Honda promotes American managers in push to revive U.S. market

By ALAN OHNSMAN / Bloomberg News

Honda Motor Co. was the first Asian carmaker to build autos in the U.S. and is the most dependent on the market. Now it's also putting more non-Japanese in key roles.

North American Chief Operating Officer Tetsuo Iwamura becomes executive vice president April 1 and No. 2 to President Takanobu Ito. His new seven-member board will manage activities from product planning to production to sales in North America. Three members will be U.S. natives, the first time Americans have held such responsibility, including Erik Berkman to lead regional product development and design.

"Honda quite literally has become a North American car company headquartered in Tokyo, and that's a horrible combination," Jim Hall, principal of 2953 Analytics Inc., an auto consultant in Birmingham, said in a phone interview. "When your headquarters isn't in your most important and biggest-volume market, you become disconnected. We can see that's what's been happening to them. This is to reconnect headquarters with their most important market."

While Honda's U.S. problems have been less dramatic than those of Toyota Motor Corp., which recalled millions of vehicles for unintended acceleration, they've been significant. Even before last year's earthquake and tsunami cut supplies, core Honda cars such as the Civic and Accord were losing ground to Hyundai Motor Co. and Ford Motor Co. models that won praise for stylish looks and fuel economy.

Growing competition spurred Honda to offer U.S. incentives that were 87 percent of the industry average in this year's first two months, according to Woodcliff Lake, New Jersey-based Autodata Corp. In 2008, Honda's discounts were less than half the average.

'Out of Necessity'
"For too long they've lived in this cocoon of 'What we're doing is good enough,' " said Maryann Keller, principal of a self-named consulting firm in Stamford, Conn. "There's a recognition that that's no longer the case, so I think they are making these moves out of necessity."

For the first time, Honda's No. 2 executive will be based at the company's U.S. headquarters in Torrance, Calif., instead of Tokyo.

"Knowing the current competitive and complicated marketplace, rapid changes in customer needs, we think it's better to put more emphasis on the American side," Iwamura said in a March 12 interview. "Production and R&D, development facilities, those can be done by investing money. Localization of the people is one of the key issues."

Toyota Moves
Honda's revenue from sales of autos, motorcycles and power products in North America was 986.2 billion yen ($12.7 billion) in the quarter that ended Dec. 31, or 51 percent of its global total. While U.S. sales of Honda and Acura autos fell to 1.15 million units last year, which was still 38 percent of the company's worldwide volume.

Toyota, too, is giving more authority to North American executives, to improve development of products for the market and avoid a repeat of the 2009-10 recall crisis.

This month, Toyota promoted Jim Lentz to chief executive officer of its U.S. sales unit, the first time that job has gone to an American.

Asia's largest automaker last week said Steve St. Angelo, executive vice president for North American engineering and manufacturing, will oversee regional production as part of his duties on Toyota's North American management committee. Ray Tanguay, chairman of Toyota's Canadian unit, is responsible for North American quality issues. Lentz will oversee regional sales, marketing and product planning.

Honda's Revamping
Toyota President Akio Toyoda has said shifting more responsibility to local managers in North America is central to his goal of restoring customer satisfaction hurt by the recalls.

Honda's U.S. car and light truck sales slid 6.8 percent last year after natural disasters in Japan and Thailand curbed output of parts and vehicles. The company's redesigned Civic also flopped in tests by Consumer Reports, which recommended previous versions, a sign that the carmaker's ills extended beyond 2011's one-time events.

For decades, products created for the U.S. came from a "synergy effect" between Japanese and American engineers, Iwamura said. Now, American engineers making product decisions for U.S. customers is the best way to increase competitiveness, Iwamura said.

"That is one of the reasons we appointed Erik as the top man of R&D," he said. Berkman, who begins his new job April 1, was traveling in Japan and unavailable for an interview.

Honda's Targets
John Mendel, executive vice president of U.S. sales, is also joining Berkman on Honda's North American management board, as is Tom Shoupe, president of the company's Alabama plant.

Honda wants to rebound this year with a 24 percent U.S. sales gain. It has made some progress, boosting sales 11 percent in 2012's first two months, led by a 45 percent jump in Civic deliveries. The company plans to release a modified Civic later this year to address concerns raised by Consumer Reports, as well as a redesigned Accord.

The company's U.S., Canadian and Mexican plants may also set a production volume record, building about 1.8 million vehicles this year.

The automaker is completing more than $690 million of upgrades at U.S. plants and is also building an $800 million factory in Mexico to produce subcompact models such as the Fit.

In January, Honda said it planned to build its Acura NSX "supercar" in Ohio within about two years. The racing-style coupe will sell for more than $100,000. The site and cost of that project hasn't been announced.

Restoring Reputation
Restoring its reputation as an industry innovator, a legacy of founder Soichiro Honda, is a bigger challenge than boosting sales and production.

"It's not just the Koreans; everyone has gotten better," Keller said. "In terms of quality and features, it's a game of equals. It's just a lot harder for Toyota and Honda to stand out."

It may be years before Honda's changes in local management are effective, said Hall of 2953 Analytics.

"It's safe to say that if they keep going the way they were going, they were heading for a decline with other guys passing them and just doing better than they are," he said. In the U.S., "the question is whether they've caught their problems soon enough to not get passed by Hyundai-Kia."

Source;
http://www.detroitnews.com/article/20120325/AUTO0104/203250305/1148/auto01/Honda-promotes-American-managers-push-revive-U-S-market

Honda Putting No. 2 Executive in U.S. in Localization Drive

Honda plans to post its second-highest ranking global executive in the U.S. for the first time as the automaker that was Japan’s first to build cars in the market extends a three-decade localization push.

Tetsuo Iwamura, 60, Honda’s chief operating officer for North America, on April 1 adds the titles of executive vice president and executive officer, the Tokyo-based company said today in a statement. Iwamura is to also join Honda’s board in late June, pending shareholder approval, the company said.

Iwamura will continue to run operations in North America while assisting President Takanobu Ito in managing global sales, said Jun Odajima, a company spokesman. “This is the first time the top North American executive has also been the No. 2 company official,” he said.

The promotion of Iwamura and naming of Erik Berkman to lead Honda’s U.S. research and development unit, the first time that job has gone to a non-Japanese engineer, come as the company lifts production across North America, its biggest source of revenue, to counter a rising yen. Honda is increasing vehicle output at plants in the U.S. and Canada, adding a factory in Mexico to build subcompacts and preparing to make the Acura NSX supercar in Ohio by 2014.

Berkman, currently vice president of corporate planning and logistics for U.S. auto operations, is to become president of Honda R&D Americas on April 1, the company said.

Honda’s U.S. headquarters are in Torrance, California. The company’s American depositary receipts rose 1.3 percent to $37.28 at the close in New York.

Source;
http://www.bloomberg.com/news/2012-02-22/honda-putting-no-2-global-manager-in-u-s-in-localization-drive.html

Honda CEO “Not Satisfied” With Automaker’s Recent Performance

Honda CEO Takanobu Ito criticized the “complacent” nature of his company at the Beijing Auto Show, taking aim at poor sales figures, a lack of product direction and a need to focus on improving the company’s hybrid systems.
Honda’s market share slid by 0.4 percent, with Ito citing the disappointing sales of the Insight hybrid as a particular sore spot. In Insight has been pitched as an alternative to the Prius, but poor reviews, lower fuel economy numbers and the lack of cachet surrounding the vehicle has seen the Insight get trounced in the sales race, with Toyota selling 5 times as many Prius hybrids.

The most surprising part of this candid interview was Ito’s admission that “It’s possible we grew complacent about the good performance of the Accord, Civic and CR-V.” The Accord recently lost a major Car and Driver comparison test to the Hyundai Sonata, while the CR-V has gone nearly 8 years without a re-design (that must be Bejing specific b/c the current CRV was redesigned in 2007 here in North America). Ito also cited Hyundai as a major threat, and said that Honda must change its course to compete with the Korean giant. “The biggest problem is we’re not selling the value of our products. We have to improve the performance of our products as well.”

Ito also announced plans for a new hybrid system for large cars, involving two large electric motors, one which charges the battery, the other which gives the gasoline engine a power boost. The system will be used on an upcoming Acura hybrid, as well as minivans and mid-size cars.

Honda has traditionally resisted a number of technologies employed by its competitors, including turbochargers, rear-wheel drive and V8 engines, and stuck to their formula of light-weight, efficient and practical vehicles. But Ito’s comments could indicate that the “Honda way” is beginning to falter, and some new direction is needed at the venerable Japanese firm.

Source;
http://www.autoguide.com/auto-news/2010/04/honda-ceo-not-satisfied-with-automakers-recent-performance.html

Question and Answer with Honda CEO Takanobu Ito

Honda's new CEO Takanobu Ito talks to Autocar about the problems with recycled carbonfibre and why he can't sell fuel cell cars.

Do you plan to give us more cars in the future with more platform sharing?
To be honest, we don’t sell a huge variety of cars in Europe. To sell a large variety would undermine our investment efficiency and impact our business. We want to respond to our customers’ needs, so for future cars we will try to offer more varied cars on the same platform and we are revisiting our development in that respect. We will try to reduce the number of platforms, but this will take time.

In Europe Toyota is seen as the green car company, despite Honda’s long history with hybrids. How do you address this?
Our European sales people are largely to blame. We tried to enhance our position with the Civic hybrid but failed. But the CR-Z and Insight will help us enhance awareness that Honda is a green car maker. We also want to introduce the FCX to Europe and have started testing here.

Talking of green technology, what happened to the clean diesels you were working on?
It was too challenging to produce a commercialised clean diesel. We got it to work at a research and development level, but we couldn’t make it work commercially. But we haven’t abandoned clean diesel research, and we’re still working on the technology.

Honda doesn’t believe electric vehicles have much of a future, yet you are working on battery-electric cars. Why?
The performance of batteries is evolving and there are possibilities. But the energy that can be stored is less than an internal combustion engine can produce, and with current battery technology electric vehicles are city commuters. But they could be used as a second car, with an internal combustion-engined car as the first vehicle. We are in the midst of considering what can be done with an electric commuter car.

Honda has, from an early stage, worked on fuel cell vehicles. Battery EVs are heavy, not fun to drive and aren’t reliable, and when it comes to cars lighter is better. FCVs are going in that direction.

So when do you think you’ll be selling fuel cell cars?
We don’t have any plans to sell them as there isn’t a hydrogen infrastructure to support them, and they would be very expensive. Infrastructure is key to the adoption of fuel cell vehicles.

And the cost?
We can do cost reduction and mass production of the technology. It’s simple to produce fuel cells; it’s the chemicals they use that cost money, along with the precious metals. But we can cut the cost of those, too.

What’s happened to the small sub-Jazz car that was mentioned last year?
The recession has caused our business to go through difficult times, and we had to revise our business plan, which has slowed development. Our priority now is to increase sales of the Jazz in Europe. But we haven’t given up on the small car. We’d like to try it in Asia first.

Would you consider a joint venture with another car maker?
I don’t imagine Honda seeking a partner. But if another car maker approached Honda, what would happen? Well, the final products coming out of the factory would have to be Honda products. I wouldn’t rule out the possibility of a partnership, but I can’t see a need for it now.

Volkswagen is working on recycled carbonfibre for cars. Is that something you’re interested in?
The problem with carbonfibre is that you have to bake it at high temperature and at high pressure, which is not suitable for mass production. It’s difficult to recycle, too; recycled carbonfibre can’t be reused in automobiles. That’s why I don’t think it will be used in mass-produced cars.

Source;
http://www.autocar.co.uk/News/NewsArticle.aspx?AR=245649#