Just-auto reports that Honda is dropping dark hints about its future as a Japanese domestic. In fact, if the island nation’s government doesn’t do some of that currency manipluation that Detroit’s been blaming for their lost U.S. market share for God knows how long, HoMoCo may up stakes and move. “Chief executive Takeo Fukui told a small group of reporters in Tokyo on Friday the strong yen could cripple Japanese industry and spur massive layoffs, and added the automaker would be forced to send more production overseas if the dollar persisted below JPY100. ‘If the government is saying, ‘We don’t care about the export industry’, then that’s fine – we’ll act accordingly… we could switch to importing more cars into Japan, bring research and development facilities overseas, and in an extreme scenario move our headquarters offshore. It would cause nothing short of a hollowing out of Japanese industry.” Whoa. So much for the suggestion that Detroit’s been hobbled by Japan’s support for its domestic automakers. Who’d a thunk it?
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I, for one, would be more than willing to adopt Honda.
Hmm… maybe I should be hoping for such an “extreme scenario”. It would be nice to have a domestic auto company that is actually respectable.
I too would be willing to adopt Honda, especially if the big 3 fold. I’ve been selective of my Detroit purchases (as anyone should be when shopping any make vehicle) and have managed not to be burned by their bad products… but even as a (more or less) domestic loyalist I’ve always respected Honda as a company of excellent engineers ran by engineers. If Honda transplanted to the US I’d be hard pressed not to jump aboard with both feet – there is after all an Accord in my small fleet of autos. I imagine they would probably migrate elsewhere in Asia though…
Geez, couldn’t the big-3 have simply threatened this instead of asking to get bailed out?
Honda could do quite well here, but, warning, stay out of Michigan.
And my advise remains, if you want to be patriotic buy good stock (i.e. TM, HMC), not mediocre cars.
One has to remember auto industry history in Japan. Japanese society was cast society in 60’s when Honda was building auto company. Toyota corporation did not look positive on this endeavor and Japanese government advised Soichiro Honda to stick to bicycles or motorcycles. There was never love between Honda and Japanese government that supported companies started by prominent families, not a mechanic. In essence, we can call Honda a capitalistic revolutionary.
As much as we would like for Honda to land in US, it probably would not carry its threat and even if it is, they will settle in Singapore or somewhere else in Asia.
Maybe they can go to Detroit and learn how to make a 52 MPG Accord…;-D…
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http://www.latimes.com/business/la-fi-neil19-2008dec19,0,1742816.story
I don’t know why anyone would assume the U.S. I would think Canada would be their first choice. Higher standard of living, with a culture and government more similar to Japan’s.
As for “So much for the suggestion that Detroit’s been hobbled by Japan’s support for its domestic automakers.” Couldn’t it be argued just as easily that Honda is making this threat to make the government offer it’s usual support in this tough time?
Keanu: Whoa.
Seriously though, could Honda maintain its corporate culture outside of Nippon?
While they may not be on the best of terms with the Japanese government, many of their corporate strengths are heavily influenced by Japanese culture.
I have to wonder if those positives would be diluted were they to move their HQ to another nation.
Couldn’t we just give them the 17 billion to take over Chrysler and move here? It’s a better deal than the present one.
Landcrusher,
Only in my sweetest of dreams.
Desperate if Honda would choose USA. Japan culture is far more disciplined and better educated. Discipline is a product of their history. Moving to the land of fruits and nuts won’t work. China a better choice.
Keep in mind..
1. Honda is the new kid on the block in corporate Japan (especially the auto side). They are more respected overseas than at home.
2. Honda’s about #4 in the US (especially if you don’t count fleets and/or trucks. They’re also #4 in Japan (and rather a niche player). The US volume is seriously bigger than the Japan sales.
3. Aside from the RL, TSX, and Fit, most transmissions and the Hybrid power-trains the whole US line-up is US sourcable (getting CR-V volume up could be tricky, Fit could probably go into Indiana). They already produce most of their US sales here, they don’t have the “Lexus issue” that Toyota does.
4. They’re in the middle of moving almost all motorcycle production under one roof in Japan, without a steady exchange rate, that is very problematic.
5. An awful lot of developement is already done at the Ohio and California Tech Centers already. Expanding either (or both) is at least a plausable threat.
While the Japanese haven’t been hit too hard by the latest crisis (at least comparitively), autos and electronics have been the two bright spots these last 15 years of slow to no growth (they are the rocks of the economy). Neither has all that great political pull (the LDP base is farmers and construction companies, both of which are drains on the public finances). He’s pointing out that the others might vote for them, but the export industries are what write the checks.
Given the way their American operations have run, I’d say it’s worked pretty well for them over here.
Wow.
I’m not one for blind-brand loyalty, but if they did do something drastic like that, perhaps the next vehicle purchase would be another Honda/Acura product if so.
(Meaning, I’m very happy with my current Honda).
Demetri and Landcrusher,
There is an interesting tie between Honda and Chrysler. It was during the 1980’s that a young team from Chrysler was allowed to study Honda’s development methodology and manufacturing techniques in Ohio. This “Honda Study Team” led the way to Chrysler developing it’s own “Honda like” development methodology, one that favored pushing the responsibility for making product decisions as far down the chain of command as possible, one that favored bringing suppliers in early and partnering with them in the development process; one that brought all the parties responsible for the new vehicle, design, engineering, manufacturing, marketing, together under one project leader. This is why Chrysler, previously known for milking it’s K car platform into multiple vehicles (including the first minivan), had a design rebirth in the 90’s and was able to create new vehicles faster and for less money than it’s competitors.
After Dumbler raided their cash kitty they totally disbanded the development process and got rid of the folks who had used it so successfully so they could bestow some of that good German engineering on the poor Americans from Auburn Hills.
I for one would love to see Honda reteach their techniques to Chrysler. Chrysler could be reborn and Honda could get a real truck and Acura a proper rwd flagship.
Smart move by Honda. There is a big void coming in Detroit, and Honda is a front-runner to fill it along with Toyota, Nissan and Hyundai.
If Honda emigrates I, the Mighty Obbop, prognosticator extraordinaire, anticipates a move to Brazil for sundry reasons.
Of course they’d emigrate to the US. We’re the world’s largest car market. Besides, they want to go to a country where its cheap to export, what better place than America, home of the world’s next big carry currency.
I could also see Hyundai moving here at some point too. Once they get their quality and rep up a little more than they already have, it’ll just take the eventual demise of the Big Three to move them up a few notches. Even though the US brands have feasted on blind brand loyalty, I think the average American’s distaste for the bailout shows a healthy cynicism for crappy products and cars that we don’t need.
Hell, my hometown could use a nice big Honda Civic or Hyundai plant. I can’t imagine we’d turn down the jobs.
Chrysler for Honda straight up? I’d take that deal, too bad the Japanese wouldn’t.
Fukui was just blowing off steam. I can’t believe that Honda would ever leave Japan.
I may, of course, be wrong. Japanese are hard for Americans to understand. I lived in Japan for nine years, did a Fulbright grant at Tokyo University, worked for a Japanese law firm for a time, and have been married to a Japanese woman for almost 20 years. Yet I am still surprised by many things that Japanese do.
Japanese business and politics are just as complicated, if not more so, as those in the United States. Honda’s status in Japan is particularly complex. As some people have noted here, Honda ignored “administrative guidance” from the Japanese government to stay out of cars.
Honda does what they want to do — forget the consequences. So far they have done pretty well, although they lag behind their competitor Toyota. Now there is a fierce rivalry.
Be interesting to see what happens as we continue to sail into the dangerous, uncharted waters of the current economic maelstrom. Who knows what ships will sink, and what ships will decide to fly new colors.
The Honda Marysville plant is to some extent the result over Soichiro’s disagreements with MITI over the future role of his company. I would think the USA, specifically California in The Bay would be Honda’s home away from home so-to-speak. They’ve been plugged into that area for such a long time already, and while Canada may or may not be “more like Japan” the Bay Area is definitely more like Honda. Hondas are probably in the top 3 of actual cars you see in Silicon Valley.
They sell most their stuff in the ‘States anyways, and have I think designed several vehicles more or less exclusively in the United States, with little input from HQ.
Autonut: I think you meant “caste” society.
I would LOVE to see Honda move HQ to the San Francisco Bay Area. They would find much to like about the move. We even have a real live single payer health-care system, which system is the most effective and efficient in the US … Kaiser. Unlike most arrangements, Kaiser isn’t just the insurance company, they own the hospitals, hire the doctors, etc.
I doubt that Honda will make changes any more than your typical Bermuda registered insurance firm is headquartered there. Honda may be a renegade by Japanese standards, but in California?
The key aspect of Japanese culture is embodied in the proverb “The nail that sticks up gets hammered down.”
Honda certainly would not feel at home in San Francisco. Their US headquarters is in Irvine…
Still, it would be nice to be excited about a domestic automaker…
Rix-Still, it would be nice to be excited about a domestic automaker…
Well put, it would be something I have yet to see in my lifetime.
Folks, there is a reason why GM Euroe in in Switzerland: Taxes. Moving the headquarters doesn’t mean moving production. (Switzerland isn’t known for its high auto output.) If I’d be Honda, I’d more my HQ to Hong Kong. MUCH better than the Bahamas. And right next door to a major manufacturing hub.
@sharky: Please don’t post under the influence. Thank you!
I hear there’s a nice, soon to be empty office complex in Auburn Hills they could have.
MattVA:
I don’t know why anyone would assume the U.S. I would think Canada would be their first choice. Higher standard of living, with a culture and government more similar to Japan’s.
Interesting… Honda would fit into Toronto nicely. Or maybe one of its burbs.
Vancouver may work better!?!
Calgary? Edmonton? Not much auto presence and too cow-town. Ish.
Burlington, VT could be a sleeper choice. You would have to get a secession referendum through the state house and Canada would have to pony up a few loonies to buy it, but it’s probably workable…
Well, I suppose this is actual confirmation that Japanese corporations do indeed pressure their government to manipulate their currency versus others. Hmm.. This is more than nudge, nudge, wink, wink.
Hmmm… So Japan has for sure and real subsidized its car exports, just like the UAW and CAW said. Not good at all.
Up till now, I assumed that this was just sour grapes from Western commentators. The Japanese yen collapsed in the early ’90s with their real estate bubble recession, and their currency slid. They have done all the wrong things, like no spending, and haven’t recovered from their recession fully in the last fifteen years, forcing a high savings rate by citizens worried about the future. Then apparently used this to unfairly compete on the world market with a low value yen.
And now, as things go pear-shaped, to use a Brit expression, they start to blackmail their own government. Ruin our currency, or else we leave for Bora Bora.
Honda has always seemed to me to be a fairly ruthless company business-wise. Luckily for their customers, they do recognize the need for customer satisfaction, and got that right.
I am conflicted. Any country that gets Honda’s headquarters had better not underestimate their steely determination to proceed in the Honda Way.
I suppose this is actual confirmation that Japanese corporations do indeed pressure their government to manipulate their currency versus others.
It really isn’t confirmation, not at all.
All countries try to manage their exchange rates to some extent, including the United States. You just saw an example of that when the Federal Reserve cut its rate to an amount that is basically equal to zero.
The free market ultimately determines the value of a currency. Governments can try to impact the value, but they have limited ability to do so.
Even in a control economy, governments have limited ability to set exchange rates. When governments incorrectly price their money, they end up with black markets. People on street corners will trade money in these situations because they know that the government rate is wrong and can only be imposed on the market with cops and brute force.
What Honda was really telling Japan was to dump liquidity into the economy, because Japan’s rates are also close to zero, so they are running out of options. That’s what pretty much everyone around the planet has been saying that the governments of the US, EU, etc. need to be doing.
The yen is strong, not weak. If Japan was manipulating currency, the yen wouldn’t have quadrupled in value over the last 30 years.
This is nothing but a PR stunt and you idiots are jumping all over it…I wonder what you guys would do if your jobs went over to Japan.. Move with it I would hope.
Rix wrote:
Honda certainly would not feel at home in San Francisco. Their US headquarters is in Irvine…
Actually, American Honda’s main campus is in Torrance, CA.
Irvine is home to Mazda’s corporate headquaters, along with a significant presence by Hyundai/Kia. Ford’s Premier Automotive Group (Lincoln/Mercury, Volvo, Land Rover) used to be based in Irvine, but they moved back to Michigan several years ago.
first time ive posted but here goes:
say this were 1963, when wages were high and the gettin’ was good. could you imagine any car company from korea, japan, or germany ever wanting to plant roots here to build cars (or anything else really)?
it would be akin to the outcry against nuclear power plants. “NOT IN MY BACKYARD! i didnt fight them “insert expletive here” just to have them undercut my wages with their junk!”
now we beg them to come over; federally and locally bankroll them to come over. thats how bad it’s gotten in this “new world economy”.
theres only so much wealth in the world, regardless of how much money we print. weve shipped our true wealth, our industrial might, everywhere else.
there is only way to bring everyones standard of living to an equal level thats bring down the standard of living for most everyone in the industrialized world starting first in america.
america as a sovereign nation means much of nothing anymore. weve lost our way in search of constant and continual growth in money, when deep down everyone knows that just cant be. some years are up and some down you can never have constant growth. uness you have had your head in the sand to the way things are for better than twenty years.
and no i am not a supporter of any bailout for cars, banks, cities, coorporate welfare recipients, defense indutrialists, insurance companies or anybody else who’s pants have just popped the top button and now they need liposuction. gm would be the first to say (up to 2 months ago anyways)that they were a multi-national conglomer-frick of the highest order. now they say “go USA” all the way. i just get disgusted. sorry if i rant.