Originally Posted by AutoWeek

By LINDSAY CHAPPELL | AUTOMOTIVE NEWS
AutoWeek | Published 04/03/06, 2:36 pm et

At Honda, if you can build the business plan, you can build the vehicle

RAYMOND, Ohio - One of the most momentous decisions in Honda Motor Co.'s recent history - whether to sell pickups in the United States - basically was decided by two guys in a meeting room.

Gary Flint, a former General Motors engineer who left GM after having three projects canceled, boarded an airplane in Columbus, Ohio, and flew to Tokyo. There, he walked into a meeting with Honda's director for North American sales, Michiyoshi Hagino, and presented a business plan for building Honda's first U.S. pickup.

Field research
Back in 1999, the home office in Japan had asked Flint and a group of 36 engineers at its U.S. development arm, Honda R&D Americas Inc., to "learn more about" the U.S. pickup market. From their offices in Raymond, Ohio, amid a sea of cornfields, the group did as instructed. They conducted field research.

They brought together consumer focus groups in places like Texas and Montana. They studied frames. They studied cargo beds. But they also created - on their own initiative - a prototype truck in 2002.

Amazed by how well it drove, Flint and his colleagues then built another prototype.

They then put together a business plan to mass-produce the trucks. Again, this was on their own initiative.

In 2003, Flint found himself - yet again, on his own initiative - sitting with Hagino, proposing a plan that would thrust the Japanese automaker into a new product segment.

"Seven minutes into my presentation, he grabbed the paper out of my hand," Flint recalls of Hagino. "He says, 'You can stop reading now. The answer is yes.' And then he sent me home to do it."

That's how they do things at Honda.

No big committees. No bureaucracies. No layers of decision makers reviewing the decisions of the previous layer of decision makers, who in turn, reviewed the decisions handed up from the previous layer.

"We empower people to make good decisions," says Flint, who was chief engineer on the Ridgeline pickup. "If you can build the business case for something, you can pretty much run with it here."

As Flint speaks, other Honda engineers sitting around a table in Raymond nod in agreement. There is Ken Lantz, who decided how the Ridgeline's engine should perform. There is one of Honda's executive engineers, Erik Berkman, who led the development of the 2006 Honda Accord and the 2004 Acura TL.

There is Kevin Thelen, an ex-GM test engineer who was put in charge of the Ridgeline's overall performance. There is Mark Pafumi, whose ideas influenced the performance of the new Civic Si, a vehicle that the guys in the cornfield took over from Japan.

GM had layers
"At GM," Flint recalls of his previous employer, "there were several layers just between a designer and the chief engineer. There were certain things a chief engineer just would never have done. As chief engineer on the Ridgeline, I used to come in here and dust."

Honda's lean approach to product development - relying on individuals to both conceive and implement their own product ideas - does not make it faster than everyone else. Toyota Motor Corp. leads the industry in speed to market, developing new models in under 24 months. Honda's approach does not earn its vehicles billions of dollars in additional profit.

The beauty of Honda's system is best appreciated by other engineers.

"The way we do things ensures that people get their ideas across," Pafumi explains. "We're all pretty much enthusiasts here. If we think something should be changed on a vehicle, we can build the case for why it should be changed. We like to think that our mission is building a great car. If you turn enthusiasts loose on a car and give them real input, you're going to get a car that enthusiasts like."

Pafumi's ideas began to churn in 2004, when he began thinking about the 2006 Civic Si, a car that was supposed to rekindle youthful enthusiasm for the Civic.

The model had been under development in Japan, even though its largest production center is in East Liberty, Ohio, just a few miles from Raymond. But then Honda pivoted.

New product
While Japan was developing the Civic Si and the 2006 Accord - also built a short drive from Raymond, in Marysville, Ohio, - the U.S. team in Raymond was developing a new product, called the Acura RDX. The RDX will be a sport wagon, built in Marysville.

Midway through the RDX project, Honda began to think more broadly about what the model would be and what derivatives it might yield. Early in 2004, Honda swapped all three projects.

The U.S. team took over the Civic Si and the nearly finished Accord from Japan. Japan would take over the RDX from Ohio.

The Ohio team immediately pounced on the Civic. Instead of executing the car as it stood on the blueprints, Ohio engineers began putting their own fingerprints on it. They compiled a list of changes, including a redesigned suspension with a stabilizer bar, changes to the instrument panel and the additions of a spoiler, a limited slip differential, seat stitching and a power trunk release.

Make your case
Pafumi, who held the title of "assistant large project leader" on the Si, also believed it needed a more commanding engine sound and began changing its air intake and creating a resonator system. He also thought the car needed high-performance summer tires.

That decision, though, would need approval by the U.S. sales company - and specifically by Tom Elliott, American Honda Motor Co.'s executive vice president in Torrance, Calif., now retired.

"The word I got was there was no way Tom Elliott would sign off on summer tires," Pafumi recalls. "Everybody said Tom didn't like that sort of feature."

Pafumi put together a business plan for the tires and flew out to spend the day with Elliott in California.

The Ohio engineer arranged to have cars fitted with the tires waiting for the two of them at Honda's Mojave Desert proving grounds. He spent the day making his case to Elliott, demonstrating his reasoning for the tires, then drove Elliott back to his office and flew home with his approval.

"It's a flat organization here," says Pafumi, who spent his college years vying for a job at the company that built his Honda Civic.

"Anyone at any level can present a new idea to the president. Anyone who touches the car has the power to influence it."

Some people might call that chaos.

After all, large organizations have procedures and lines of reporting in order to keep well-meaning people from destroying the product.

"To some extent, it may be chaos," Pafumi reflects. "But there's always a plan. And that plan is to build the best car we can build."

Originally Posted by mayonaise

interesting........ although i find it hard to believe entirely. some of their cars are just so watered down, the american lineup is lacking a lot, and they are slow to respond to competition/new markets.

.....why doesn't someone put together a business plan for more Type-R's in the US :cry: