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Coinciding with Honda’s effort to expand its manufacturing operations, the company also promoted an increase in the percentage of locally procured parts(local-content). Such an increase would enable timely manufacturing operations while contributing to the community through the creation of jobs at Honda’s American parts suppliers. Moreover, at a time when the yen was rapidly growing in strength, it had the effect of reducing fluctuations in the exchange rate by switching from the exportation of parts from Japan.
An increase in local-content, though, meant that local manufactures had to produce parts that met Honda’s specifications and stringent quality requirements. This entailed a significant amount of work. Through negotiations with American parts manufacturers, Honda worked to increase the number of associate suppliers who could promise to meet Honda’s requirements, and established parts makers in the U.S. with the help of Japanese parts makers, thereby creating a system for the supply of local parts.
BPI (Note2*) was established on a lot next to HAM in November 1981, while in May 1984, KTH (Note3*) was established. Many other parts makers were later established in the U.S., fulfilling the need for reliable, high-quality parts supplies.
Honda announced in October 1983 that it would build the Anna Engine Plant, a dedicated manufacturing facility. Then, in July 1985, the Anna Plant began producing Motorcycle engines. This plant was built with the goal of establishing an auto manufacturing base in Canada (Honda of Canada Manufacturing), with Anna assuming the role of engine provider. Therefore, concurrent with the manufacture of Honda cars in the U.S. and Canada, the production of automobile engines got under way at Anna It was September 1986.
Note: 2* BPI (Bellemar Parts Industries, Inc.), jointly financed and established by American Honda, Tokyo Sheet and Mie R&D in November 1981, manufactures exhaust pipes, brake pipes, and door sashes.
Note: 3* KTH (KTH Parts Industries, Inc.),jointly financed and established by American Honda, Kikuchi Press, Hirata Press, Takao Metals, and Hongo Manufacturing in May 1984-manufactures press parts and welding parts for automobiles. (Names are as of the company's founding.) |
