d find resistance to certain ideas,” Iwamoto recalled, “such as when associates would say, ‘Don’t make us wear these white work clothes. It’s unheard of in America to have all employees wear white. ’ But when we explained to them that white workclothes were designed with hidden buttons to keep them from scratching the products, and that white clothes would call attention to stains, helping promote cleanliness (when engaged in manufacturing activities), most of them understood and accepted it.”
Furthermore, HAM followed Honda’s basic philosophy of not using a preferential management system, which was common at American manufacturing plants. Reflecting this approach, the cafeteria was designed for everyone to eat together at once. Parking spaces were provided on a first-come, first-served basis. Thus, HAM came up with its own system of associate benefits and welfare. In 1984, Scott Whitlock and Susan Insley, attorneys from a local law firm, joined HAM in the areas of administration and public and community relations and became instrumental in establishing the corporate system, and teaching and implementing Honda philosophy among the associates at HAM. Later Whitlock moved to auto operations and was promoted to executive vice president and Insley to vice president and general manager of the Anna Engine Plant. In 1995, both of them resigned and returned to private practice. |
