I have highlighted the info on the new Accord below....
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Rick Schostek |
07/26/2012
Good afternoon everyone. It's great to be with you. We appreciate the opportunity to tell our story today.
As you know, six months ago … our global CEO, Takanobu Ito, announced
at the North American International Auto Show in Detroit that our U.S.
R&D and manufacturing teams would take on the development and
production responsibility for the next-generation Acura NSX. It was big
news and even earned a few cheers … which was unusual for an auto show
and a nice acknowledgment.
But inside Honda … the real news had come a few months earlier. In
Fall 2011 … at a meeting of our global management on our corporate
campus in nearby Torrance, California … Mr. Ito told us that Honda was
"at a crossroads." He said it was time for our North American
operations to step up and play an even larger role within global Honda.
In addition to the responsibility for the development and production
of the NSX it was at this meeting that he asked those of us in the
manufacturing area to take on a new, bigger, leadership role in North
America … something I will explain in more detail later.
This challenge from our global CEO wasn't a reward … and it isn't
simply a result of exchange rates. We've been dealing with the ups and
downs of global economic issues since the late 1970s.
Rather, in making these decisions, Mr. Ito was expressing his
confidence in our capabilities in North America. He noted that our U.S.
plants were annually among the leaders in quality results … with our
Indiana plant earning the top IQS Platinum award for 2011. And, last
month, we followed that up with the Marysville Plant achieving the
Silver Award in North America.
Mr. Ito also reflected on the fact that Honda was approaching the
30th anniversary of auto production in America. In his view, our
associates have great experience and skills in both R&D and
production … and it was time for us to take the turn in the road toward a
new heightened level of responsibility.
In many ways this is a culmination of the investments Honda has made
over the past three decades … not only in facilities and state of the
art technology … but in our people.
The 30th anniversary of our Marysville Auto Plant in Ohio is coming
in November. And, of course, we are taking the opportunity to look back
at this history … and the people who helped make it happen. But we
really view this as an important time to look to the future … and take
bold action for the next 30 years of our operations in North America.
What's important is not a major milestone like three decades of auto
production in Ohio, but what it represents. Which is the vision Honda
showed in establishing production operations here … and the commitment
to associate involvement and teamwork to continue our original vision of
30 years ago -- achieving the highest levels of quality in America.
I came to Honda in late 1987 … just as the company was rolling out
what we called our 5-Part Strategy for North America. There are a few
of you here today who were covering the auto industry back then. So,
you might remember that this led to a second auto plant in Ohio …
expansion of U.S. R&D operations, including a new product
development center in Ohio … a major increase in local parts content …
the expansion of production engineering in America for creation of dies
and tooling … and a plan to export U.S.-built Honda autos, including
shipments to Japan, in 1988.
But one thing I remember clearly from my early days with Honda was
how the industry quickly considered our operations to be the benchmark
for auto production in North America. We opened our doors to the
leadership of factories from all of the Detroit automakers. They wanted
to tour our Marysville Plant to understand how we were building such
high quality vehicles in the U.S. … with a high level of efficiency and
flexibility.
After all, you couldn't say conventional wisdom led to our decision
to build the Accord in Ohio. One of Honda's advantages in the early
'80s was the perception that products made in Japan were of higher
quality. Many experts thought it was a risky move to let Americans
build Honda products. So, when we started building cars here in 1982,
everyone … even some of our own dealers … were concerned that this would
negatively impact Honda's reputation for building products of the
highest quality.
What Honda brought to the industry was a different approach that has
eventually touched almost every automaker and supplier. We introduced
to North America just-in-time parts delivery and rolling model changes,
for a seamless transition from old to new model production without a
production shutdown. We focused on a flexible and efficient approach to
manufacturing … removing waste … with continuous improvement … and
teamwork between Honda associates and suppliers to meet customer
expectations for quality and value.
When consumers saw that Honda's American workers could build
high-quality vehicles, eight other international companies followed us.
Additionally, the Detroit automakers improved quality and productivity
to compete. Today, the quality of almost every vehicle produced in
America has risen to the highest levels ever.
So, I think it speaks volumes that … 30 years later … the Marysville
Auto Plant is still on the cutting edge. It took home that Silver award
… in this year's IQS rankings. And this spring, after representatives
of another respected automaker toured the Marysville Plant … they told
us they consider it to be the benchmark auto plant in North America.
They were impressed with the high level of local content. They were
surprised at our focus on the skills of our associates, rather than
automation … and by the high level of engagement of our people.
Through the years we have continued to invest in new technologies and
processes to keep Marysville as a state-of-the-art plant. This includes
major investments over the past decade in all-new weld, paint, assembly
and stamping operations. In fact, about the only thing that hasn't
changed about the Marysville Auto Plant is that it still builds the
Accord … the car that started it all back in 1982. And, through it
all, we've navigated through good economic times and bad without a
single associate layoff.
This fall we will begin production in Ohio of the all-new
ninth-generation 2013 Honda Accord. As you will discover in a few short
months, this new Accord is not one-dimensional. It excels in all areas
… advancing the Accord's outstanding fun-to-drive performance, high
fuel economy and leading safety features … the same formula that has
helped to make Accord a
Car and Driver 10 Best pick for an unprecedented 26 of the last 28 years.
This new Accord is a special car befitting the 30-year milestone … a
benchmark vehicle built in a benchmark auto plant. And we are taking on
a number of challenges in the Marysville Plant to make it happen.
As one example, the current model has an instrument panel with a
total of 16 seams and is assembled from four separates pieces. For the
new Accord, we will have a seamless, one-piece panel with an integrated
airbag lid. In addition to a beautiful design, this helps achieve a
quieter cabin with better road insulation and less opportunity for
rattles or squeaks that can occur with conjoined pieces.
This is the first time the Marysville Plant will complete the entire
instrument panel assembly process in-house. It is a very challenging
project that features a number of unique processes. This includes a
very precise ultra sonic knife to score perforations into the substrate
and underside of the panel topcoat for airbag deployment … and
construction of a new seismic floor – six feet deep into the plant floor
– to eliminate vibrations that could cause variations in the
perforation. A new vibration weld machine also was added for the airbag
hinge.
The resulting soft-touch instrument panel is part of a stunning interior … that will help Accord stand out from the crowd.
This generation of Accord also will feature multiple new powertrain
technologies from our new Earth Dreams series … including an all-new
4-cylinder direct injection engine … new sporty CVT transmission … new
6-speed manual transmission … and a plug-in electric hybrid model.
Moreover, Accord's new powertrains … the new direct injection engine
and V6 engine … and the CVT and 6-speed automatic transmissions … are
being produced at our engine and transmission plants in Ohio. It's a
big responsibility … and a major challenge.
We are investing more than $120 million in the Ohio transmission
plant alone to add a new assembly line for CVT production … as well as
additional aluminum casting operations to support the new line. And in
addition to producing the new 4-cylinder and V-6 engines … the Anna
Engine Plant, which opened in 1985 ... is investing almost $100 million
tp produce high-tech pulley components for the CVT transmission
beginning next year. I won't take you through all of the details, but
these two powertrain plants have worked together for two decades … and
these investments will ensure they continue to be the bedrock of our
operations for decades to come.
I've had something of a unique opportunity to be a part of the growth
of many of these operations in America. I started my career in Ohio …
and I am back in Marysville again. But I spent four years in Alabama …
during the early days of that plant's growth. I later moved to our
plant in Greensburg, Indiana in 2008, as that plant began mass
production.
In an industry pockmarked with plant closures, Honda's story in North
America has been one of continued reinvestment in our existing
facilities to keep them on the leading edge of quality, efficiency and
flexibility … while also introducing the newest concepts for
ergonomically friendly processes for our associates.
Today – we have seven auto plants in North America with nine assembly
lines and an annual capacity of 1.63 million units. This spring, we
broke ground for a new plant in Mexico, which will build Fit-series
sub-compacts and increase our capacity to 1.92 million in 2014. This
will help increase the percentage of our sales produced in North America
from more than 85 percent last year to well above 90 percent in the
coming years.
In addition to the new plant in Mexico, we are expanding and
innovating our existing production operations in Ohio, Alabama and
Indiana. In total, an investment of about $2 billion dollars just over
the past 18 months.
As I said, we are expanding our engine and transmission plants in
Ohio to produce new, more fuel-efficient engines and transmissions. And
each of our plants is working to capacity.
In addition to the investments at the Marysville Plant that I've
already mentioned … at our East Liberty Plant we're expanding the
assembly line and adding new vehicle painting technologies.
In Indiana, we added a second production shift last year that doubled
annual production volume to 200-thousand units. This enabled the plant
to add the all-new Acura ILX sedan and hybrid this spring to its
existing lineup of Honda Civics.
The Indiana plant also produces the Civic Natural Gas vehicle … the
only mass-produced natural gas passenger car in America. So, with
production of hybrids and natural gas vehicles … there isn't another
plant in the world that can boast this kind of production diversity.
Last week, we informed our associates in Indiana of plans to further
increase production by another 50,000 units annually by early 2013 …
with an investment of $40 million dollars and additional employment of
almost 300 associates. This will bring our annual capacity in
Greensburg, Indiana, to 250,000 units. And early next year, we will add
production of the Civic Hybrid in Indiana.
In Alabama, just last night, we informed a county commission in
Alabama of our plan to invest $115 million dollars, expand our engine
plant there, and increase employment by another 50 associates. In
total, this will bring our new investment in Alabama to almost $400
million dollars over the last 18 months … which also is helping us
expand our auto plant and add a third stamping line that will increase
capacity by 40,000 units.
Collectively, this expansion of our North American manufacturing
operations speaks volumes about our confident outlook for the future.
When we began our operations in America, the foundation of the
company was not on investment in buildings and equipment. Rather, our
foundation was built on how our associates learned to focus on customer
satisfaction … with a high level of teamwork … a commitment to make the
best use of resources … and a passion for overcoming challenges. And
this culture continues to serve as the foundation of our operations in
North America and all over the world.
A recent news story referenced a 35 percent decline in U.S.
manufacturing employment between 1998 and 2010. During that same time
period, Honda increased its U.S. manufacturing workforce by 35 percent …
and by another seven percent since then. So, as Honda continued to
invest in facilities, we've been investing in people as well.
Earlier this year, two Honda associates whom I met at Honda of
America in the 1980s … ascended to key leadership roles within our U.S.
operations. Erik Berkman, who started his Honda career at the
Marysville Auto Plant in 1982, was named president of Honda R&D
Americas to lead our product development efforts here. And Brian Newman
… who started with Honda in 1979 at our Marysville Motorcycle Plant …
was named president of Honda of South Carolina Manufacturing where we
build all-terrain vehicles. And last year, Tom Shoupe, who joined Honda
about the same time I did in the late 1980s, was named president of
Honda Manufacturing of Alabama.
This kind of organic growth in our leadership capabilities is key to
our future. Over the past decade, a number of Honda associates from
Ohio and Canada have served as expert engineers for Honda factories in
Alabama … South Carolina … Georgia … Indiana … and Mexico. They have
shared their experience … in starting up or helping innovate these
operations.
A moment ago I touched on some of the challenges our Indiana plant is
undertaking in order to meet customer demand. When we launched the new
Acura ILX and ILX Hybrid in Indiana, it was an exciting environment …
with an effective mixture of younger Honda veterans like Tom Hilfinger …
who came over from Honda of America to provide leadership … and a
talented group of younger associates … many hired straight out of Purdue
University in Indiana. Together, they've accomplished a lot in a short
amount of time … including that Platinum Award in last year's IQS … and
successfully rolling out multiple new products and technologies.
The exciting thing is that the communication is not one way. While
we send experienced managers to new operations to help teach the Honda
Way … those operations often are the test bed for new ideas that are fed
back to our more mature facilities. It's one way Honda keeps its
vitality and youthful spirit … and makes continuous improvement in
quality, flexibility and efficiency.
For instance, all of our major plants have employed consolidation
centers where parts are staged and re-packed for proper sequencing on
our assembly lines. At our plants in Ohio and Alabama, the original
consolidation centers were within ten miles of our plants. Not a great
distance, but it still required a number of trucks to shuttle back and
forth each day between the center and the factory.
As part of our Green Factory initiative, when we built the Indiana
plant, we integrated the consolidation center into the operational
design of the plant … and constructed it right on site. The concept was
strong … the efficiency and flexibility such an advantage … that over
the past five years we've been applying the concept at all of our other
auto plants. On-site consolidation centers have been constructed in
Alabama … and at both auto plants and our engine plant in Ohio. The
centers are being completed at Anna and East Liberty this year.
Several years ago … while working in Alabama … I was talking with an
associate who had joined our engine plant from another automaker. He
observed that at his former company, whenever a new project began
everyone received explicit instructions … "
here's how to build a forging line, follow this blueprint." However, this associate was surprised that when he received a new assignment at Honda … his instruction was simply -- "
go to the Anna Engine Plant in Ohio, see what they have done, and make it better."
The reality is that there is no cookbook at Honda. No set way of
doing things that would dampen our associates' initiative, creativity …
and personal growth. This makes the Honda Way a bigger challenge …
certainly … but it also creates a bigger opportunity in terms of
innovation and the growth and maturity of people. This has been our
path in North America.
It's also been our way that achievement is met with new challenges.
Which is why last fall our CEO, Ito-san, decided to challenge our
manufacturing facilities in North America to step up to a new and larger
responsibility. In the coming years, our associates will play an
unprecedented role for an international automaker. We will have the
lead role in taking production know-how for key global models and
transitioning it to other Honda plants throughout the world.
As you know, our operations in North America have had exclusive
launch responsibilities for many light truck models that are developed
and built here … including the Honda Odyssey, Ridgeline and Pilot … and
the Acura MDX. But this new responsibility calls on our North American
operations to set a benchmark when it comes to production processes and
capabilities for key global models that also are produced in other Honda
plants around the world.
To give you an understanding of what this means … historically, our
production associates in North America went to our global New Model
Center in Japan to learn how to launch new models. Along with
associates from other Honda plants, they would gain the know-how and
refine the processes used to build those global models. Now much of
this activity will occur in North America.
So, our associates will need to deeply understand and then share the
production know-how that is needed to build these global platforms. We
also must understand the capabilities and process needs of each plant
around the world building that model.
Based on this leadership role, we also will be further increasing
automobile and parts exports from North America to markets around the
world. This fall, Honda will reach the one million mark in total
automobile exports from the U.S. to global markets. And, by the way,
this doesn't include shipments to Canada, which are a part of NAFTA.
These one million U.S.-made vehicles were sent to Japan, China and many
other markets in Latin America, Europe and the Middle East.
With this increased export role, Honda associates will need to learn
even more about the requirements of other markets outside of North
America … the needs of those customers and how we can exceed their
expectations. For this year, we will export about 100-thousand vehicles
… with the expectation that this annual total will double in the coming
years.
Further, we're expecting an almost 70 percent increase this year in
the export of major parts to Honda plants in South America, Europe and
Asia. This represents a substantial increase in business for many of our
suppliers in North America … and as we informed our more than 600
suppliers this spring … these parts exports are going to grow even
greater in the coming years.
This new responsibility will be an incredible challenge … but the key
to our success is our people … and how we have worked to advance and
utilize their skills and ideas. This is one of the unique attributes of
the Honda Way.
So, the bold challenge from our global CEO is something that our entire team in North America is very excited about.
We've known a lot of success over the past 30 years, and we intend to
continue winning in the future. In fact, I think it's a lot like our
fortunes in IndyCar racing. We supported Indy for six years when no one
other automakers were racing. As part of our long history in America …
and in racing … we looked at it as our responsibility to help maintain
this important part of American culture … even during a tough time for
business. But it's also about the competition.
So, as much as we enjoy the return of engine competition to the
IndyCar series, no one at Honda liked seeing the Bow Tie on the podium
for the first few races. And it was interesting how quickly people
counted us out after the first three races of the season. But our
engineers at Honda Performance Development were doing a lot of work
behind the scenes with our U.S.-developed Indy engine. And we restored
order with the big win at the Indy 500 and with a couple of more
checkered flags since then. We're not going to win them all. But we
love competition … and our Racing Spirit is as strong as ever.
In the same way – we view our business as both a competition, and
also as a shared responsibility to contribute to a strong U.S. auto
industry. The auto industry faces many challenges ahead … including
ever-increasing demands for safety and environmental technologies … new
information technologies… and global competition. But we have learned
so much … and gained so much … from our experience in America.
After 30 years of building cars in America … our challenging spirit …
and the abilities of our associates are alive and well. Now, we're
ready to utilize these capabilities and leverage them against new
challenges … in the effort to create new value for our customers and our
industry.
And we look forward to the competition, too. Thank you.
Source;
http://www.hondanews.com/channels/corporate-headlines/releases/remarks-for-rick-schostek-sr-vice-president-honda-of-america-mfg-automotive-press-association-tour-july-2012