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Honda Plant Turns on a Dime

September 13, 2000|TERRIL YUE JONES | TIMES STAFF WRITER

EAST LIBERTY, Ohio — The newly redesigned 2001 Civic that Honda is unveiling today doesn't look like much of a departure from the current generation of America's best-selling small car.

Yes, it's slightly more compact on the outside and roomier on the inside, and its doors and body panels fit together more snugly. But Honda Motor Co. says the real difference is a new manufacturing process being implemented at its factories back home in Japan as well as in the United States, Canada and Britain.

This process combines robot automation, new factory layout and subassembly, or "modular," production alongside the main assembly line. The manufacturing system is designed to heighten flexibility so that production of other, similar-size models besides the Civic can be brought in and out of the factory quickly, depending on demand. It is expected to generate companywide cost savings of $1 billion a year by 2004.

The system positions Honda to "more quickly respond to the desires of customers with the models and vehicles they want to buy--and to do so on a timely basis, without significant cost penalties," said Tom Shoupe, manager at the East Liberty plant northwest of Columbus.

It will also allow Honda to react to fundamental market changes, such as a recession or prolonged high gasoline prices, which could push consumers to buy more fuel-efficient cars.

"It means you get flexibility," said Jim Hall, an analyst with the AutoPacific consultancy in Detroit. "If one of your cars goes soft and another one's hot, you have the latitude to adjust for it."

Honda could someday add production to East Liberty of Accords or an all-new vehicle based on the Accord or Civic platform, such as the Civic-based CR-V or another small sport-utility vehicle, if demand warranted.

By standardizing production globally, Honda is also able to introduce the 2001 Civic to a dozen plants around the world within nine months--virtually simultaneously in automotive terms. That offers the advantage of not forcing customers to buy an older generation of car when they know a new version is on sale in other countries. And it provides an enormous incentive to suppliers to cut global deals favorable to Honda.

The Civic is a key to Honda's strategy in this age of keen competition and thin margins for compact cars. It is the company's best-selling car in the world and has been the top-selling small car in the U.S. since 1995, symbolizing Honda's success in this market, where it trails only archrival Toyota Motor Corp. among the Japanese auto makers.

Although the Ford Focus claims it is the world's best-selling car so far this year, it is a strong second to the Civic in the U.S., where Honda aims to sell 330,000 Civics this year, up from 318,000 last year.

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The East Liberty plant is an impressive sight. It is clean and well-lighted, and Civics take shape along an assembly line that curves up and down the length of the factory five times. Pilotless carts automatically haul parts and carry trash past workers in white uniforms.

The welding area has been significantly updated with more than 20 robots that snake around metal frames to give cars their shape and start them down the assembly line. Honda has also expanded some subassembly, producing certain modules such as instrument panels alongside the main assembly line.

"There's absolutely nothing not to be impressed about," said Jay Baron, a manufacturing specialist at the University of Michigan's Transportation Research Institute.

Honda has significantly decreased the number of tooling stations known as jigs that assemble parts, usually by welding, and that can't easily be adapted to different car models, said Baron.

"To compensate, they're using highly automated, high-accuracy robots, so when they want to put in a new model, they just have to run some software to reprogram them," he said.

Honda is already renowned for introducing models on a shorter cycle than its Western competitors.

American and European auto makers generally redesign their vehicles after five or more years. The Civic--except for the first version, which lasted seven years after it was introduced to the U.S. in 1973--has usually been redesigned every four years since then.

Still, not everyone is impressed.

"The notion of trying to shorten the line, and modularizing the product, is not a bad one. It's what Henry Ford did in Highland Park in 1914," said James Womack, head of the Lean Enterprise Institute in Massachusetts, referring to the Detroit-area plant where the founder of Ford Motor Co. installed the first significant assembly lines in American industry.

"It's interesting that they now say they're going to be the kings of flexibility. What does that really mean? The payoff for the customer has either got to be that it's going to take a lot of cost out, or they're going to shorten the lead time for customer orders," said Womack, chief author of "The Machine That Changed the World," a landmark 1990 book on Japanese auto-manufacturing techniques.

"I'm skeptical that simply having a body shop that makes Accords in the morning and Civics in the afternoon is going to get translated into one or the other of those two dimensions."

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Honda acknowledges that its new manufacturing system is not intended to reduce prices for consumers or shorten order-to-delivery time.

But the system cuts investment to produce the new Civic by 40%--the auto maker won't give figures--and that means higher profitability. Increased automation also means Honda--whose assembly plants, like those of other Japanese auto makers in this country, are not unionized--will eventually be able to reduce staffing at plants that use the new system.

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Terril Yue Jones is The Times' Detroit bureau chief. He can be reached at t.jones@latimes.com.

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