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Discussion Starter #1
Honda reported a 19% decrease in operating profit for the fiscal year that ended March 31st, 2015. I guess part of the problem is that Honda had to start spending more on quality costs because of the Takata airbag recalls.

To help fix the problem CEO Takahiro Hachigo says:

Hachigo said that the result is that Honda has too much production capacity and this affects its profitability. He said that the company will make more use of its plants outside of Japan as its global export hubs.
http://www.4wheelsnews.com/new-honda-ceo-to-focus-on-innovations-overseas-production/
 

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Thats interesting in itself. Sounds like Honda has wasted production capacity and they intend to turn them into warehouses or something? Japanese factories take precedent...
 

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Thats interesting in itself. Sounds like Honda has wasted production capacity and they intend to turn them into warehouses or something? Japanese factories take precedent...
Well its not that the Japanese facilities take precedent, its that ebcause of the yens status against the dollar its cheaper to manufacture them in Japan

For years most Japanese auto makers, faced with a strong yen, sought to produce more cars in local markets overseas to take advantage of lower production costs there. Now, the yen’s nearly three-year decline against the U.S. dollar, which has already inflated profits by driving up the value of overseas earnings in yen terms, has also made it cheaper in many cases to make the cars in Japan.
http://www.wsj.com/articles/nissan-honda-to-ship-more-cars-from-home-1436522856
 

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It's hard for me to grasp how currency value impacts the auto industry. Sometimes I get it and other times I don't A devalued yen means that while wages and costs stay stable in Japan, moving that money to another market means that Honda would actually have less money. Whether the production happens in Japan or elsewhere though, the production still gets done nonetheless.
 

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It's hard for me to grasp how currency value impacts the auto industry. Sometimes I get it and other times I don't A devalued yen means that while wages and costs stay stable in Japan, moving that money to another market means that Honda would actually have less money. Whether the production happens in Japan or elsewhere though, the production still gets done nonetheless.
actually the yens states has inflated their overseas profits even further...
 

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And despite that their profit has declined??

That surprises me.
For years most Japanese auto makers, faced with a strong yen, sought to produce more cars in local markets overseas to take advantage of lower production costs there. Now, the yen’s nearly three-year decline against the U.S. dollar, which has already inflated profits by driving up the value of overseas earnings in yen terms, has also made it cheaper in many cases to make the cars in Japan.
http://www.wsj.com/articles/nissan-honda-to-ship-more-cars-from-home-1436522856
 

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These will probably be some of the better vehicles produced from Honda till things get moved elsewhere and then we'll be stuck with build quality that is not as good!
 

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These will probably be some of the better vehicles produced from Honda till things get moved elsewhere and then we'll be stuck with build quality that is not as good!
who said that Honda global plants produce cars any worse then Japanese plants? Its still the same company values and protocols in place. The CR-V is hammered together in Ontario, they don't seem to be falling apart...
 

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who said that Honda global plants produce cars any worse then Japanese plants? Its still the same company values and protocols in place. The CR-V is hammered together in Ontario, they don't seem to be falling apart...
Exactly, its essentially the same materials, built under the same guidelines and regulations honda has set in japan. My 07 coupe was from Canada. My 2010 sedan was from ohio. My 13 was from ohio. And i'm not really sure where my 14 coupe is from. There's no reason to believe that quality suffers based on location of build. Not when all the plants honda operates are using the same parts and same rules, regulations and quality control standards. That's why quality control exists.....
 

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Exactly, its essentially the same materials, built under the same guidelines and regulations honda has set in japan. My 07 coupe was from Canada. My 2010 sedan was from ohio. My 13 was from ohio. And i'm not really sure where my 14 coupe is from. There's no reason to believe that quality suffers based on location of build. Not when all the plants honda operates are using the same parts and same rules, regulations and quality control standards. That's why quality control exists.....
I agree with you. I think that some people just assume that if something is built in a non-first-world country that the quality must suffer, but i don't think that's true. Companies want to save money on production costs, but i think that they have learnt that can't come at the expense of quality.
 

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I agree with you. I think that some people just assume that if something is built in a non-first-world country that the quality must suffer, but i don't think that's true. Companies want to save money on production costs, but i think that they have learnt that can't come at the expense of quality.
Absolutely. I was on some of the VW forums when they announced that after initial launch production of the Golf would be going to their mexico plant. People freaked out!!! They were so utterly (and unjustifiably) upset that is was going to be built in mexico, claiming that build quality and reliability would suffer.

I'd like to think that just isn't true. A good company has standards in place for a reason, so that no matter who's building the cars they're using the same parts and doing the same quality checks to ensure reliability. It's really just racist to think someone in mexico wouldn't work just as hard for their paycheck as someone in america or germany or japan would...
 

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well people do have a point that build quality can and will suffer in the third world if its not managed to the letter by HQ. Honda has had all kinds of problems coming out of Celaya, Mexico. Ford has had problems in Mexico with QC as well. Mexican VW's actually have their fair share of niggles as well, maybe they're better now, but I remember around 06,07,08 there were strange things happening...

Then again Ducati produces Monsters in Thailand and suffer none the worse for it... but KTM produces the Duke 390 in India and its shown its share of issues....
 

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It all comes down to management, if management is running things right and putting the right training into place and the right quality control measures then there should be a big reduction in problems, probably what Ducati and some other bike makers are doing (i think Honda is another one)
 

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One person that commented on that said the following:

The rise of NUMMI, or how one of the worst auto plants in America started producing some of its best cars, thanks to lessons learned from the Toyota production system.
and it's simple as that, if one company is doing it right, might as well model a process based off of what they're doing.
 

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Discussion Starter #17
One person that commented on that said the following:



and it's simple as that, if one company is doing it right, might as well model a process based off of what they're doing.
If you listen to the whole podcast though, they talk about why they couldn't spread that system through the other plants. In Japan the management and workers all are working together whereas the American union system created an adversarial culture between management and workers. Not only that, the whole management structure of GM was unwilling to change or adapt in order to support the Japanese system

Apparently American workers would actually purposefully sabotage vehicles to harm the company when they were upset. And America thinks it has the best workforce in the world...
 

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If you listen to the whole podcast though, they talk about why they couldn't spread that system through the other plants. In Japan the management and workers all are working together whereas the American union system created an adversarial culture between management and workers. Not only that, the whole management structure of GM was unwilling to change or adapt in order to support the Japanese system

Apparently American workers would actually purposefully sabotage vehicles to harm the company when they were upset. And America thinks it has the best workforce in the world...
GM still blames problems that they have on the corporate culture. It seems like they haven't really changed that much over the years. Changing the way such a large corporation does things seems an almost impossible task.
 

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