Sun, Sep 10, 2017 - Page 7 News List

How Honda lost its mojo and the mission to get it back

A failed 2012 Civic redesign and complaints by company talent of ‘indentured servitude’ have shaken Honda’s competitiveness, but a small group is working behind the scenes to bring it back

By Norihiko Shirouzu  /  Reuters, TOKYO

Honda’s management team, board of directors and operating officers were until recently all male and Japanese. The company named its first foreign (Japanese-Brazilian) and first female board members only three years ago.

In the fall of 2013, Berkman gave a speech in Motegi, Japan, at a meeting of Honda engineers and researchers. His message was clear: It was time for Honda to tap the brainpower of all its engineers.

Research staff in the US, some of whom had worked at Honda for more than two decades, were being treated like students, Berkman told an audience of about 500, including the company’s top leaders, according to a transcript of the speech.

“We don’t want to be indentured servants,” Berkman said. “My attitude is: ‘This is my company too.’ Increasing diversity within Honda, and specifically Honda R&D, is our path forward.”

Berkman said in an interview that many capable engineers and researchers in the US had left Honda over the years out of frustration at being disregarded.

“Many associates [in the US] felt Japan bosses were too controlling and unwilling to take on what we thought were reasonable risks,” Berkman said.

Many of those in the audience in Motegi, including senior managers, congratulated Berkman on his speech, Berkman and two other participants at the meeting said.

However, shortly afterward, Berkman was demoted from his role as Honda’s North American technology chief and reassigned to a more junior planning position in another unit.

“Maybe it had nothing to do with the speech. In my mind, it did. I kind of bit the hand that feeds me,” he said.

Honda declined to comment on the episode.

Berkman said he decided to retire from the company where he had worked for 33 years.

“I had been planning for retirement for many years and felt this was the right time to go,” he said.

Honda’s technology and research staff lack diversity, Matsumoto said.

“You only see Japanese faces in the place, but we are repositioning tech centers in places like the United States, Thailand and China to function more like satellite centers to our central labs in Japan, so as to encourage exchanges of people. Pureblood-ism doesn’t cut it. That’s our growing consensus,” he said.

NEW CHALLENGES

Japan’s manufacturing sector, especially the auto industry, prospered in the post-war era by harnessing monozukuri principles of steady design improvement and lean manufacturing that encapsulate the Japanese reverence for craftsmanship in manufacturing.

The aim was to produce vehicles with one-third of the defects of mass-produced cars using half the factory space, half the capital and half the engineering time.

Those efforts, honed over years, elevated the quality and reliability of Japanese cars to the point that by the 1980s, consumers in the US began choosing Japanese cars over US-made vehicles.

However, the industry is facing new challenges. Artificial intelligence and self-driving cars are forcing automakers to rethink the way they design and produce vehicles.

“Japan’s auto industry emerged in the post-World War II era by chipping away day and in day out to improve products. That’s not going to cut it in the face of the rise of disruptive self-drive, connected car technology and electrification,” Matsumoto said. “The new era calls for a totally new approach.”

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