Some interesting data pops up in a USA Today report on the 30 years of operations of Honda’s Marysville, Ohio, plant set up to build the Accord – the company had already been building Gold Wing motorcycles on the site for a few years by then.
A decade ago, about 51% of vehicle and parts manufacturing jobs were clustered in Michigan, Ohio and Indiana, traditional turf of the Detroit Three. Workers were mostly represented by the United Auto Workers (UAW) union.
Now, there are fewer than half as many total automaking jobs as a decade ago, and Michigan, Ohio and Indiana have just 44% of those left, according to data from the Center for Automotive Research cited by USA Today. Many of the jobs now are in foreign-owned, non-union ‘transplant’ facilities, mainly in the south.
About the time Honda opened its pioneering plant, General Motors, Ford and Chrysler accounted for three-quarters of new vehicles sold in the US That’s about 47% now.
Foreign automakers with US factories, in comparison, have about 48% of all new vehicle sales there, according to industry tracker Autodata.
While the foreign-brand sales include both imported and US-built vehicles, the robust market share has encouraged the companies to build cars there.
Today, 10 foreign-based car companies operate 16 big assembly plants in the USand others in Canada and Mexico, building for North America and for export. They also now make engines, transmissions and other key components in the US.
Whether US workers could build foreign-designed cars to the same quality standards and could work for foreign managers still were question marks in 1982, according to USA Today.
“There was suspicion about the quality of the American workforce” and its ability to perform under Japanese management techniques, recalled David Cole, chairman emeritus of the Center for Automotive Research at the University of Michigan.
Once the American-made Accords arrived at dealerships, for example, some shoppers looked at vehicle identification numbers, insisting on a VIN beginning with the ‘J’ that meant the car was made in Japan.
“In those early days, some people wanted Japan-built Accords, but that lasted about two seconds,” said Kurt Antonius, recently retired after 28 years running Honda’s US public relations office. He was at GM when Honda opened its plant.
He believes that bias against Ohio Accords was undercut when auto magazines “bought both and did comparisons. They were identical.”
Cole said Honda’s move into US production also broke Japanese automakers’ insular tendencies – which was more significant overall than building cars here.
“Historically, the Japanese tend to be very inward-thinking. Coming here was a huge, huge step. It was a cultural chasm of immense dimension,” Cole said. Honda “broke that barrier”.
In June 1983, less than a year after Honda began making Accords at Marysville, Nissan Motor opened a factory in Smyrna, Tennessee. That plant now can build more over 500,000 vehicles a year and makes Altima sedans, Frontier pickups and Pathfinder SUVs.
In 1986, Toyota began production at Georgetown, Kentucky, where it builds Camry and Avalon sedans. It can make 500,000 vehicles a year.
Toyota, Nissan and Honda have built more US plants since then. Subaru and Mitsubishi have joined them. BMW and Mercedes-Benz also now have US factories. And Hyundai and Kia have US plants.
And now, again, after a less than stellar experiement with a former Chrysler plant in Pennsylvania in the 1980s, so does VW.
Despite corporate anguish and embarrassment about the Westmoreland failure, last year, it opened a plant at Chattanooga, Tennessee, that makes its redesigned Passat.
“The decision in the Volkswagen Group to build a factory in the US was difficult, due to what happened at Westmoreland,” Christian Klingler, member of the VW Group board in charge of worldwide sales, told USA Today.
He and VW Group global CEO Martin Winterkorn discussed Westmoreland and Chattanooga during a visit to Detroit earlier this year. Klingler said it took years to get over the fear that US workers “wouldn’t be able to hold quality.” Winterkorn said VW’s mistake was trying to build an Americanised car at Westmoreland when “the American customer wanted a German” car.
So why did Honda have the guts to build a US factory?
There was then, as now, a big currency exchange risk in dollar- denominated markets. That threatened all foreign automakers. “It became clear that the only way you could isolate from the problem was to build where you sell,” Cole told USA Today.
Honda moved first because it was scrappier, evolving from a motorcycle and small-engine maker into a full-fledged car company over the objections of its home government. It also had a toe in the water, building those motorcycles in Marysville since 1979.
Added Cole: “Honda sees itself as the dirty-fingernail motorcycle mechanic kind of operation, more entrepreneurial than the others.”