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| The Odyssey’s line-off ceremony held on October 3, 1994, at Saitama Factory’s Sayama Plant, was attended by representatives from business partners and dealers, along with numerous associates. There was an atmosphere of celebration surrounding the launch of Honda’s new minivan. |
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Odagaki faxed a memo to Suzuka Factory, Saitama Factory’s Sayama Plant, and Honda of America Manufacturing (HAM). “This plan is not an official project,” stated the memo. “However, we believe it’s a car that Honda should develop. Unfortunately, our study has found that the construction of a new plant would increase the required investment, making the project impractical in terms of costs. Therefore, we have designed a feasible package that maintains the necessary interior space for passengers, yet that can be manufactured through minimal changes to an existing production line. Please consider the possibility of manufacturing the car at your Factory.” Subsequently, HAM and the Sayama Plant replied that they might be able to accommodate the request.
“The collapse of Japan’s bubble economy had reduced the overall market for sedans,” recalled Hiroshi Sekine, who was EPL for the Odyssey introduction project at Sayama Plant. “By contrast, the RV(recreational vehicle) market was growing. RV was a category in which Honda didn’t have an entry. At the same time, we were aware of the obvious lack of capacity that Saitama Factory would face. It was anticipated that Sayama Plant’s line Number 1 would become idle within two or three years.”
Hiroyuki Shimojima, then managing director and Saitama Factory’s general manager, had decided that the factory should introduce a new car in order to revitalize the plant and its employees.
“We on the manufacturing side had to do several things first,” Sekine said. “We had to maximize our factory’s unique characteristics as a passenger-car plant, achieve stable quality, minimize the investment, and employ existing equipment effectively. However, we couldn’t meet those requirements using the design provided by the R&D Center. So, we worked with their staff in order to change the car.”
The body of the Odyssey minivan was larger and heavier than existing models produced by the factory. Therefore, the first step was to conduct a thorough procedural analysis and identify what needed to be changed.
Each of those items was then verified by Sekine, who walked through the line and checked every point. This resulted in a substantially reduced investment required to build the vehicle.
Following the preparation of his investment forecast, Sekine visited the Production Planning Office and presented it to the Investment Evaluation Committee. There, he was given a discouraging comment by the head of the Planning Office, who said, “Sekine, why don’t you propose canceling the development? I’m telling you, this car will not sell.” However, after the committee’s evaluation an approval was given by Senior Managing Director Nobuyuki Otsuka.
“Nobody had given me an answer as to whether the car was to be manufactured at Sayama Plant or at HAM,” said Sekine, recalling his conversation with Otsuka. “So, in order for us to minimize any damage suffered in the event that HAM was chosen, I will check the progress every two months and identify the minimum investment requirements. Then I’d come back to him with each investment plan and obtain his approval.”
“What a dirty tactic,” replied Otsuka, rather jokingly. “If the investment is too big, I can tell you to reduce it. But if you bring me an investment plan for a small amount every two months, how can I say no?” Otsuka also gave Sekine a detailed evaluation of the plan.
It was Sekine’s goal to bring the Odyssey project to Sayama Plant, no matter what the difficulties might be.
The intra-company competition between Sayama and HAM continued until the final decision had at last been made. The competition was so fierce, in fact, that if Sayama Plant had refused the project it would have been taken to the U.S. immediately.
Another factor surrounding the first generation Odyssey project involved the collapse of Japan’s bubble economy, rising yen, and recessionary trend—all of which made it difficult to discern the true state of the Japanese business environment. Further complicating matters, the minivan would face 25-percent tariffs if it were imported to the U.S. |
