Monday, June 26, 2006 at 1:10 PM
Consider this, back in 1982, the New York Times ran a story titled, "In Ohio, the enemy is Japan." Today, though, Ohio is mourning the new Honda assembly plant they didn't get. Though they've long had extensive operations in Ohio, Honda's next U.S. expansion is happening in Indiana. So, how did Honda go from the Midwest's economic enemy to economic lifeline? We asked Dan Moulthrop to look into it.
Back in 1982, few Ohioans would have predicted love affair with the Japanese auto industry. Politicians campaigning with a protectionist message were scoring big with voters. Democrat Dick Celeste.
Dick Celeste: In 1982, when I was running for governor, I ran a television spot that hammered the Japanese for unfair trade practices, because they could sell their cars in the United States without huge tariff burdens, but we could not sell cars that were made, for example, in Lordstown, in Japan without paying a huge duty. And I said that wasn’t fair trade, and I promised as governor that I would fight for a fair trade policy for the U.S.
Well, more than 20 years later, American cars still are not big sellers in Japan. And American car makers and their parts suppliers are in critical condition - losing market share, staring at bankruptcy. But Japanese car makers are no longer Ohio’s enemy. They first won over lawmakers by agreeing to limit their car exports to the U.S. Second, by starting to invest in the country that was - and still is - the largest auto market in the world.
For Honda, that meant investing in Ohio, one of the states most worried about Japanese cars. The company started manufacturing motorcycles in Ohio in 1979. In 1982, with about $30 million of state money they built their first automobile assembly plant. Former Governor, Dick Celeste.
Dick Celeste: And that began a relationship that lasted the eight years I was governor, and during that time, they not only completed the first assembly plant and an engine plant, but added a second assembly plant that was designed and built and approved in record time. And Honda was employing 10,800 people in Ohio eight years after I took office.
But Honda did more than that for Ohio. And not just Honda, the company. Suichiro Honda, its founder, did a lot too. Celeste says Suichiro Honda served as a kind of economic ambassador for the state, showing other leaders in Japanese industry how to invest in and profit from the American Market. He was pretty good at pitching Ohio to his peers in the business world. But he had some help from Ohio’s most famous resident.
Dick Celeste: I think about the only other partner that would match Honda in importance would be Jack Nicklaus and the Muirfield Golf Course, which of course was like Heaven for any Japanese business man to come to Columbus, Ohio, and to meat this golfing god and be able to play on his course. So I think Honda and golf were probably the two most important ingredients.
There is still some grumbling. Ohio Congressman Dennis Kucinich explains.
Dennis Kucinich: The fact of the matter is they have kept the unions out. You know, I think that we need to see when we’re making comparisons about the Japanese and the American auto makers that there are certain disadvantages that the U.S. automakers had, some self-inflicted. The lack of a capacity to read the market, to come up with a design that would be popular, the lack of fuel efficiency, the but then other things, which are part of really what was a very solid system, of making sure people had a pension benefit paid to them as the result of years of good work.
Honda’s pay scale is somewhat lower: workers on its assembly lines only reach United Auto Workers’ union starting levels after two years on the job. Honda provides its employees a defined benefit pension like American car makers, but it also offers 401K plans, which helps limit future pension costs. That, and a substantially younger workforce mean Honda isn’t facing the pension commitments blamed for the problems of the Big Three.
Issuing 16,000 checks every pay period, Honda is one of Ohio’s largest employers, and they may become even larger. Company brass are dangling the prospect of another huge investment with 2,500 new jobs attached, setting off a bidding war among Ohio, Indiana, Michigan, and Illinois. Each of these states wants another success story, like that of Marysville, the small town Honda chose for its first factory and two more after that.
John Mapes has always worked for Honda. He started two weeks after high school graduation in as a welder. That was 1979. Now, he oversees parts quality and procurement for the East Liberty plant, just a few miles from Marysville. Like the thousand other workers - Honda calls them “associates” - on the floor, Mapes is wearing white pants and white shirt. Everyone, from the top brass down to the newest hire wears them. It’s like an army of milkmen. Mapes says the uniforms were just one of the cultural differences that were obstacles when Honda came to town.
John Mapes: Of course no one understood wearing a white uniform - that was very foreign to anybody. No one wore a uniform when they went to work, that was all new to everybody. Very strange to see anyone walking around in a white uniform. But then in the community, we had to win ourselves over - you weren’t sure how to approach people. Back then, it was a different time, a Japanese plant manufacturing anything in the U.S., the younger group was excited about that, the older generation was not so excited, necessarily, they still had maybe relatives that fought in the war, you didn’t know how to approach people for a couple of years. After that, once we won ourselves over in the community, and people saw us as a good citizen to the community, then people saw us a lot different, you were more, the pride was there, people were more interested to find out what Honda was about and what I did for Honda.
Beyond that, Mapes says, Honda encourages its employees to help out in the community.
John Mapes: We try to encourage our associates to go out and coach little league teams, and pick up trash or go to elderly homes. And meals on wheels and things like that - part of being a good citizen to the community.
That, and more than a million dollars a year in charitable contributions - not to mention the tax revenue created by those thousands of jobs - won big fans in local government.
Betty Polling was the County Recorder through much of the 80s, and so had a good view of economic ups and downs in Marysville and surrounding communities. She stands just off Main Street, in front of the barber shop her son has owned for three decades. Unlike many small towns in the Midwest, downtown is still a vibrant place - there is foot traffic, auto traffic, and few, if any, shuttered storefronts. Next to her, a brand new 2006 Honda Accord - it’s the fifth Honda she’d owned - a fan of the car, a fan of the company.
Betty Polling: Oh I think it’s done wonders. Just think of the jobs and the new houses, and what’s going on around Marysville. It’s just unbelievable. It’s been a big boon.
And that’s just what folks in other parts of Ohio, and in three other states imagine will happen to their towns. Honda’s decision is expected this month.
For 90.3 News, I’m Dan Moulthrop in Marysville, Ohio.
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