How US-made Japanese autos became an American success story

How US made Japanese autos became an American success story

How US-made Japanese autos became an American success story

Japanese automaker Honda was hiring American workers for its first plant on US soil. “It was a bit of shock that Honda decided to come to Ohio,” says Vining, now a chief engineer at Honda’s Marysville auto plant.

Vining, who was working for a small engine manufacturer, says getting a job at the new Honda plant felt like the opportunity of a lifetime. “Honda was a household name,” he says. “We recognized it for its quality and reasonable price.”

Today, Honda, Nissan (NSANF), Toyota (TM) and Subaru (FUJHF) all operate manufacturing plants across the United States, with Toyota and Mazda planning a new $1.6 billion auto assembly plant in Alabama that will employ around 4,000 people when it opens in 2021. Last year, Japanese car makers created 1.6 million jobs in the US, according to the Japan Automobile Manufacturers Association.
While Japanese car makers claim to build one third of all vehicles in the United States, and purchased $61.2 billion in US auto parts in 2018, many of those cars use imported Japanese parts, which were worth $16 billion last year.

President Donald Trump sees that as a problem. In May, he declared imported auto parts and vehicles a national security threat and threatened to slap up to 25% tariffs on them.

That has left the future of Japan’s auto industry on American soil looking uncertain. As Trump and world leaders descend on Osaka, in Japan, Thursday for the G20, tariffs and the trade war with China will be high on the agenda.

But this isn’t the first time Japanese motor brands have been threatened by a trade war. In the 1980s, the United States also hit Japanese automakers with tariffs designed to bring motor manufacturing back to America.

Those measures only helped Japanese brands like Honda thrive.

Made in Japan

When Honda arrived in the United States, the “made in Japan” label was tarnished by bad memories of World War II and associated with poor quality workmanship, due to low levels of economic development in Japan in the post-war years.

“[Japanese automakers] had to overcome a lot of prejudice and mockery,” says Wanda James, author of “Driving from Japan: Japanese cars in America.”

During the 1950s, however, quality Japanese products such as the Minolta and Pentax cameras entered the United States market, shifting American attitudes.

Honda's 1963 marketing campaign dubbed 'You meet the nicest people on a Honda' aimed to disconnect motorcycles from the rugged, counterculture biker image embodied by US brands.
In 1959, the American Honda Motor Co. was established in Los Angeles and, after partnering with a few local dealerships, began importing small bikes such as the Honda 50 to the United States. By the 1960s, American Honda sales were shooting through the roof, going from $500,000 in 1960 to $77 million in 1965 — fueled by a 1963 marketing campaign, sloganed “You meet the nicest people on a Honda,” which inspired the Beach Boys’ hit song “Little Honda.”

By deliberately attempting to disconnect motorcycles from the counterculture image embodied by acolytes of the Harley-Davidson brand, the campaign created a new market, selling Hondas as a lightweight, lower-cost option to people who had never before thought of buying a motorcycle.

Oil crisis … or a blessing?

The next decade gave Honda another big break. In 1973, tensions between the United States and the Arab world sparked an oil embargo that sent gas prices soaring. The embargo was lifted in 1974, but high oil prices remained.

  • Four Honda facts

  • 1948

    Soichiro Honda and Takeo Fujisawa establish Honda Motor Co., Ltd. In 1949, they introduce their first product, the “Dream” D-type motorcycle.

  • 1959

    Honda establishes its first overseas subsidiary in Los Angeles, California.

  • 1974

    Honda engineers create a CVCC engine, making the Honda Civic the first vehicle to meet the strict emissions standards of the US Clean Air Act — a law established in 1970 against air pollution.

  • 1982

    The Accord became the first car from a Japanese manufacturer to be produced in the US at Honda’s Marysville Auto Plant in Ohio.

Source: Honda

As Americans started seeking smaller, more fuel-efficient vehicles, Japanese car makers had an advantage over gas-guzzling US brands.

“That’s what sold a lot of the US public to the Japanese brands to this day,” says David Emerling, the director of the Center of Automotive Research (CAR) in Ohio.

Sales were also supercharged by the introduction of the 1970 Clean Air Act, which restricted the amount of lead in gasoline. In 1974, Honda engineers created a new type of combustion engine, which made the Honda Civic the first vehicle to meet the strict new limits on auto emissions, as the car could run on both leaded and unleaded petrol.

Honda bosses decided to expand the business and, in 1975, Shige Yoshida, then vice president of American Honda, was dispatched to scout out a location for an automobile plant. The goal was to source parts locally and make products suited to local consumers.

Yoshida says Honda Motor chose Marysville owing to the friendly, hardworking locals, presence of a testing track in East Liberty, Ohio, and a favorable investment climate.

As the plant prepared to open, Yoshida, now age 87, started visiting auto factories in Detroit to get a feel for how Americans operated. “I really liked how people-oriented one manager I met seemed,” says Yoshida. “He walked through the production aisles greeting and smiling at everyone.”

Shige Yoshida was tasked with exploring the possibility of setting up a Honda production plant on US soil in the 1970s.

Later in the 1980s, Yoshida welcomed US automakers to visit the Honda plants in Marysville. The collaboration, he says, was a good thing for the industry.

“Everyone saw Honda as an advantage, not a threat,” says Emerling. “Because they knew that job creation in a very rural state in Ohio would have an immense impact on the economy.”

Trade war of the 1980s

When recession hit the United States in the 1980s, Japan was the world’s second largest economy. Many Americans feared they were about to be overtaken.

After President Ronald Reagan took office in 1981, the United States began pressuring Japan to open its market to American companies and reduce the trade imbalance between the countries — much as Trump today is trying to reduce the trade deficit with China, now the world’s second largest economy.

A trade war began between Washington and Tokyo, as the US administration introduced Voluntary Export Restraints (VER), which capped the number of imported vehicles to the United States. In 1981, Japanese automakers were only allowed to export 1.68 million vehicles to America. Before the quotas were introduced they had exported 2.4 million in 1980, according to JAMA.
Honda produces its 3 millionth vehicle on January 21, 1993, a special Anniversary Accord model to commemorate 10 years of US auto production in Marysville, Ohio.
American consumers, caught up in the battle for global economic dominance, bore the cost by paying more for Japanese cars. A similar effect is being seen today, with retailers reporting that tariffs on Chinese products are driving up prices on consumer goods at home.

To avoid the quotas of the 1980s, more Japanese automakers decided to move manufacturing on to American shores and establish alliances with domestic car makers.

Nissan set up its first motor manufacturing plant in 1983 in Tennessee and Toyota set up shop in Fremont, California, in partnership with General Motors, in 1986.

Faced with import restrictions, Japanese automakers also pivoted to selling more lucrative, luxury vehicles, such as the Honda Acura and Toyota Lexus, which competed with the medium-sized cars that had traditionally been the bread-and-butter of American brands.

As Japanese automakers adapted to the political climate, they flourished. Almost one in three passenger cars sold in the United States was made by a Japanese-owned firm in 1991. By 2007, Toyota had overtaken General Motors (GM) to become the world’s leading automaker.

New automotive reality

Fast forward 12 years and Japanese manufacturers are once again under the gun. But while Trump is threatening tariffs to boost the US economy, experts say the President’s tactics could actually deal a devastating blow to American consumers and workers.

Production began at Honda's Marysville plant on September 10, 1979. The CR250R motorcross bike was the first model to be built.

“With history as a guide, a tight quota on Japanese auto produced cars or auto parts will hurt not just American consumers, but also American firms,” says Thomas J Prusa, an economics professor at Rutgers University. “That’s because many American jobs are tied to the supply chain that comes from Japan.”

It’s not just jobs that are at risk.

Currently, Japanese automakers fund research into manufacturing and advanced technologies such as artificial intelligence in tech hubs such as Silicon Valley. Tariff costs could squeeze budgets for such initiatives, says Manny Manriquez, general director of the Japan Automobile Manufacturers Association USA.

“The US auto industry can’t function and thrive if it’s cut off from international trade,” adds Manriquez. “Trade restrictions and continued uncertainty will not just weaken the entire automotive industry, they could result in lost opportunities for the US.”

Last year, in a bid to cement his “America First” strategy, Trump withdrew from the Trans-Pacific Partnership agreement, a trade deal between the United States and 11 other countries.
Since then, Tokyo has spearheaded a revised pact with the remaining signatories. And in 2019, Japan’s free trade agreement with the European Union — which benefits automakers — also took effect. Such deals position Japan well for doing business with partners outside America.
Toyota Motor said that Trump’s position “sends a message to Toyota that our investments are not welcomed, and the contributions from each of our employees across America are not valued.”

The company added that it hopes trade negotiations can be resolved quickly.

Made in America

Since setting up shop in the United States, Honda has crossed many milestones.

It produced its 25 millionth US-made car in 2018, and employs more than 31,000 people in the United States to make products that include cars, trucks, vans, SUVs, motorcycles, lawn mowers, and even robots.

Since being hired in 1979 as the ninth production associate for the ground-breaking Marysville motorcycle plant, Vining has witnessed Honda evolve.

He has worked in everything from manufacturing to information technology. He has seen the company grow from making motorcycles to engines, to setting up research and development facilities.

Vining says in upholding both Japanese and American ideas in Marysville, Honda merged two cultures.

“In the beginning, we talked about the Japanese culture and we also had an American way of doing things. But what we found is that we created what we called the ‘Honda way,'” says Vining. “It became the best of the American and Japanese ways.”

CNN’s Natalie Leung, Jason Kwok, James Griffiths, Brett Roegiers, Mohammed Elshamy and Brad Lendon contributed to this report. Edited by Jenni Marsh in Hong Kong and Mark Thompson in London.

How US-made Japanese autos became an American success story

Japanese automaker Honda was hiring American employees for its first plant on US soil. “It was a little bit of shock that Honda determined to return to Ohio,” says Vining, now a chief engineer at Honda’s Marysville auto plant.

Vining, who was working for a small engine producer, says getting a job on the new Honda plant felt like the chance of a lifetime. “Honda was a family title,” he says. “We acknowledged it for its high quality and affordable worth.”

Immediately, Honda, Nissan (NSANF), Toyota (TM) and Subaru (FUJHF) all function manufacturing crops throughout america, with Toyota and Mazda planning a brand new $1.6 billion auto meeting plant in Alabama that may make use of round 4,000 folks when it opens in 2021. Final 12 months, Japanese automotive makers created 1.6 million jobs within the US, based on the Japan Vehicle Producers Affiliation.
Whereas Japanese automotive makers declare to construct one third of all autos in america, and bought $61.2 billion in US auto components in 2018, a lot of these automobiles use imported Japanese components, which had been value $16 billion final 12 months.

President Donald Trump sees that as an issue. In Could, he declared imported auto components and autos a nationwide safety menace and threatened to slap as much as 25% tariffs on them.

That has left the way forward for Japan’s auto trade on American soil wanting unsure. As Trump and world leaders descend on Osaka, in Japan, Thursday for the G20, tariffs and the commerce conflict with China shall be excessive on the agenda.

However this is not the primary time Japanese motor manufacturers have been threatened by a commerce conflict. Within the 1980s, america additionally hit Japanese automakers with tariffs designed to deliver motor manufacturing again to America.

These measures solely helped Japanese manufacturers like Honda thrive.

Made in Japan

When Honda arrived in america, the “made in Japan” label was tarnished by dangerous recollections of World Battle II and related to poor high quality workmanship, because of low ranges of financial improvement in Japan within the post-war years.

“[Japanese automakers] needed to overcome a whole lot of prejudice and mockery,” says Wanda James, writer of “Driving from Japan: Japanese automobiles in America.”

In the course of the 1950s, nevertheless, high quality Japanese merchandise such because the Minolta and Pentax cameras entered america market, shifting American attitudes.

Honda's 1963 marketing campaign dubbed 'You meet the nicest people on a Honda' aimed to disconnect motorcycles from the rugged, counterculture biker image embodied by US brands.
In 1959, the American Honda Motor Co. was established in Los Angeles and, after partnering with a number of native dealerships, started importing small bikes reminiscent of the Honda 50 to america. By the 1960s, American Honda gross sales had been taking pictures by way of the roof, going from $500,000 in 1960 to $77 million in 1965 — fueled by a 1963 advertising marketing campaign, sloganed “You meet the nicest folks on a Honda,” which impressed the Seaside Boys’ hit track “Little Honda.”

By intentionally making an attempt to disconnect bikes from the counterculture picture embodied by acolytes of the Harley-Davidson model, the marketing campaign created a brand new market, promoting Hondas as a light-weight, lower-cost choice to individuals who had by no means earlier than considered shopping for a motorbike.

Oil disaster … or a blessing?

The subsequent decade gave Honda one other massive break. In 1973, tensions between america and the Arab world sparked an oil embargo that despatched fuel costs hovering. The embargo was lifted in 1974, however excessive oil costs remained.

  • 4 Honda details

  • 1948

    Soichiro Honda and Takeo Fujisawa set up Honda Motor Co., Ltd. In 1949, they introduce their first product, the “Dream” D-type bike.

  • 1959

    Honda establishes its first abroad subsidiary in Los Angeles, California.

  • 1974

    Honda engineers create a CVCC engine, making the Honda Civic the primary car to fulfill the strict emissions requirements of the US Clear Air Act — a legislation established in 1970 towards air air pollution.

  • 1982

    The Accord became the primary automotive from a Japanese producer to be produced within the US at Honda’s Marysville Auto Plant in Ohio.

Supply: Honda

As Individuals began looking for smaller, extra fuel-efficient autos, Japanese automotive makers had an benefit over gas-guzzling US manufacturers.

“That is what offered a whole lot of the US public to the Japanese manufacturers to this present day,” says David Emerling, the director of the Heart of Automotive Analysis (CAR) in Ohio.

Gross sales had been additionally supercharged by the introduction of the 1970 Clear Air Act, which restricted the quantity of lead in gasoline. In 1974, Honda engineers created a brand new sort of combustion engine, which made the Honda Civic the primary car to fulfill the strict new limits on auto emissions, because the automotive may run on each leaded and unleaded petrol.

Honda bosses determined to develop the enterprise and, in 1975, Shige Yoshida, then vp of American Honda, was dispatched to scout out a location for an vehicle plant. The objective was to supply components regionally and make merchandise suited to native customers.

Yoshida says Honda Motor selected Marysville owing to the pleasant, hardworking locals, presence of a testing monitor in East Liberty, Ohio, and a positive funding local weather.

Because the plant ready to open, Yoshida, now age 87, began visiting auto factories in Detroit to get a really feel for the way Individuals operated. “I actually favored how people-oriented one supervisor I met appeared,” says Yoshida. “He walked by way of the manufacturing aisles greeting and smiling at everybody.”

Shige Yoshida was tasked with exploring the possibility of setting up a Honda production plant on US soil in the 1970s.

Later within the 1980s, Yoshida welcomed US automakers to go to the Honda crops in Marysville. The collaboration, he says, was an excellent factor for the trade.

“Everybody noticed Honda as an benefit, not a menace,” says Emerling. “As a result of they knew that job creation in a really rural state in Ohio would have an immense influence on the economic system.”

Commerce conflict of the 1980s

When recession hit america within the 1980s, Japan was the world’s second largest economic system. Many Individuals feared they had been about to be overtaken.

After President Ronald Reagan took workplace in 1981, america started pressuring Japan to open its market to American firms and scale back the commerce imbalance between the nations — a lot as Trump right now is attempting to cut back the commerce deficit with China, now the world’s second largest economic system.

A commerce conflict started between Washington and Tokyo, as the US administration launched Voluntary Export Restraints (VER), which capped the variety of imported autos to america. In 1981, Japanese automakers had been solely allowed to export 1.68 million autos to America. Earlier than the quotas had been launched they’d exported 2.Four million in 1980, based on JAMA.
Honda produces its 3 millionth vehicle on January 21, 1993, a special Anniversary Accord model to commemorate 10 years of US auto production in Marysville, Ohio.
American customers, caught up within the battle for world financial dominance, bore the price by paying extra for Japanese automobiles. An analogous impact is being seen right now, with retailers reporting that tariffs on Chinese language merchandise are driving up costs on shopper items at residence.

To keep away from the quotas of the 1980s, extra Japanese automakers determined to maneuver manufacturing on to American shores and set up alliances with home automotive makers.

Nissan arrange its first motor manufacturing plant in 1983 in Tennessee and Toyota arrange store in Fremont, California, in partnership with Common Motors, in 1986.

Confronted with import restrictions, Japanese automakers additionally pivoted to promoting extra profitable, luxurious autos, such because the Honda Acura and Toyota Lexus, which competed with the medium-sized automobiles that had historically been the bread-and-butter of American manufacturers.

As Japanese automakers tailored to the political local weather, they flourished. Nearly one in three passenger automobiles offered in america was made by a Japanese-owned agency in 1991. By 2007, Toyota had overtaken Common Motors (GM) to turn out to be the world’s main automaker.

New automotive actuality

Quick ahead 12 years and Japanese producers are as soon as once more underneath the gun. However whereas Trump is threatening tariffs to spice up the US economic system, consultants say the President’s ways may truly deal a devastating blow to American customers and employees.

Production began at Honda's Marysville plant on September 10, 1979. The CR250R motorcross bike was the first model to be built.

“With historical past as a information, a decent quota on Japanese auto produced automobiles or auto components will harm not simply American customers, but in addition American corporations,” says Thomas J Prusa, an economics professor at Rutgers College. “That is as a result of many American jobs are tied to the provision chain that comes from Japan.”

It is not simply jobs which are in danger.

At present, Japanese automakers fund analysis into manufacturing and superior applied sciences reminiscent of synthetic intelligence in tech hubs reminiscent of Silicon Valley. Tariff prices may squeeze budgets for such initiatives, says Manny Manriquez, normal director of the Japan Vehicle Producers Affiliation USA.

“The US auto trade cannot operate and thrive if it is minimize off from worldwide commerce,” provides Manriquez. “Commerce restrictions and continued uncertainty is not going to simply weaken your entire automotive trade, they may end in misplaced alternatives for the US.”

Final 12 months, in a bid to cement his “America First” technique, Trump withdrew from the Trans-Pacific Partnership settlement, a commerce deal between america and 11 different nations.
Since then, Tokyo has spearheaded a revised pact with the remaining signatories. And in 2019, Japan’s free commerce settlement with the European Union — which advantages automakers — additionally took impact. Such offers place Japan nicely for doing enterprise with companions exterior America.
Toyota Motor mentioned that Trump’s place “sends a message to Toyota that our investments will not be welcomed, and the contributions from every of our staff throughout America will not be valued.”

The corporate added that it hopes commerce negotiations could be resolved rapidly.

Made in America

Since organising store in america, Honda has crossed many milestones.

It produced its 25 millionth US-made automotive in 2018, and employs greater than 31,000 folks in america to make merchandise that embrace automobiles, vans, vans, SUVs, bikes, garden mowers, and even robots.

Since being employed in 1979 because the ninth manufacturing affiliate for the ground-breaking Marysville bike plant, Vining has witnessed Honda evolve.

He has labored in every little thing from manufacturing to data expertise. He has seen the corporate develop from making bikes to engines, to organising analysis and improvement amenities.

Vining says in upholding each Japanese and American concepts in Marysville, Honda merged two cultures.

“To start with, we talked concerning the Japanese tradition and we additionally had an American manner of doing issues. However what we discovered is that we created what we referred to as the ‘Honda manner,'” says Vining. “It became the most effective of the American and Japanese methods.”

CNN’s Natalie Leung, Jason Kwok, James Griffiths, Brett Roegiers, Mohammed Elshamy and Brad Lendon contributed to this report. Edited by Jenni Marsh in Hong Kong and Mark Thompson in London.

Facts Source: https://cnn.it/2XxQ4DS

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