Honda said it is spending $1 billion to revamp its Ohio manufacturing plants.
This will allow the company to build gasoline, hybrid and electric vehicles on the same assembly line, allowing the company to quickly adapt to the changing demand.
Mike Fischer, chief engineer of Honda development and manufacturing of America, said this is a huge deal for the company.
This is story has been lightly edited for length and clarity.
Mike Fischer: We’re calling it our second founding.
And as a company, it’s our opportunity to reimagine manufacturing, to set a good footprint for what the manufacturing business model needs to be, which we’re doing here in Ohio, which is an incredible opportunity and responsibility for us. It sets the business model for how we’re going to do it in North America, and ultimately how we’re going to deploy this globally.
So it’s an extremely important initiative that is gaining incredible traction not only for us internally, but as things hit the market later this fall.
Mike Frazier: So it sounds like this is almost a whole paradigm shift in terms of the way Honda, and perhaps other automakers, make cars since it’s no longer just ICE or internal combustion engines. It’s just a whole new way of making vehicles.
Fischer: Absolutely. Especially as we’re dealing with a market that you want to be able to have products that customers want. You design your facility to be flexible.
Frazier: So in other words, this allows Honda to adapt to the changing tastes in the market in terms of what vehicles Honda chooses to build.
Fischer: Absolutely. And it’s a really good business model, an approach for us to be flexible based on what our customers want, and also for us to be efficient about our manufacturing process that, while we’re doing that, we’re keeping our operations full, which equals efficiency, which ultimately equals good value for the customer when we set price positioning.
“This is the second founding of Honda, and we’re defining a paradigm shift for how we are doing business, hopefully how our customers see us, and creating new value propositions for our customers.”
Frazier: Why did you choose the plants in Ohio for this upgrade?
Fischer: Historically, Honda has been a company that tries to build vehicles and products where our customers are at. So a majority of our customer bases are here in North America. So that’s number one.
And also from the EV hubs perspective, not only from our R&D facility or manufacturing and our purchasing and our supply base and supply chain, is heavily located here in Ohio. So it was a good starting point for us, as a base for the business model.
The second thing is, we are very focused on flexibility. So as we enter into the EV market, as everybody knows, the cost of entry, and the transition into the EV market, is quite pricey. So for us, we tried to create a business model that is extremely flexible that we can utilize existing facilities, i.e. Marysville Auto Plant, East Liberty Auto Plant and Engine Plant. And the business model for us that we set, we want to build EV vehicles at 100% positioning towards 2040.
We wanted to be able to have flexibility as we started to build internal combustion, hybrid and EV vehicles on the same line that we have the flexibility to shift based on our customer’s demand and customers value proposition, to shift in the market, and move as our customers’ interests have.
Frazier: Will this require any change in the workforce at the plants?
Fischer: Absolutely. So, as we shift around, as I talked about the battery case manufacturing as well as the battery assembly operations, we’re projecting about 300 additional associates that will be added in our Ohio manufacturing operations here at Honda.
As I said earlier, this is the second founding of Honda, and we’re defining a paradigm shift for how we are doing business, hopefully how our customers see us, and creating new value propositions for our customers.
That was Mike Fischer, Chief Engineer of Honda Development & Manufacturing of America. Honda expects to debut the new electric Acura RSX later this year, which will be built in Ohio. Several new all-electric vehicle models with the Honda nameplate are planned thereafter, which will also be built in Ohio. Fisher says the company has a goal of producing only zero emission vehicles by 2040.
