Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

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Thread: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

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    Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    The Detroit News
    December 10, 2019

    At a two-day gathering for Honda's suppliers in March, Chief Executive Takahiro Hachigo sounded the alarm.

    At the Hotel Higashinihon in Utsunomiya, Hachigo told them the Japanese automaker was facing a crisis after a string of costly recalls and other quality blunders and it needed to plot a new course, according to two people who attended the meeting.

    "Decades ago, localisation ... was the buzz word and our tech center independence was a key driver for innovation," said a former Honda executive who now is the head of one of its suppliers. "Those days are over."

    In the 1980s and much of the 1990s, the name Honda struck terror into the hearts of executives at the big three U.S. carmakers in Detroit because they simply couldn't match its low-cost, efficient, well-built cars.

    But after a slew of recalls since 2014 for problems with components such as airbags, sliding doors and engines, Honda's status as a benchmark for quality and efficiency has been seriously damaged - and the quality crisis is hitting profits.

    According to five Honda insiders, quality blunders have helped squeeze the operating margin at its global automotive business to 2%-3% - giving it less room for manoeuvre just as bigger rivals are building partnerships and overhauling their operations to become stronger.

    In J.D. Power's study of vehicle dependability in the United States, one of Honda's two main auto markets along with China, the Japanese brand fell to 18th place this year from 5th in 2015 and 4th in 2002, its highest ranking.

    A senior engineer described Honda's problem as "crazy complexity," where too many regional models, types, options and derivatives were "eating up our profit." Honda's 2020 Accord sedan comes in 13 versions, including three hybrids. GM's rival Malibu has only five.

    "Quality is acting up," the engineer said. "Honda has created too many regional models, in addition to an array of types, options and derivatives for its global models."

    In the United States, for example, Honda's 2020 Accord sedan comes in 13 versions, including three hybrids. GM's rival Malibu has five, though it doesn't have hybrid models. At the two-day meeting in Utsunomiya, Hachigo and his procurement managers told suppliers to help Honda slash its range of cars and dumb down model types and options. They called on suppliers to use more common parts, from engines and transmissions to door handles, rear view mirrors and even knobs and switches, according to two people who attended the meeting and slides Honda used in presentations.

    In the four years before the Takata debacle, warranty provisions ranged from 171 billion to 274 billion yen, before surging to 727 billion in the year ending March 2016.

    In 2018, for example, Honda recalled about 600,000 cars in China because sludge was collecting in the engines of six models when driven in cold weather while the sliding doors on its U.S. Odyssey minivans started opening while the vehicles were moving.








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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    In the United States, for example, Honda's 2020 Accord sedan comes in 13 versions, including three hybrids. GM's rival Malibu has five, though it doesn't have hybrid models. At the two-day meeting in Utsunomiya, Hachigo and his procurement managers told suppliers to help Honda slash its range of cars and dumb down model types and options. They called on suppliers to use more common parts, from engines and transmissions to door handles, rear view mirrors and even knobs and switches, according to two people who attended the meeting and slides Honda used in presentations.
    This is incredible.

    The can-do-no-wrong Honda Motor Company has become a 1980s version of General Motors.

    General Motors on the other hand, is on its way to becoming a 1980s version of the much admired (then) Honda Motor Company. Anyone who questions this statement should take a look at the new Tahoe & Suburban.









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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Blaming parts suppliers for poor quality is a cheap excuse that Honda should not learn from GM. You get what you pay for and if any manufacturer looks at lower cost parts at lower specs, you get quality problems.

    The use of common parts also brings out rebadging: a downfall to GM in the 80's and 90's. Not to mention a recall will effect 100's of thousands of models that use a common part.

    Acura has done well with sporty/luxury versions of Honda products. I'm sure many parts are already reused for the engine and electrical.

    Quality testing and high tolerance requirements makes for a better product, not dumbing down the design.

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Mercedes is also finally realizing their crazy number of model derivatives. Customer choice is good but it's going to eventually catch up with the company.
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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    One thing Honda can't do that GM can....blame it on the union.

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by joey View Post
    Acura has done well with sporty/luxury versions of Honda products.
    Acura did that better 20 years ago than they do now. Their lineup of sedans (ILX, TLX, RLX) doesn't compete well with other luxury brands, or even the Honda branded counterparts.

    NSX is a nice halo vehicle for the brand, though.
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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by gkr778 View Post
    Acura did that better 20 years ago than they do now. Their lineup of sedans (ILX, TLX, RLX) doesn't compete well with other luxury brands, or even the Honda branded counterparts.

    NSX is a nice halo vehicle for the brand, though.
    I do wonder if their approach with Acura is hurting the mainstream Honda brand in a way. Being Acura is more near-luxury vs. actual luxury and it seems mainstream brands can now cover near-luxury, is Acura taking away some goodies and fun stuff from Honda in order to differentiate themselves from one another? Not sure if I explained my meaning very well...

    It is hard to believe Honda has sunk so low in the rankings, yet they have. The interesting part is they are still perceived as grade A Japanese quality - perceptions take a long time to change. People still stay away from domestics even though they are much better now (excluding FCA) and flock to Honda even though they've tanked.....

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    I think Honda is having an identity crisis, they don't know what they want to be anymore.
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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by CJH View Post
    I think Honda is having an identity crisis, they don't know what they want to be anymore.
    Makes sense, Honda is a company founded on fun, sporty cars and the market has shifted to the opposite - roomy, comfortable, not-fun CUV's.

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by BlackGTP View Post
    It is hard to believe Honda has sunk so low in the rankings, yet they have. The interesting part is they are still perceived as grade A Japanese quality - perceptions take a long time to change.
    +1
    At the same time, consumer perception (positive or negative) can only last so long if that perception deviates from reality. If Mr. Hachigo doesn't solve the quality and manufacturing complexity issues at Honda, some of the goodwill the company built up over several decades may be lost.
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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by gkr778 View Post
    +1
    At the same time, consumer perception (positive or negative) can only last so long if that perception deviates from reality. If Mr. Hachigo doesn't solve the quality and manufacturing complexity issues at Honda, some of the goodwill the company built up over several decades may be lost.
    GM is a great example! Used to have a sterling reputation and it took them a long time to squander that reputation and it appears it will take an even longer time to redeem themselves.

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by BlackGTP View Post
    Makes sense, Honda is a company founded on fun, sporty cars and the market has shifted to the opposite - roomy, comfortable, not-fun CUV's.
    I wonder if the first seeds of Honda's identity crisis might be related to the dropping of the Prelude and the introduction of the Element aka Excrement aka Ugliyment?

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by Stéphane Dumas View Post
    I wonder if the first seeds of Honda's identity crisis might be related to the dropping of the Prelude and the introduction of the Element aka Excrement aka Ugliyment?
    Could be. I wonder what Honda's demographics are. Obviously they still do very well in the USA, but who is buying them? Used to be a young persons car company, a lot of youth buying Civics, etc.. Used to be you couldn't swing a stick without hitting a Civic, now I don't see them very often. I wonder if Honda's customer base is aging as they've become confused what to do. Seems like sporty is kind of easy to do (evidence is GM - sport is the one thing they do very well and fall down everywhere else), without that easy target to hit ".90 g's on the skidpad" do they not know what to do?

    Though to be fair, I get the general sense that a lot of the manufacturers are not sure what the 20 something age group wants.

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Quote Originally Posted by Perian View Post
    This is incredible.

    The can-do-no-wrong Honda Motor Company has become a 1980s version of General Motors.

    General Motors on the other hand, is on its way to becoming a 1980s version of the much admired (then) Honda Motor Company. Anyone who questions this statement should take a look at the new Tahoe & Suburban.









    .
    I don't see ANYTHING about the NEW Tahoe/Suburban that has ANYTHING to do with 1980's Honda
    the TAHOE has 7 versions in itself + a similar number for GMC's version + a few more for the CADDY version and EVERY VERSION has unique interiors AND front/rear ends

    IMHO the 80's Suburban was a LOT like Honda is referencing ONE basic component set for EVERY VERSION front / rear same outside of badging across truck AND SUV versions identical interior across all versions
    BUT that was the REBADGE-ARAMA era

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    Re: Honda CEO Tells Of Quality "Crisis"; Engineer Blames "Crazy Complexity"

    Somewhat ironically, a Honda ad 40 years ago had the answer that Honda as a company needs today.

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