What began as a handshake between Soichiro Honda and Ohio Governor James Rhodes in 1977 has blossomed into Ohio operations that provide more than 40,000 jobs and produce almost $20 billion in products annually.
Origins
Original 64 associates at launch ceremony.
Honda's decision in the mid-1970s to establish manufacturing operations in America was a bit ambitious, and quite risky. The company ranked only fifth in automobile production in Japan and not even the big Japanese automakers were venturing overseas. No one predicted that Honda would become, in the words of one study, "a major economic engine" for Ohio, the Midwest and the U.S. auto industry.
Back in the '70s, establishing production with U.S. workers inside the vast and complex American market was something foreign auto companies just didn't do. At the time, many experts predicted failure for Honda. After all, this was something no other Japanese automaker had ever tried. In fact, only one foreign automaker had tried, and its plant closed.
But company founder Soichiro Honda wasn't afraid to take risks. On September 10, 1979, a small motorcycle plant outside Marysville, Ohio, employing just 64 associates – 53 Americans and 11 Japanese – began producing small dirt bikes. The rest is history.
Growth
Launch of first automobile product at the Marysville Auto Plant, 1982.
The first Japanese car plant in America – Honda's Marysville Auto Plant – opened in 1982 next door to the motorcycle plant. Then into the West Central Ohio region came an engine plant, a second car plant, an expanded research and development center, a transmission plant, a purchasing operation covering North America, and a huge supplier parts network in Ohio and throughout the U.S. Almost overnight, Honda was transformed from a little-known company to one paying $1.2 billion annually in Ohio salaries.
The key component to this rapid growth was the "Five-Part Strategy" of 1987, which established Honda's North American operations as a self-sufficient region. The five goals were: construction of the second auto plant at East Liberty; significant domestic content growth in Honda vehicles, including expansions of Anna to become the largest Honda engine plant in the world; expansion of exports from Ohio; full-fledged R&D capabilities; and expansion of production engineering.
Economic Impact
Honda's growth, stability and manufacturing technology has become a critical force for Ohio and the Midwest. In only 25 years, Honda's operations were transformed into a "major economic engine for Ohio," producing "a total Ohio employment impact of 128,406 jobs," according to an in-depth economic study of the company in 2004.
Honda has become Ohio's number one vehicle producer, while the company has invested more than $6.1 billion in its Ohio facilities, and payroll taxes to local communities have exceeded $1 billion. The economic impact study summarized that, in Ohio, Honda had:
- Full-time Ohio employment topping 16,000
- Supplier employment at 40,000
- Value of annual goods produced at $17.1 billion
- Capital investment $6.1 billion
- Return on state investment $67 to $1
Supplier Network
A vast network of capable parts suppliers – who Honda considers its partners – enables Honda to be a self-sufficient North American vehicle producer. Honda builds its own engines, transmissions and major parts, such as the outside steel skin and the instrument panels, at its plants in the United States. But its 650 North American suppliers (more than 500 of them in the U.S. and 151 in Ohio) produce nearly all of the remaining 10,000 parts in a car or light truck.
Learn more about the Honda Supply Team.
View the 2004 "Honda Ohio's Suppliers – Partners in Continuous Improvement."
R&D
Honda is the research and development leader among Japanese automakers in the United States. Today, Honda is conducting "Complete Product Creation" in America – meaning many of the products that are built here are also designed and developed here. Its two main U.S. R&D centers in Ohio and California are responsible for developing, virtually from scratch, some of Honda's most innovative and popular products.
One-third of Honda and Acura vehicles (on a sales-weighted basis) are developed in America by a group of designers, engineers and support personnel. This includes advanced safety development and testing at one of the world's most sophisticated crash-test facilities in Raymond, Ohio.
