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A Sense of Asia

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The Man and His Machines

Sol Sanders

 

Illustrated

Little, Brown and Company - Boston - Toronto

COPYRIGHT © 1975 BY sor, SANDERS

ALL RIGHTS RESERVED. NO PART OF THIS BOOK MAY BE REPRODUCED

IN ANY FORM OR BY ANY ELECTRONIC OR MECHANICAL MEANS IN-

CLUDING INFORMATION STORAGE AND RETRIEVAL SYSTEMS VVITIIOUT

PERBIISSION IN WRITING FROM THE PUBLISHER, EXCEPT BY A REVIEWER
\VIIO MAY QUOTE BRIEF PASSAGES IN A REVIEW.

FIRST EDITION

T 11/7;

LIBRARY OF CONGRESS CATALOGING IN PUBLICATION DATA
Sanders. Sol W

Honda
xv Honda, Sfiichirfi, 1906— 2. Honda motorcycle.
TLI40-H563247 338.7’62’922750924 EB] 7546235

ISBN 0-316-77007—8

K66

TL/C/O
IHS‘éS‘2L/7

CW;

Designed by D. Christine Benders

Published simultaneously in Canada
by Little, Brown 6 Company (Canada) Limited

PRINTED IN THE UNITED STATES OF ABIERICA

To the free spirits in all cultures that
Soichiro Honda typifies.

 

Acknowledgments

 

 

The author wishes to thank Mr. Hidezo Inaba, without whose
intercession the book could not have been written and whose long
hours of patient explanation over twenty years have so heavily con-
tributed to whatever understanding he has of Iapanese life, Thanks
also go to Mrs. Kaji Onose, Mr. Haruyasu Nakayama, and Mr.
Akira Ishikawa, who labored over translations and suggestions but
who bear no responsibility for mistakes in interpretation or fact.

        

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Contents

 

 

Preface
A Man Behind the Machine
Growing Up in Chnbu

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Tokyo and Maturity

Return of the Native

Honda and the \Var

Honda and His Dream
Toward a Special Role

A Mass Market

Changing an American Image

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Racing to Research
On Four W hccls
Meeting \Vorld Standards

New Problems Begging New Solutions

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14 Ilondaism

15 Honda’s Prospects: A Japan Microcosm
16 On the Road to Multinationalism

17 Taishoku

Appendix I: Chronology of the Life of Soichiro
Honda

Appendix II: American Honda Products

xiii

12

203
206

 

 

 

Preface

A MYSTERY IIAS TROUBLED almost all Western observers of
twentieth-century Japan: How could a country of such literal-
minded, totally group-oriented and self—effaeing individuals have
created such a dynamic and enterprising society? When one speaks
of the three thousand years of Chinese history, of the Indian
genius for metaphysics, one returns to the fact that only Japan of
all the major Asian cultures has moved into the modern industrial
world. In a time of the questioning of values of the industrial socie—
ties, that, too, may be questioned or even decried in some more
romantic circles. But one has only to wander through the starving
villages of Biliar in India or those of central Java in Indonesia to
appreciate what that industrialization has meant for the Japanese.

HONDA: THE MAN AND HIS MACHINES XVl

and folkways, makes the point that the innovating Japanese com—
panies—like Honda, the electronics-maker Sony, the camera—
maker Yashica and a few others—are at the outer rim of the
business world. And to this metaphor Masaru Ibuka, chairman of
the board of Sony, has added that to move forward a wheel must
have torque, and it is the intense and brutal Japanese competition
among the companies that produces it.

The story of Honda, the individual, a rags—to-riches adventure
story with humor and with such a large element of luck—which
Honda himself would be the first to acknowledge~is a story of
one of the Japanese mavericks. It is also in a broader way the
story of virtually the whole period of modernization of Japan.
Honda grew up in a subsistence economy where the problems of
food and clothing were all-critical. The industrial empire he
founded is now devoting a large part of its time to considering
the problems of pollution and energy conservation, among the
most sophisticated of the concerns of the industrial societies. Across
these sixty—odd years and from one basic socioeconomic concern
to the other Iapan has come a long, long way. And it has been a
tortuous trail that led through early enormous and seemingly un-
limited expansion; the great depression; the most important of the
modern military coup d'états; the greatest military misadventure
since Napoleon set out for Moscow —— the China campaign of the
late 1930s; World War II and the first and so far only nuclear
holocaust that destroyed two of her cities; foreign occupation; and
the remarkable “economic miracle” that produced her postwar
prosperity.

Honda has lived and worked through all that along with the
lapanese people. The story of his life and times is then, as much
as anything else, the story of his remarkable people and their
unique ethic.

HONDA

 

 

1

 

 

A Man Behind
the Machine

 

THERE’S AN OLD ANECDOTE, perhaps apocryphal, among Honda
company executives in the United States and their distributors
that has a ring of truth about it. It’s about a mother who comes
into a Honda dealer’s showroom with her young son to look at
the motorbikes. In the end, she orders a motorcycle, telling the
clerk in a confidential aside that she “hadn’t wanted to buy one of
those [apunese machines” in a competitor’s store

For although Honda is a trademark and a name with worldwide
recognition such as perhaps only a few other brand names have,
there are relatively few people who know that there is a man
named Honda who very much dominates the history of the

HONDA: THE MAN AND HIS ZylACHINES 4

company and its products. And although Honda is almost like
Smith in the Japanese list of family names, in America it is very
often not even recognized as Japanese.

Soichiro Honda is about as ordinary a Japanese as you can
imagine, at least in appearance. If you were to see him got up in
ill-fitting Western clothing, following a guide with a flag in one of
those endless parties of Japanese tourists in Hong Kong, Honolulu,
or Rome, he wouldn’t stand out at all. There is no reason that he
should.

At sixty—seven, his hair is a bit wispy, his figure relatively trim
from the heavy golf schedule he plays and his almost constant
nervous activity, particularly now that he has retired from day-to-
day duties with the company. Like his generation of pre—World
\Var II Japanese, his legs are short and bowed and his torso dis-
proportionately long. (Since the war, better food and exercise and
sitting on chairs instead of wrapping their legs beneath them on
tatami have proved that a good deal of what was thought to be
the distinctive genetic physical characteristics of the Japanese was
actually environmental. Today young Japanese teenagers are long’
legged and taller.)

If you meet the “original” Honda, even in the somewhat flashy
offices of the Honda Motor Corporation in downtown Tokyo,
dressed in clothes that tend more to a Miami sports look than the
usual Japanese executive’s black suits and white shirts, he is a
pleasant, elderly gentleman, his face always ready to break into a
smile, with an impish, boyish grin about it. He looks far younger
than his years, even younger than the usual youthfulness most
Westerners see in the Japanese face.

It takes a while for a stranger to get him into conversation which
reveals “the fire in his belly.” What can draw it out is talk of
machines—almost any kind of machine. For what does distin-
guish Honda from his contemporaries is his inventiveness with and
his passion for motors. Honda likes to talk. He is extremely gre-
garious, a famous partygoer and party giver, even in Japan where

A hIAN BEHIND THE hIACHINE S

partying for business is a large part of the life of every Japanese
businessman. \Vhen he talks, he often thrusts his fists down into
his jacket pockets (a common gesture of Japanese men which is
death to a Western suit’s creases and must be some kind of “race
memory" going back to the days more than a century ago when
everyone wore kimono and thrust his hands into the wide bands
of his obi, or sash). Honda wrestles with himself, twisting his jacket
from side to side, trying to get the words out that seem to be
falling behind his thinking. Like a lot of gifted mechanics and
industrial geniuses, he doesn’t always get easily into words the
deep-seated and profound attitudes he has about life and the
problems of modern industrial society.

In fact, there is a streak of Honda’s personality that closely
resembles the old-fashioned American character, a kind of Poor
Richard. He is full of homegrown philosophy, palliatives for the
everyday problems of people. A manager at the Hamamatsu plant
recalls that Honda used to turn up there once every two months
or so to get a general view of what was happening and to mix with
the employees, many of whose senior stat-f he has known intimately
over the years. He would put on the spotless white uniforms that
are worn by everyone in the Honda plants—and which give a
feeling of egalitarianism typical of Honda's View of what modern
industry should be but also appealing to a deep feeling for equity
in Japan’s otherwise castebound society.

“He seldom leaves without making some useful comments,” the
plant manager says. \Vhat does he say? “Well, for one thing, he
frequently talks about the differences between Japanese and other
peoples, about the way Japanese think and foreigners think, and
their different attitudes toward life. He says that it is important to
know these differences.” But Honda doesn’t just dwell on the
problems of philosophy and intellectual approach. He often reminds
his workers that he has seen Japanese abroad “making a nuisance
of themselves when traveling” and warns that they must not do
that. He’s been known to give a short lecture on table manners,

HONDA: THE BIAN AND HIS hIACIIINES 6

that it’s important for any of his junior executives going abroad to
know how to handle a knife and fork and not embarrass themselves
and others by trying to handle them like the Japanese chopsticks.

Honda’s thoughts are often controversial in terms of Japanese
attitudes, which require so much conformity from members of the
society. They would be less odd in an American or even a European
society where individuality is at least fashionable if not always
rewarded. I-Iis I-Iamamatsu—ben, the dialect of the area where he
grew up and which he has turned into the Motorcycle Capital of
the World through his own success and those of the companies
that have copied him, is often difficult even for the new generation
of Japanese executives around him who speak a more homogenized
Tokyo national dialect. And his straightforwardness sometimes
embarrasses them, too, for his simple, direct approach to many
problems, however refreshing, is not the usual successful Japanese
executive’s approach.

One can’t help thinking that it is very appropriate that Honda’s
name and efforts have gone to motorcycles in large measure. For if
there is something to the motorbike rider’s feeling of freedom and
a special sort of being fully charged with one’s destiny when on a
bike—a kind of spirit that the French writer Saint—Exupéry de-
scribed in flying an airplane—it’s right that Honda should be
associated with it. For he is, again, very much that rare thing in
the Japanese environment, a free spirit.

Yet through his imagination, his ability to work as a member of
a team, his dogged persistence, Honda exemplifies the Japanese
élan. Despite all the ways that he is different, he personifies the
nature of the Japanese success of the past twenty—five years, the
comeback from the very edge of total destruction to a remarkably
physically rebuilt society. At the same time enjoying a prosperity
and freedom never equaled in its history, Japan has, to some extent
at least, made a successful effort to come to grips with the prob-
lems of modern industrial life. Honda has not only built a vast
personal fortune, something he is extremely reluctant to talk about,

A XIAN BEHIND THE NIACHINE 7

and a very successful international company, but he has also built
an industry. Total annual sales of the motorcycle industry, with its
assorted supplementary products, in the United States alone are
now reaching the $3 billion mark And there is no one in the in-
dustry, in Iapan or the United States, who does not acknowledge
that that prosperity and growth would not have been possible with—
out Honda’s genius and leadership.

More recently Honda has moved into automobiles and promises
with some imaginative and original engineering to effect, at least
on some small scale, changes in that product and industry too that
may have worldwide impact. Honda’s stratified charge engine
which he calls CVCC, with its low pollution and high gasoline
economy, may or may not dominate the whole new range of inno—
vations that are going to be necessary to meet the growing erisis
brought on by pollution and the higher cost of fossil fuels around
the world. But the very fact that this relatively small company has
grabbed onto the problem and come up with temporary solutions
in the face of much less imagination in Detroit and Europe is
indicative of the nature of what Honda stands for in Japanese life
and in world industry as a whole.

At least one of Honda’s intimates believes that among the factors
which dictated his decision to retire from direct leadership of the
company in a phased withdrawal over the past few years was his
belief that the technological demands of the new products were
beyond him. Even at sixty-seven, his retirement in 1973 was
unusual, for in most Japanese firms—particularly those which
have been dominated by one man—the boss hangs on intermi/
nably. One of the sharp contrasts between Japan’s business world
and the \Vest’s in the 19605 and 19703 has been the large number
of men in their late seventies and eighties still in positions of
command.

Yet Honda’s personality and physical presence played a large
role in the breakthrough of the Honda engineers in the develop—
ment of a low-pollution, higheffieiency engine which may put the

HONDA: THE MAN AND HIS MACHINES 8

company into an entirely new category of world business. The
young engineers who worked in the “task force” that developed
the engine reported that the old man appeared at the research
laboratory in the Tokyo suburbs almost daily when the project
was launched. “He worked as one of the researchers; whenever we
encountered a problem he studied it along with us. He took part
in the discussion._IIe loses his temper quickly over small things,
but he was very patient when it was a big problem or a technical
puzzle we couldn’t solve.”

The young engineer concluded: “He is a company president who
is not like a company president at all. When we say that he works
with his employees as one of them, we don’t mean it is just that
he wears the same uniform as the others and that he acts ‘chummy.’
We aren’t referring to superficial matters. Instead what we mean is
that we find Soichiro—san the kind of person with whom we can
have an ‘on-the—same—level dialogue.’ ” Again, one must put this in
the Japanese context, where many cultural anthropologists have
postulated that Japanese society virtually forbids this kind of inti-
macy and demands almost always that two people have a relation-
ship of defined hierarchy with rigidly protocoled responsibilities.

Honda’s story is very much the tale of Japanese industry in the
past fifty years. Like most Japanese industries, the motorcycle and
automobile industries borrowed heavily from Western technology.
In the 1950s, there was virtually no Japanese motorcar industry in
US. or European terms. But by the 19705, Japan was the No. 2
manufacturer in the world. Honda’s machines, like so many other
mass-produced Japanese products of the past twenty years, have had
a revolutionary impact on world society that is difficult to gauge
but is obviously enormous. It’s possible to estimate the cost, the
markets, the retail outlets, etc., of Japanese transistor radios. But
their social and psychological impact on world society is far wider.
Anyone who has seen them in the hands of American teenagers on
the deck of a swimming pool in Los Angeles or strapped to the

A MAN BEHIND THE MACHINE 9

back of a wheat farmer in a Punjabi field in northern India real-
izes that their sociological impact is incaleulable. Or take the Japav
nese automatic rice cooker. Some Japanese feminists have argued,
only half jokingly, that it has done more toward liberating the
Iapanese female than all the social legislation and agitation over
the last generation simply because it has freed the woman from
standing long hours twice a day over the stove. Japanese cameras,
leapfrogging over the German experience, have made photographs
and their impact available to a far wider group of people than
perhaps any other postwar product.

In the developed countries, Honda's two—wheelers have appealed
mainly to the leisure market. They took hold of the old and nar-
row market of the motorcyclists, made it respectable, and expanded
it to a size that no one — with perhaps the exception of one man,
Soichiro Honda — ever thought possible. But in other areas of the
world—in Southeast Asia, in Latin America, and in the Middle
East and Africa—the Honda motorbikes and their millions of
imitators have opened up a new world for millions with cheap
individual transportation. And it may well be as both Honda and
his closest collaborator, Takeo Fujisawa, believe, that the real
import of the company and the ideals they have sought to instill
into it is yet to come.

In the spring of 1974, Soichiro Honda—a man who managed
to escape formal education more than most members of his genera—
tion and who has had a great deal of scorn for “book-learning" —
was given an honorary doctorate by Michigan Technological Uni-
versity. (A year earlier the Icsuit Sophia University in Tokyo had
also so honored him.) Honda talked simply and sincerely to his
“fellow graduates” on the occasion of the honor:

“The first thing that I would like to touch on is that technology
is a tool to serve mankind. It is always man who plays the principal
role in the development and progress of society and technology and
its by—products created by men are nothing more than the means

HONDA: THE THAN AND HIS MACHINES 10

and the tools for achieving a better life for men. It is a matter for
regret that some people today mistake the means for the end and
have the wrong idea that scientific technology itself is their goal.

“The second subject I would like to talk about is the pioneer
spirit. By ‘pioneer spirit,’ I mean progress achieved through one’s
own thinking and creativity on the basis of many things accumu-
lated in the past.

“Many people dream of and hope for success. To me, success
can be achieved only through repeated failure and introspection.
In fact, success represents one percent of your work which results
only from the ninety—nine percent that is called failure. I believe
your final success can only be achieved if you face challenges with
this kind of pioneer spirit and repeatedly use the three tools of
failure, introspection and courage.

“. . . I wish to emphasize . . . that the solution to any problem
should be sought at its very root. As an example, I would like to
touch on the air pollution problem. Pollution of the air through
automotive exhaust emissions has become an increasingly serious
problem not only in the United States but throughout the world.

“We tackled the problem of how to clean exhaust gases within
the engine itself. This is because we thought that a basic solution
could be achieved only if the exhaust gases were clean as they came
out of the engine. We endeavored to change the combustion pro-
cess itself, and successfully developed what we call the compound
vortex—controlled combustion, or CVCC engine system. It has been
established by the US. Environmental Protection Agency that
this system can meet the stringent emission standards originally
set forth in the Clean Air Act without the use of such aftertreat-
rnent devices as catalytic converters. This, I believe, is a success
which could not have been achieved without a philosophy of seek-
ing the solution to the problem at its very root.

“Lastly, I would like to speak on harmony among men. In to-
day’s modern civilization, where science and technology are making

 

Honda receiving an honorary degree from Michigan 'l‘echnological Univcrmty.

rapid progress in every field, we often observe a tendency to think
that the machine has priority oyer humanity, or that science is
omnipotent. l thinl;y however, that such thinking is not only yery
dangerous but fundamentally wrong.

“No matter how much progress and deyelopment is made in
science and technology or social structure, it must not be forgotten
that it is men who operate them. And this cannot he done by one
person alone. It takes a heartito-heart unity of purpose of many
people if they are to become ‘masters’ who effectively operate
machines and social structures and thus contribute to mankind. It
is with this thought in mind that I tell young employees of my

7

company: ‘Don’t be used by the machine, use the machine.’ ’

N011.V){odm).) anion VUNOH

 

 

2

 

 

Growing Up in Chubu

JAPAN OVER THE LAST five hundred years has seen an almost con—
tinual struggle and in the best of times a balance between the two
great population centers of the main island of Honshu. To the
north and east was the great Kanto Plain around Tokyo. In the
early centuries it was the frontier against the non-Iapanese bar-
barians who were pushed northward and eventually decimated or
assimilated except for the “Hairy Ainu” remnants now remaining
on the northernmost island of Hokkaido. T 0 the south and west
was the Kansai Plain stretching out before Kyoto and Nara, the
former highly stylized imperial capitals of the country echoing'
elements of imported Chinese culture.

GROVVINC UP IN CIIUBU 13

Slightly to the south of both of these lies the area called Chubu,
an in-between land of a milder climate— from its being sur-
rounded on three sides by the sea —— and with a people famous for
their fiery temper but a region less given to the dramatic events
of the two major centers of population.

Nestled into the friendly hills, with their carefully plucked,
rounded Japanese tea bushes (which in more recent times protect
the huge, delicious strawberries that grow in rows between them),
was the village of Kornyo. Today, Hamamatsu (literally, “beach
pine tree”), the largest city of the province Shizuoka, is a roaring
industrial town and has long since incorporated Honda’s birth—
place in its suburbs. Much of the countryside Honda knew as a
child, like so much of the once lovely Japanese countryside else,
where on the main island of Honshu, has become a part of Hama—
matsu’s urban sprawl. But sixty-eight years ago, when a young
blacksmith and bicycle mender, Cihei Honda, welcomed his first
son into the world, the village was remote. The Tenryu River, now
nondescript with its ernbankmcnts straightened against flash floods
that come down from the nearby mountains, wound through the
hills and the plain. Its many pools teemed in a delicious fish, a
kind of trout the Japanese call ayu.

On the wooded hills behind the Honda house, which stood at
the edge of the village, was a shrine to the Japanese shinto goddess
of fire. Pilgrims came wending their way by the house to the
shrine—as Honda Company forge workers from the home plant
in Hamarnatsu still do once a year even today. Life was relatively
simple. The village worked from dawn to dusk, for it was not until
later that electric lighting came to the town. In fact, the installa-
tion of that lighting is one of Honda’s earliest memories:

“I was terribly impressed by the sight of electricians swaggering
with their cutting pliers and screwdrivers around their hips, hang-
ing onto electric poles to work on wires. 'l'hey cut a dashing figure
of heroes in my eyes. I was so fascinated that I could not forget

HONDA: 'I'HE LIAN AND HIS LIACHINES l4

them. After I returned home, I got on the shoulders of my old
grandfather who was sitting by the old-fashioned Japanese open
hearth and cheered, shouting and twisting his scant gray hair,
yelling, ‘I am an electrician.’ ”

Life was also hard. Of the nine Honda children, only four
reached maturity, the others dying from various childhood diseases
and the lack of modern medicine and sanitation. A schoolmate of
Honda’s remembers that they wore the traditional peasants’ shoes
with soles made of rice straw. They are extremely picturesque and
attractive when on display in the fancy folkcraft stores along the
Cinza today, But the mothers had to mend the shoes almost every
night so they could be worn by the hard-charging young students
in the morning. Even much later when Honda and his friends
were twenty-one and they turned up for a physical examination to
go into the military, only Honda wore Western clothes brought
down from Tokyo. The rest still wore the traditional Japanese
robes. Although meat eating had become widely accepted after
Japan opened to the West in the middle of the nineteenth century
and the Buddhist prohibition against the slaughter of animals was
laid to rest—the poor had always been meat eaters by necessity
when it was available—the villagers of Komyo saw little of it.
Food was plentiful, but it was almost exclusively rice from nearby
fields and the fish caught in the river, their cooking oil from the
beautiful yellow—flowered, pastel green mustard plant that once
lent such color to the Japanese countryside in spring and summer.

“We were very poor,” Honda says about these childhood days.
“I constantly had a cold, and a running nose. Dried-up snivel on
my sleeve bands [of the kimono] made them stiff as synthetic resin
where I wiped my nose. A neighboring family was very well—to-do
and every year at the time of the Boys’ Festival [May 5], when
images of the medieval warriors of Japan are on display in tradi-
tional houses and in public places, I yearned to see them. But I
was always chased away by the boy next door with some comment
like ‘a dirty boy like you cannot come in.’ To this day, I have not

CRO\VINC UP IN CHUBU 15

forgotten how miserable I felt then. \Vhy do people discriminate
against one another for reasons of wealth, I used to wonder?"

Honda’s father was a blacksmith and he grew up with the sounds
of the anvil. His father was an enterprising man; a generation be—
fore they had been only small farmers and it was he who started
up the Smithy as he was later to start a bicycle shop, even going on
to become a promoter of bicycle racing. One of the younger Honda
brothers describes his father as a man “who always wanted things
straight,” who attempted to establish logic in the smallest things,
sometimes to the consternation of his neighbors. 'Ihe son remem—
bers that his father immediately adopted the Western cigarette
holder the first time he saw it, replacing the small, crooked, pipe-
like holder that the Japanese had used traditionally. It was a small
thing, of course, but enough to attract the neighbors’ attention
and to make an impression on his son. Perhaps young Honda in—
herited his stubborn resolve to get logically at the root of things,
to do it his way, from his father. Certainly the father's mechanical
abilities were passed on to Soichiro, the eldest son. (The suffix
—ichi is the Japanese ordinal for “one"; thus, traditionally, the
eldest son’s given name is a combination of a word—often a
Chinese character for quality traits or valuable objects — and
ichiro. The second son has the suffix -firo, or second, and so on as
families and sons grow.)

“Even before I started school, I was fond of fumbling with ma»
ehinery and was interested in engines," Honda says. “'l‘here was
a rice-polishing mill about four kilometers from my house, and at
the mill was a motor, a rare object in those days. I was often taken
there on my grandfather’s back, and I found the sounds of the
motor and the blue smoke with its peculiar smell of oil fascinating.
About another kilometer away from the rice mill was a lumber-
yard where saws made their loud whirring sound and I loved to
watch them in motion. From those days, I have always had a sense
of exhilaration just to look at and listen to motors and engines."

Soichiro helped his father in the smithy, even before his school—

 

Honda’s father, Gihci Honda‘

VGNOH ()IIYHOIOS JO Asaunon

Honda (left) (15' a mung student in I’Ianunmztsu.

 

HONDA: 'I'IIE hIAN AND HIS BIACIIINES 18

days began. He enjoyed making unidentifiable shapes from bend—
ing the metal that came out of the forge. And he was given small
jobs of helping to repair fann implements, which was his father’s
main business. But school was another matter. Honda’s old school-
teacher, recalling those days at ninety-eight, was very oblique in
the Japanese way talking about young Honda and his school rec-
ord. But it is pretty clear it was not very good. Asked what the
students were taught, the old teacher replied that it was the Im—
perial Rescript, the ode to universal education which was repeated
every morning in pre—World War II schoolrooms much as the old
Pledge of Allegiance to the US. flag used to be repeated in Amer-
ican schools. But it was clearly an authoritarian document written
when the Japanese restored their emperor to power in the mid-
1860s. It urged more than anything else unquestioning loyalty and
obedience to the emperor as the god-king symbol of the state.

“I was hopeless as far as examinations were concerned," Honda
recalls of his schooldays. “I did not like reading and writing—
because I found writing things down very troublesome. I hated
calligraphy [writing Japanese versions of the old Chinese charac—
ters which are used in the Japanese language as well] and compo—
sition classes. I often skipped these classes, went up to a hill
behind the school, and stretched out on my back and watched the
sky. It’s much the same with me even now; I can understand
things much more ‘efficiently’ through my ears and eyes, watching
TV shows, for example, while what I read in books does not go
down well with me.”

But when Honda reached the Japanese fifth and sixth years, his
interest in scientific subjects was titillatecl. Batteries, scales, test
tubes, and other machinery began appearing even in those early
years in Japanese science courses. Honda understood these things
well, and could easily answer his teachers’ questions about them.

Earlier Honda had seen his first automobile. “Forgetting about
everything else, I went running after the car. It was a calash-topped

GROWING UP IN CHUBU 19

sedan of those days, and it was staggering along the narrow village
street. I caught up with it for a while and hung onto its rear. I was
deeply stirred. That was my first encounter with any kind of motor
vehicle. When the car stopped, oil dripped down to the ground
under it. I was literally intoxicated by the smell of that oil. I put
my nose down to the ground and took deep breaths of the smell.
I must have looked like a dog, bent over sniffing the oil. 'Ihen I
rubbed it over my hands and arms. I think it was from that mo-
ment, even though I was a mere child, that the idea originated I
would one day build a car myself. After this time, cars began to
come to the village more often. And every time I heard that there
was one on the street, I would run down to see it after school with
much of the same exhilaration. I raced after it, even if sometimes
I was encumbered by my little sister whom I was carrying on my
back in the old—fashioned Japanese way.”

In the autumn of 1914, when young Honda was a second-grader,
he heard that an airplane was coming to the infantry regiment
stationed at the nearby small city of Hamamatsu. He had seen
pictures of airplanes but had never actually seen one. To go to
see it became a total obsession. The problem was that the army
installation was twenty kilometers away and he was sure that he
would never be given permission to go, no matter how much he
pleaded with his father. Two days before the airplane was sched-
uled to arrive, young Honda stole two sen—there were about
four hundred sen to an American dollar in pre—VVorld War II
Japanese currency— as his “war chest” and began to make plans.
On the day the plane was to arrive, he took his father’s bicycle
and, with what he calls as innocent an expression as he could
muster, pedaled away to Hamamatsu. The bicycle, an adult’s
model, was so much larger than Honda that he had to put one leg
through the crossbars and ride it askew, for he couldn’t raise his
buttocks to the seat. But somehow or other he made it to the regi-
mental parade grounds where the demonstration was to be held.

HONDA: 'I'HE LIAN AND HIS RIACHINES 20

“I could hardly contain myself, my ears were pounding as the
regimental headquarters came into sight. My joy, however, was
short-lived. The parade ground was surrounded by fences and
there was a ten—sen -——if I remember correctly—entrance charge.
I stood there in utter misery. Then I noticed a pine tree nearby,
and I climbed up into it. Afraid that I might attract attention and
be pulled down, I broke off some of the branches and hid behind
them.”

Young Honda saw the airplane, even if at a distance. He was
fascinated with the pilot, one Niles Smith, who wore a hunting
cap complete with a pair of aviation goggles, the brim of the cap
turned jauntily to the rear. When Honda returned home, he ex—
pected his father to bawl him out for the escapade. But although
the father was angry at first, his second reaction was to express
surprise and envy that the youngster had actually seen an airplane
and to sit him down, asking him for a minute and lengthy descrip
tion. Later, Soichiro talked his father into' giving him his hunting
cap. He made a pair of aviation goggles out of a piece of cardboard
and put bamboo “propellers” on the front of the bicycle; he was
the terror of the village for a month, racing about impersonating
the illustrious “Niles Smith.”

If schooldays were a bore inside the school because of his lack
of interest in formal learning, young Honda made up for it with
his career as the Peck’s bad boy of the village.

“There was a watermelon field on the hill back of my primary
school and I often sneaked into it. My strategy was to bore a small
hole in the top of a melon, eat out the inside, then lay the melon
back upside down to conceal my theft and dash back to the school.
Sometimes I would be caught by the school principal and thrashed.”

One day, annoyed that he was hungry and it was not yet lunch-
time, young Honda went to the small temple called Seikai near the
school. He climbed into the sanctum and beat the huge temple
drum, the signal for the noon hour, about the only way the vil-
lagers had to keep time. That day, lunchtime was moved up at the

CROV‘VINC UP IN CHUBU 21

school and in every household in the village. Honda calmly hurried
home and had his lunch, too, only to be found out later and
scolded by all his elders. Later, taking a leaf from Torn Sawyer's
book, he painted a goldfish —one of the century—old carp kept in
the school pond — with green enamel. One of his earliest memo-
ries is the time he did not like the shape of the nose of the
Buddhist deity Jizo, the patron of children, which the neighboring
village stonccutter was fitting into place at the school. Honda
wanted to chop off part of the nose. His “correction” went awry
and he ended up chopping the whole nose off the statue. Some of
these experiences were more significant than they seemed at the
time, however, and had much to do with making Honda into the
unorthodox type that has so often puzzled the staid and conven—
tional Japanese world. He tells this story:

“When I was a third- or fourth-grader, my mother dressed me
up in a kimono and a new blue sash to attend the ceremony of the
school commissioner for the emperor’s birthday. I went to school
feeling elated that for once I was wearing a clean and attractive
kimono, even though I had had to borrow my mother's sash. [One
of the peculiarities of Japanese traditional dress, it should be noted,
is that even with a relatively cheap, cotton, sunnner yukata, a
Japanese man is expected to wear an extremely delicate, hand—
woven and expensive obi] Classmates soon found out the secret
and teased me, saying, Hey! that’s a woman's sash!’ I went home
crying. The incident started me thinking about colors. It’s because
of this that today I often wear a red shirt I dress as I like. It’s not
fair that there should be a distinction between colors for men and
women. People’s personal preferences should be recognized so long
as one does not make others feel unpleasant or cause trouble to
others. One should be free to wear clothes of any color he chooses.
It’s particularly necessary to an artist or an inventor, for without
the courage and determination based on this belief, a person cannot
create good designs.”

In the Western world of the 19703, with unisex fashions and an

HONDA: THE MAN AND HIS MACHINES 22

almost aggressive attempt to dress “differently,” this kind of state-
ment from a respected member of the Iapanese business commu—
nity may not seem controversial. But in a Iapan where white shirts
were de rigeur for all businessmen — even the smart young Tokyo
executives —until well into the late 19603 and where even today
most men dress in traditional black and white, it is not only con-
troversial, but it is also an expression of a dissent on small matters
that is almost wholly out of keeping with the Japanese way.

Honda was sent on to higher elementary school in nearby Futa-
mata. By the time he had completed the school—for a total of
only ten years of formal schooling—his father’s blacksmith shop
had been transformed into a bicycle shop, again an important ele-
ment in guiding his career for the future. Honda helped in the
repair work of the shop and read with fascination a trade magazine
that came to his father, The World of Wheels. Scanning the mag—
azine one day, he came across an advertisement for “Help Wanted”
by 3 Tokyo automobile repair shop called Arto Shokai (Artistic
Commercial Company).

“My only dream for months had been to work for an automobile
repair shop,” Honda remembers. “Besides, the name Arto Shokai
struck me as nice, high—toned. So I wasted no time writing them
to apply for the job. ‘You are hired, so come up to Tokyo at once’
came back the reply. My father was not very keen on letting me,
the eldest son and a notorious truant, go away to Tokyo at such
a young age. But I finally managed to convince him. So, on gradu-
ation from elementary school in the spring of 1922, I took my
meager belongings, wrapped my ‘valuables’ in a furoshiki [a color-
ful piece of Japanese cloth used exclusively for tying up bundles
or gifts] and went off to seek my fortune in the big city.”

3

 

 

Tokyo and Maturity

IT IS VIR’I‘UALLY IMPOSSIBLE to reconstruct in the mind’s eye the
Tokyo of 1922 on the basis of the Tokyo we know today—the
world’s largest city, a megalopolis bustling, noisy, dirty, totally
commercial and seemingly “Western.” Even in its days as Edo, the
eastern capital of the warrior dictators of the shlogumzte (the hered—
itary Japanese military dictatorship that ruled the country before
1860 under the puppet leadership of the emperor—god away to the
West in aesthetic Kyoto), Tokyo was always a city of strength and
vigor. As early as the eighteenth century it rivaled cities in the
West in size. But it had grown up as a collection of villages, with—
out plan or order, and with none of the attempts at design that
marked the Chinese-style capitals in western Iapan.

IIONDAZ 'I'IIIC hIAN AND HIS BIACHINES 24

In 1922, it was the tinle of the bells of the jinricksha, the
man—pulled chariot, and the patter of his feet that was the domi-
nant sound of locomotion at night in Tokyo’s small alleys. After
all the catastrophes that have befallen twentieth—century Tokyo,
these tiny, narrow alleys still stretch through the crowded residen—
tial areas of most of the city. But today they are crowded with
autos, bicycles and—Ilondas. To Western eyes, the city was a
gray, weatherbeaten assemblage of shacks—slums, except that
through Japanese industly and cleanliness they were and are tidy
and neat like no other poor areas of the world. There were, of
course, big traditional Japanese—style villas occupied by some of the
Japanese nobility, many of them merchant princes whose fortunes
had arisen only after the opening to the West in the mid—nine-
teenth century. The Peace Exhibition was on in Ueno Park, an
effort by the Japanese to prove to the world that the military
clashes already taking place in China and Siberia were not of their
own doing. The exhibition opened in March and lasted most of
the summer, dominated by Mr. Mikimoto's Pearl Tower, and with
a visit by the then Prince of Wales, later to be Edward VIII and
then Duke of \Vindsor, the main social event of the season. But
the city had all the aspects of an overgrown and ill—planned Ori—
ental bazaar. Only the big japanese business houses and the banks
were grouped in red-brick, imitation-Georgian, VVestern-style
buildings in the Marunouchi district. Frank Lloyd Wright, the
American architect, about this time took a hotel design he re-
portedly conceived originally for Mexico and planted it on the
outskirts of the huge palace enclave surrounded by a moat in the
center of the city. The Imperial Hotel’s three stories and modest
spread seemed monumental. It was not the rather modish but
dilapidated structure—now gone too—it turned into in the
post—World War II era surrounded by the glass and steel struc-
tures of the new Tokyo in the so-called international style. Cover—
ing a goo-by-soo-foot area ——an enormous piece of land by Japa-

TOKYO AND )IATURI'I'Y ZS

ncse standards, where the standard measurement then and now is
still the jo, or a straw mat about three feet by six feet, the Impc/
rial’s three stories were tall—for most Japanese buildings were
only one or two stories. Indeed, the prohibitions against anything
over eight stories lasted until the 19605 when the ban against
higher buildings in the Tokyo area was finally lifted. 'llic gardens
and terraces and pools of the building were called “a gathering of
clans” by Louis H. Sullivan, \Vright's teacher and sponsor, who
along with the rest of the world saw and admired the building
when it was finally completed in 1922 after four years of construe--
tion. It became one of the most important attractions in Tokyo,
3 city almost devoid of attractive monuments, so much the more
when it survived all the catastrophes of the city during the four
decades after its completion.

Making his pilgrimage to the hotel, young Honda, in the care
of his father, arrived like a hyakushyo (hayseed), staring at the
traffic and the buildings. Honda was surprised to see as many as
ten cars at one time. In IIamamatsu he had seen one car a month.
Finally the two — for the elder Honda, too, had never been in the
capital before—managed to find Arto Shokai. The elder Ilonda
introduced himself and his son to Yuzo Sakakibara, the owner,
and young Honda thought himself within minutes of being a full-
fledged apprentice to an auto repair workshop.

“But reality,” Honda says, “was far different from what I had
dreamed. When I set foot on Tokyo soil, leaving my home village,
I was full of burning ambition to become an expert car mechanic.
What happened though was that I spent my time, day after day,
musing the baby of the owner on my back. \Vhen my back he-
came warm, I knew it was the baby. Older apprentices would
make fun of me, saying: ‘Look, a world atlas is written 011 Honda’s
back again.’ ”

At first, Honda took the whole situation stoically. He bought a
chauffeur’s cap with his first pay—five yen ($1.25) a month—

HONDA: TIIE LIAN AND HIS IVIACHINES 26

and hoped for the time when it would be appropriate to his job.
After all, his predicament was the traditional Japanese way of
treating apprentices. Even as late as the 1950s, many small Japa-
nese firms drew no distinction between the duties of a new em-
ployee to the owner’s household and to his business. And, in fact,
as Professor Chie Nakane, the noted cultural anthropologist of
Tokyo University, has pointed out, the concept of the ie (literally
“house" in Japanese but nearer to the English “household”) was
a relationship among coworkers which was a bond as strong as
that of the family in other parts of Asia. It is this concept of house—
hold obligations in preindustrial Japan, Nakane believes, that has
been translated into today’s unique Japanese “company spirit,”
a worker’s sense of belonging to a corporate commercial entity
unknown in its intensity anywhere else in the industrial world.

In spite of this traditional pattern, Honda says now, as day
passed into day he was losing faith. He would have packed his
things, climbed down a rope from his attic futon (a traditional
Japanese mattress bed) and gone back to Shizuoka but for one
thing: He did not know how he could face his parents—his
father’s sense of failure and his mother’s disappointment. Mean—
while business at Arto Shokai prospered. Although there were a
modest number of automobiles, all imported, in Tokyo —and in—
deed in all Japan —— in those days Arto Shokai was also one of the
few repair shops. Suddenly one day the owner called out to Honda:
“Kozo [apprentice], we are very busy today. So come over and
help here!” Honda says he could hardly believe his ears. He was
ecstatic.

Through all the trials and tribulations of a long life, Honda feels
that this experience as an apprentice—an apprentice who had to
wait endlessly to get at his work—was the most trying. He has
told members of his family and fellow officers in the Honda orga-
nization that he believes that it was this experience that gave him
courage to face greater difficulties in later life, that somehow he

TOKYO AND iVIATURITY 27

felt that nothing would ever be so hard for him again. Yet the
jobs he was given for the next year and a half were menial at best.
Then something happened— the kind of national, or even inter-
national, catastrophe that has befallen japan in Honda’s lifetime
but that somehow has always seemed to give him a step upward,
much as the whole nation, itself, has overcome it with persistence
and resilience. It was one of many instances of this sort that really
pose the question of how much the element of chance plays in
any life, and in Honda’s, how often luck has been with him.

In September 1923, the Great Kanto Earthquake occurred. It
was one of the greatest natural disasters that any modern society
has endured. The epicenter of the quake was in Yokohama, the
great satellite port city to Tokyo, where the whole face of the
cliff behind the city fell. The earthquake occurred at midday, just
as hundreds of thousands of Tokyo and Yokohama housewives
were cooking rice for the noonday meal. Besides the thousands of
people who were killed by falling debris and the cavernous cracks
that opened in the ground, tens of thousands more (lied in the
firestorms that swept the huge cities, blazing instantly through
the wood and paper houses like so many matchboxcs ignited from
the noontime rice-cooking fires in every household.

In Japanese mythology, it is said that the island of Honshu on
which Tokyo and Kyoto are found rides on the back of a whale,
The great mammal’s nose is pointed north and his two fins extend,
one west in the direction of Kyoto and one east in the direction
of Tokyo. And, like a whale, it is there that the action is most
fierce when the whale moves and the country has an earthquake.
However far-fetched the metaphor, it does describe fairly accu-
rately what has befallen the Japanese over the centuries when these
great catastrophes have occurred. Earthquakes are more frequent
in northern Honshu but less destructive, but in both the Kyoto
and Tokyo areas they are fierce. Over the past three hundred years
there have been thirteen major tremors in the Kyoto area and ten

HONDA: THE MAN AND HIS MACHINES 28

in the Tokyo region. On that morning of September 1, 1923, it
came without warning, without the rumbling noise that some—
times accompanies the tremors. Actually, it was a series of shocks
—some twenty—two were recorded the first day, more than three
hundred the second day, and more than a hundred for three sub—
sequent days. It’s estimated that some 3,600 people in Tokyo
alone—and the earthquake actually did more damage immedi-
ately in Yokohama than in the capital — were crushed in the first
tremors. Some 57,000 died in the great fires that followed and
another 12,000 or so drowned, either by falling into the water or
by diving into one of the many canals that crisscrossed the lower
part of the city in those days in order to escape the fire.

The calamity was more than a physical disaster, however. It was
a great divide in modern Iapanese history. Before that, nineteenth-
ce'ntury Iapan had had phenomenal progress. The Restoration of
the Emperor in the 18605 and the ending of the policy of seclusion
had led to a relatively stable government under the reforming
Emperor Meiji. After initial difficulties with foreign banks and
lenders, the Iapanese had succeeded in finding a method of im-
porting the technology and capital they needed from abroad for
industrialization. Their leadership had seen industrialization as
the only insurance that they would not fall victim to Western im-
perialism like their Chinese neighbors. With their traditional skill
at taking what they wanted and needed from foreign cultures and
rejecting the rest, they appeared to have achieved a synthesis of
the old Japanese society and the new industrialization. Successful
wars in 1898 against the Chinese and in 1905 against the Russians
not only secured their independence, but delivered valuable raw
material sources through the annexation of Taiwan and the colo-
nization of Korea and parts of China. And in 1918, as full-fledged
— or almost— members of the victorious alliance in Europe, they
had achieved their sought—for place as a recognized major power
among the nations. It had all happened in a little over a half

TOKYO AND NIA'I‘URI'I‘Y 29

century, a miracle in world history, and certainly unparalleled in
the Asian family of nations.

For many Japanese later on in the 19303, the Great Kanto
Earthquake was to be remembered as the high watermark of “the
good old days.” The holocaust was followed by wild political ru-
mors that the emigrant Korean community in Tokyo was plotting
to rebel. They were slaughtered mercilessly in the miserable slums
where they lived. 'I'hat infamous episode aggravates Japanese-
Korean relations to this day. The catastrophe was also followed
shortly by the first of the signs of the oncoming worldwide depres-
sion that was to hit Japan hardest, the world’s marginal trading
nation then even as it is today. Political corruption, the failure of
the imitative parliamentary system borrowed from the West, the
ascension to the throne of a weak and perhaps mentally disturbed
emperor—all seemed to follow in quick succession. Never mind
that the chronology is hardly correct. It is a part of Japanese folk-
lore now that the earthquake was the signal for a long series of
disasters that led, finally, to World ‘War II (or as the Japanese call
it, the Pacific War) and the final defeat. It is why some pessimistic,
older Japanese speak today so ominously of the likelihood of an-
other earthquake catastrophe in their islands. 'l‘heir forebodings
are reinforced by a certain statistical certainty—a major earth—
quake has come about every sixty years. And an earthquake's
meaning portends for many far more than just a natural disaster.

Honda was at his apprenticeship in Arto Shokai that noontime
when the calamity bcfell Tokyo. “'l'he first thing which I tried to
grab at the time was the telephone. I had been told that the tele-
phone was a very expensive thing and so I thought of detaching it
from the wall, using a screwdriver, and then to get it out of the
house." i

“ ‘No use saving the telephone,’ someone shouted at me," Honda
remembers. “ ‘Move out the cars! Anybody who can drive, drive
one car each to a safe place!’ "

HONDA: ‘l‘IIIi l\IAl\' AND HIS ‘MACIIINES 30

Honda had never driven a car. But, typical of his daredevil
character, that didn’t deter him He hopped into one of the cars,
maneuvered it out of the garage, and picked his way through the
streets clogged with men, women, and children carrying bedding
and food and scurrying in every direction. The fires reached the
Arto Shokai and completely burned it out. Honda took refuge
with the repair shop owner and his family in a corner under the
elevated railway near Kanda station in eastern Tokyo. In the ruins
of a warehouse next door he found canned food not too badly
damaged by the fire, and he ate to his heart’s content.

“Whenever I had time,” he says, “I went downtown on a mo—
torcycle we had managed to salvage. It had a sideear and I carried
passengers who paid me to get about the city from railway station
to station where they could get trains. I made money. I needed it
to buy rice for my owner and his family and myself. But mostly I
enjoyed myself riding around Tokyo at what seemed breakneck
speeds on the motorcycle.”

The great calamity turned out to be a piece of good luck for
young Honda in other ways too. Before the earthquake and the
fire, the Arto Shokai had employed fifteen or sixteen repairmen,
Most of thorn had gone back to their homes when the eatastr0phe
fell because their homes were burned out and they had no food
for their families Only two were left—- the senior apprentice and
Honda. Business was resumed, repairing a large number of vehicles
by hand that had been burned in an assembly plant in Shinagawa,
Honda says now that the repairs, given the shortage of materials
and their poor craftsmanship, were pretty bad. But somehow they
made the ears look like new, cannibalizing parts and coating them
with paint. The biggest problem, he remembers, was with the
wheels. The spokes of the wheels of Japanese cars in those days
were made of wood and they had burned away. Honda and his
boss managed to improvise new ones. But it was hard work and he
remembered it later and it was to play a role in his career.

TOKYO AND IMATURITY 31

“So far as I was concerned," Honda recalls today, “the earth-
quake was far from being a disaster. I could drive cars, ride motor-
cycles, and I learned how to repair automobiles.” That time and
experience might have been much further off if the disaster had
not come.

But the country boy still had a lot to learn about life in the big
city. He tells this story on his lack of sophistication: Once on his
day off he was getting ready to go to Asakusa, the notorious “gay
quarter” (a Japanese euphemism for bordellos) of Tokyo dating
from Edo days before the Meiji Restoration. The senior mechanic
suggested they go together. “I’ll show you how to get off the
streetcar without paying. Walk close behind and copy all my ges-
tures.” When the men arrived in Asakusa, the senior apprentice
got off first, pointing back with his thumb to Honda. For a mo-
ment Honda thought he was home free—then the conductor
called. Unfortunately there was no one behind Honda’s pointing
thumb. He had to pay both fares.

Life was a succession of these relatively innocent adventures in
the city -— and, as for most Japanese, a lot of extremely hard work.
He made rapid progress in the repair shop, winning the trust and
goodwill of the “master”—owner. Soon Honda was going outside
the shop to handle more complicated repair jobs. “One summer
day," Honda recalls, “I was told by the owner to go to Kudan
beyond Kanda [in eastern Tokyo] to take care of a car which had
been stranded there because of gear trouble. I bicycled to the spot
and found that the gears could not be repaired unless they were
taken back to the shop. So I tied the gearbox, black with grease, to
the back of the bicycle and hurried back to IIongo, humming as
I pedaled along. It was already evening and beginning to get dark.
I had no lights on the bike. I arrived at the intersection of Suido—
bashi and was hailed by a policeman. He wore the traditional uni—
form and snow—white gloves plus a saber of the emperor’s police of
those days.

HONDA: THE )IAN AND HIS NIACHINES 32

“In order to st0p me, the policeman thrcw himself across the
gearbox which I was carrying on the back of the bike. ‘What do
you think you are doing . . . running around without lights! Come
to the police box with me!’ the policeman said peremptorily.
When we got into the light of the police box, the policeman
looked down at his uniform, astonished to find it and his gloves
smeared with black grease. He flew into a rage, screaming at me:
‘You rascal, why do you have to carry something like that on a
bicycle?’ ”

Back at the shop, because of his earlier trials and tribulations,
the owner and the senior mechanic were sure the country boy was
in trouble again. As it grew late the mechanic went looking for
him, finally discovered him at the police box still being scolded
by the policeman and managed to rescue him.

Honda slowly modified his hayseed appearance and reputation.
But his youth, a terrible obstacle to ambitious young men even
now in contemporary Japan, was harder to overcome. At eighteen,
the owner sent him to Morioka, a city in northern Honshu island,
some five hundred miles from Tokyo. Honda was delighted since
it was proof that he finally had been accepted as a full—fledged
apprentice. He got into his gold—braided overalls—for, like Japa—
nese mechanics at the time, he wore these imported work clothes
modeled on German military uniforms —and started off by train.
The job was to repair a fire engine. When he arrived the fire bri-
gade leader and other men in the company were annoyed and
skeptical, perplexed that so young a mechanic should have been
sent for the job.

Honda was given a small room next to the maid’s room at the
local inn to store his kit. The firemen watched nervously as he
began his work. “Kozo—san [Mr Apprentice], are you sure? Do you
know what you are doing?” they asked repeatedly. Honda, never
one to be taken at less than his measure, worked resolutely and
silently. He had taken the engine apart and by the end of the third

TOKYO AND I\1A']'UR1TY 33

day he put it together again. A test run went off smoothly, with
the engine starting up immediately.

“\Vhen I returned to the inn in the evening," he says, “I found
that my things had been moved into a Class A room with a dress-
ing alcove. I'Iow coldly calculating! Until that morning I had been
a mere kozo, but suddenly I became important. I was rather em-
barrassed. A hot bath was drawn for me, The evening meal came
complete with sake [Japanese rice wine] and a maid serving it.
They didn’t know — and would only have guessed if they had seen
my hand trembling— that it was the first time I had ever drank
sake in my life, and the first time I had been waited upon in that
manner!”

The owner was pleased when IIonda returned to Tokyo and
rapidly he became more and more important to the operation.
When the time for his compulsory military service came along,
Honda failed the physical examination—he is colorblind like
many Japanese (apparently because of dietary deficiencies as chil-
dren). In appreciation of the opportunities he had been given and
the confidence of the owner of the shop in his work, he agreed to
stay on another year as an apprentice.

Summing it all up, IIonda looks back on those six years with
great satisfaction: “I acquired skills as a repairman, mastered a
knowledge of the automobile, and learned 110w to drivc. My master
had enough confidence in me to help set me up in business on my
own. A son of a blacksmith-turned-bicycle-shopvowner, and by na/
ture fond of fumbling with machinery, I was quick in acquiring
skills. And all my life I endured suffering, recalling the hardships
and joys experienced in those years. \Vllatever I did in those
years, no matter how trivial, profited me. For in the long run there
is no waste in life.”

4

 

 

Return of the Native

THE SIGN was pretty grand. It said: HAMAMATSU BRANCH OF THE
ARTO SIIOKAI. But inside the tiny little garage, things were pretty
humble: Honda and one apprentice worked alone. Still, Honda’s
father was terribly proud of the Tokyo-returned son; he congratu-
lated him and built him a small house and supplied one bag of rice
as a token of good fortune so “he would not starve.” Honda im—
mediately ran into the one great bugaboo for all young Iapanese:
He was considered too young by the potential customers to do
the repairs. Two or three other shops in the city were run by older
men, stilt competition. More quickly than had been anticipated,
Honda made himself a reputation —it was a reputation built on

RETURN OI“ THE NATIVE 3;

making repairs to cars which other shops in the little city said were
hopeless or where other garages had failed. By the end of the first
year, Honda ——-who throughout his career has never had a reputa—
tion for knowing much about money and how to monitor it—
finished with a total profit of 80 sen (about two cents). But as a
proprietor at twentytwo of a “successful” business Honda con-
sidered himself very lucky. And he made a resolution that he
would save 1,000 yen (about $250) during his working life.

Whatever his financial prowess, Honda attacked the mechanical
problems before him with energy and persistence. And soon he
began the kind of tinkering with new ideas that was to make the
name Honda known throughout the world for technical innova-
tion. He continued to have problems with the wooden spokes used
in the wheels of the automobiles he repaired, and he remembered
the difficult problem of the wheels of the burned—out cars after the
earthquake in Tokyo. He began to experiment and soon succeeded
in making cast-metal spokes. Honda put them on exhibition at a
trade fair, patenting his model. It was the first of more than a
hundred patents he would hold personally. The spokes proved such
a success that Japanese trading companies were soon exporting
them to markets as far away as India. By the time he was twenty—
five the repair shop was earning a profit of 1,000 yen a month —
something undreamed of by the young Honda only months before.
He was employing fifty men, one of the youngest entrepreneurs
about, and the shop was steadily expanding.

“By nature,” Honda says, “it is not in me to spend money spar—
ingly when I am having a good time. Neither do I believe in having
a good time using somebody else’s money. I believe in spending
my own money as I like, and when I spend it, I spend it to have a
good time in a grand way."

The young Honda became the local Hamamatsu playboy. It was
a common sight not only to see him going from geisha house to
geisha house, but often piling a few geisha into a car and driving

HONDA: THE MAN AND HIS MACHINES 36

at breakneck speed through the streets of the little city. So much
time did he spend with the geisha that although he never took
lessons, he learned to sing nagauta (a long, traditional Japanese
epic song—poem), hauta (short love songs) and dodoitsu (limericks).
Today, along with a list of company officials from among Tokyo’s
most prestigious firms, Honda participates in an annual recital by
lovers of Japanese traditional musical arts. And although Honda’s
contribution may not always be as ambitious as some other execu-
tives’, it’s done with a casualness and the aplomb‘ of an expe—
rienced trooper.

Honda had two cars—“naturally, foreign—made,” he says now.
One day driving back from the traditional “cherry blossom—viewing
party”—sometimes a Japanese excuse for a drunken orgy—in
the spring with a party of geisha, he was so drunk that he drove the
car off a bridge into a river. Luckily the bridge wasn’t high and
the car landed in the mud and no one was hurt. A few weeks
earlier he had made the headlines of the local newspaper when he
got into an argument with the tax oflice. Honda decided to have it
out with the tax officials —by getting a fire engine hose and dous—
ing the officials as they came out of their building. Honda says the
editor who headlined a story in his newspaper “The Arto Shokai
on the Rampage” was annoyed, mostly, “that a young man of
twenty—five could afford such sprees which even men of forty and
fifty could not afiord."

The bridge accident almost turned into another social disaster,
however, when an apprentice geisha riding with him refused to
leave the scene of the “crime." Honda had visions of more news-
paper headlines, perhaps trouble with the police. She was sobbing
and refused to budge because she couldn’t find one of her geta, a
traditional Japanese wooden clog. “I promised her that I would
buy her a new pair," Honda says. And then, a little grimly: “I
could not help feeling that women have strong feelings indeed of
attachment to personal belongings.” Years later during World

RETURN 01’ THE NATIVE 37

War II, Honda offered his seat to a lady standing in a crowded
wartime train. Their eyes met and they recognized each other—
she was the young geisha of the accident—and reminisced over
the incident of the car that went over the bridge and the missing
geta, a moment of lightheartedness midst the overwhelming
tragedy of the war.

In that period each neighborhood community in Japan had a
young men’s association whose job it was to carry on a night patrol
against burglaries. In winter members of the watch took turns
going through the neighborhood from eleven in the evening until
five in the morning. Honda was a member of the group. But his
patrol was a different affair; he was usually accompanied by geisha
as he made the rounds. One geisha in full regalia walked ahead
clanging a gong and others walked beside him, singing, joking and
laughing. Another stayed back at his house where she heated the
sake that was fetched to him by relay. “In my case," Honda says,
“it was a night patrol in grand style. The elders in the neighbor—
hood would say that they didn’t have to worry about my doing the
job because I made the rounds in a group. But they did object to
the noise."

In May every year, the Hamamatsu area celebrates a local festi—
val called the Kite Fete. Elaborate kites arc flown, often “fought”
in the sky, and wagers made. One year Ilonda was celebrating it in
grand style in a geisha house. He and his friends got very drunk.
After that the details are a little fuzzy, but Honda says one of the
geisha said something to him that he didn't like. He flew into a
rage, picked her up, and threw her out of the window. 'lhcre was
a burst of sparks. “The mere thought of the whole thing makes me
shudder now,” he says. “Looking out of the window, I saw her
dangling from the electric wires. Some of the wires were cut and
the lights went out all over the neighborhood. Suddenly very sobcr,
I rushed out of the room, ran downstairs, and got the geisha down
to the ground. I think she might have been killed had she fallen

HONDA: THE RIAN AND HIS IVIACHINES 38

straight to the ground, but fortunately she was still wearing the
heavy winter kimono. The geisha involved is now the respected
proprietress of a bar. Even today, I cannot hold up my head when
I see her,” Honda says.

Honda says his theory that no experience is ever a waste applies
even to his hell—raising days, too, and that they too were profitable.
“I had plenty of good times when I was young. But by frequenting
the ‘gay quarters,’ I learned about the feelings of people who travel
the back ways of life. I was able to acquire a knowledge of human
nature through exposure to life in the raw. If, as some people say, I
am not exactly a man with the characteristics usually associated
with technology, with successful big business, perhaps it is because
of this wide experience.”

Chasing after geisha was only. part of Honda’s extracurricular
activities. He was still intent on finding out all he could about
motors and engines. He made himself a speedboat which he raced
on Lake Hamana. And he developed a great interest in racing cars,
their design, how to build them, and how to race them, which was
to become basic to the success of the Honda organization later on.
\thn he was at Arto Shokai, his master had asked if he was
interested in racers and suggested that he might build one in the
shop—on his own time. So for months at a time, from eight
o’clock in the evening to midnight, Honda tinkered with the
abandoned parts of other cars and put together a racing model.
He moved on from this earlier model to building two racers with
motors modified from Curtis-Wright aircraft engines, surplus dis—
posal at the Tsudanuma Air Base in nearby Chiba. The second
of these was so successful that it won a racing meet. Back in
Hamamatsu, Honda became interested not only in building the
cars but in actually racing them himself. He journeyed up to To-
kyo occasionally, taking part in a number of races, winning first
place from time to time.

Honda had also taken himself a wife. Sachi, the daughter of a

RETURN OF THE NATIVE 39

farmer in a neighboring small town, was courted in the same kind
of unorthodox fashion that Honda did most things. He turned up
at her house with a racy foreign car which caused quite a bit of
commotion in the neighborhood.

“A driver—san,” the neighbors said, for there were not many cars,
and certainly still fewer being driven by private owners, and a
young man at that. Honda chose his wife himself and it came close
to being a “love match,” as the Japanese say. But the area was
still very traditional and the marriage was formally arranged by the
parents through a “go-between." One story has it that Honda
turned his wedding party into a geisha party where he celebrated
by dancing in the nude.

Today Mrs. Honda looks very much like a Japanese Mary Astor,
with a beautiful face that shows some of the years of hard work
and worry that have gone into living with Kaminari—san—Mr.
Thunder— as Honda is called in the family and by company asso-
ciates behind his back because of his instantaneous temper and his
sometimes erratic behavior. Coworkers say that Honda’s temper is
like a summer storm —— it suddenly blows up, then, as quickly, the
sun comes out, and there are no grudges. But in the meantime it
can be brutal. One plant manager remembers Honda, enraged,
shouting and beating himself on the head when the then gear fore-
man had made an engineering mistake. Mrs. Honda is not so sure
about the grudges. She says that he remembers and reminds her
months later of something she has said or done. More than any-
thing else, she must be prepared for his impatience and his direct-
ness. She and a son and daughter-in-law laugh at Honda’s habit of
arriving home from the factory or golf, beginning to take his clothes
off piece by piece as he enters the doorway of the house, and mov-
ing on to a bath. Unlike the average Japanese who makes a lengthy
and ritualistic program of the nightly bath, a protocol that cannot
be dispensed with, Honda is in and out before Mrs. Honda can
prepare his food.

0
3'
m
'1
3
3:

Honda, successful auto racer, 1 036

 

WINOH OHIHIJIUS do K83] minor;

 

Air. and film. Honda with their oldest son, circa 1939.

Mrs. Honda is not the conventional, retiring Tokyo housewife,
either. She has a reputation in the company and among friends as
a forceful woman. She has learned to pilot a small plane. And she
has a sense of humor and imagination to match her husband’s. On
a trip to Los Angeles a few years ago, a member of the American
Honda company was taking her someplace 0n the LA. freeways.
He noticed that every few minutes Mrs. Honda said something and
nodded, almost like a religious benediction. After a while he caught
on: Every time a Honda motorcycle was passed or passed the car in

HONDA: THE {MAN AND HIS MACHINES 42

which she was riding, she said: “God bless you!" And the implica-
tion was as much a note of thanksgiving for the purchase of the
vehicle as concern for the driver’s safety.

The family lives in a modern house in a not-so—fashionable part
of Tokyo. Indeed, with virtually no zoning, Tokyo doesn’t have
any really posh, purely residential areas. The house is luxurious by
Japanese standards, with a lovely simulated brook that winds
through a small garden, stocked with fish (ayu, of course) for an
annual “fishing party" in the late summer for some company
employees and friends. But the furnishings are modest given the
huge family fortune. Honda’s bedroom is traditional Japanese
tatami—straw mats—but a colored television set is suspended
on the ceiling to be watched lying on one’s back. Mrs. Honda as
often as not does her errands downtown by taking Tokyo’s in—
credibly crowded commuter trains rather than a family car. Only
recently has Honda begun to be chauffeured and he still forbids
chauffeured cars in the company for anyone but guests.

A son now runs his own design shop, doing some business with
the company. But Honda long ago laid down the rule that there
would be no nepotism and that family members would not be
drawn into the business. A daughter is married to an Australian
businessman whom she met when he worked in Tokyo. They and
the Hondas' only grandchild live in Perth, Australia. A second,
younger son died of illness in 1973 after returning home from
school in the United States, partly as a result of a surfing accident.

Mrs. Honda looks back on the period her husband raced auto-
mobiles as one of the most diflicult for the family. “We were never
sure when he was going to have a bad accident and kill himself,"
she says. He almost did in July 1936. Again, it seems to have been
one of those catastrophes which turned Honda in more profitable
directions. He was thirty—one, participating in the All—Japan Speed
Rally on a circuit along the Tania River between Tokyo and
Yokohama. He was moving at about a hundred miles an hour

RETURN OF THE NATIVE 43

toward the final goal, well in the lead, when another car that had
been off the lanes for repairs moved into his path. In a flash his car
collided with it and somersaultcd three times; Honda was thrown
free of the car, badly hurt, unconscious.

“I recovered consciousness in a hospital bed. I felt acute pains
all over my face. rl'hc left half of my face was crushed. My left arm
was dislocated at the shoulder, and my wrist was broken. My
younger brother—riding beside me—was seriously injured with
four ribs broken. It was miraculous that I survived the accident."
Honda still carries a scar over his left eye from it.

Honda is proud of the fact that the modified Ford he drove in
that race won a record. (His record of 120 km/h in the race was
held until very recently for that track.) The judges awarded him a
special trophy even though he did not win the race. It took him
some eighteen months to recover. Afterward, the family prevailed
upon him to quit driving. And it was perhaps this as much as any-
thing that began to direct his energies away from racing and
designing racing cars for sports to other engineering concerns. Had
the accident not been so severe, Honda might have continued a
career as a racing driver and racevcar builder.

Earlier Honda had already decided that although the repair
business was thriving, he wanted to venture into new fields. One
reason was that many of his former employees had, after their
periods of apprenticeship, gone off on their own. Now they cori—
stituted his main competition. The number of automobiles was Iiot
increasing rapidly. Honda says, too, “A garage was a garage after
all. No matter how good a repair job is done by a garage, requests
for repair work wouldn’t come from Tokyo or America.” Further-
more, thc whole situation in Japan was changing. The great
modern calamity of the Japanese, the so—called Marco Polo Bridge
Incident, had begun in 1937 — the Japanese military’s attempt to
conquer China. Japan was locked in what was to become a
cataclysmic and devastating struggle to conquer the vast Chinese

HONDA: THE MAN AND HIS MACHINES 44

subcontinent, finally drawing her into the greater catastrophe of
World War II with Germany and Italy as her allies against the
United States. Materials were becoming scarce and regulations on
repairs and work on machinery were multiplying everywhere.
Honda decided that it was time for him to think of something
more ambitious, to think of manufacturing rather than repairing
other men’s machines.

He decided to go into the manufacture of piston rings. But
there was difficulty persuading his “board of directors" to make
the switch. They were his father and other old friends of the family
who had helped him start the repair shop. At the same time,
perhaps as a result of the racing accident, he came down with
severe facial neuralgia so painful that he had to stay away from
work for two months. Miraculously, when an intermediary working
in the Japanese way — as a go-bctween for two parties in conflict —
helped persuade the rest of the company to permit the change in
its activities, Honda’s neuralgia was cured overnight. Honda was
ready to begin his remarkable career as a manufacturer.

5

 

 

Honda and the War

PISTON RINGS, Honda had thought, would be a relatively simple
manufacturing problem. But not much went right in the new busi»
ness from the beginning after Honda had convinced his friends
that the operations should move that way. lIonda finally went to an
old friend who owned a foundry and asked his advice His reply
was blunt: “Don’t kid yourself. You cannot pick up casting know
how just because you want to. You need to serve an apprentice»
ship." Honda wasn’t really interested in going through something
like that again, and, in any case, the new company was already
launched and he had to make a success of it. He had borrowed and
invested a great deal of money in machinery and its installation.

HONDA: THE {MAN AND HIS IVIACHINES 46

He had also hired fifty workers, so certain was he that he could
make piston rings and that they would sell.

So, in his typical way—and in a fairly typical Japanese way,
what the Iapancse refer to, sometimes ironically, as yamato
damashii, the Iapanese spirit of persistence— he set out to learn
about casting. Honda and his principal helper began to live and
work in the factory, literally all day and all night. They studied
casting until two or three in the morning, then got up and tried
their hand at actually casting piston rings. Honda turned into a
hermit, complete with long hair. His hair grew so long, since he
would not take time out to have it cut, that Mrs. Honda came to
the factory to do it there. When fatigue overcame the pair, Honda
and his assistant would drink a little sake, lie down on a straw mat
on the factory floor and doze. Day after day he followed this
routine—as his savings dribbled away. He finally had to pawn
some of his wife’s jewelry and other precious possessions to keep
going. -

“I could hold out only because I knew that all of us would starve
if I gave up. Nevertheless, we made little progress. Finally I was
driven to the last extremity: I realized that nothing more or less
than my lack of knowledge was at the root of the problem. So I
went to Professor Fujita of the Hamamatsu School of Technology
[the present Shizuoka University] and asked for his help. Professor
F ujita introduced me to another professor at the school, Professor
Tashiro. After examining some of the piston rings we had made,
Professor Tashiro told me that silicon was missing from our
products. Looking back, I am shamefaced to admit that we not
only had no knowledge of the application of silicon, but we didn’t
even know we needed it!”

Out of this experience Honda made a difficult decision. He
enrolled himself as a special student in the school with the approval
of its principal. One has to appreciate the terrible impropriety that
it constituted in the caste—conscious, age—conscious Japanese society

HONDA AND THE \VAR 47

of that time—or, for that matter, even today. Honda was nomi—

nally a successful businessman, at least ten years older than the
- other students, and for an older man to ask permission to go to
the school was an unheard-of idea. But he went to school and at
the same time kept working on the piston rings. Finally, on
November 20, 1937, Honda produced the first piston rings which
he says now were “more or less acceptable.” It had been nine
months, one of the toughest times of his life. Meanwhile, Honda
was still going to classes, but the social problems connected with
it were beginning to multiply. He drove a Nisan to class while most
of the teachers, not to speak of the students, walked. Honda’s
attitude in class was different from that of the other students;
they took notes, blindly, laboriously, meticulously, in the fashion
of Oriental scholasticism based on rote learning, memorization of
lectures by savants. Honda listened carefully to the lectures, taking
mental notes, thinking of everything that was said in terms of
those piston rings. When examinations were held, he didn't even
attend. After two months he was called into the principal’s office
and told that he would have to withdraw from the school. When
Honda asked why, he was told that he could not receive a diploma
if he didn’t take the examinations. His answer to that, of course,
was that he didn’t want the diploma.

“1 am not generally a poor loser,” he says, “but I did use some
abusive language. I told them I didn’t really care whether I got a
diploma or not, that ‘a ticket to a movie theater will get you into
a theater but you cannot even see a movie with a diploma. A
diploma does not assure you of bread and butter! So who
cares?’ . .

But Honda did continue to go to favorite lectures from time to
time. And he acknowledges now that he learned a good deal from
this second ordeal with formal education. Yet out of this experi—
ence came a profound contempt for book learning and the creden—
tials of Japanese formal university education which have been held

HONDA: THE LIAN AND HIS IVIACHINES 48

so high traditionally and which in the post—World War II period
have become even more sanctified in Japanese life. Not only has a
university degree become- a passport into many businesses, but the
old—school connection —— what the Japanese call gakkubatsu, school
cliques—dominate many businesses, industries, and government
bureaucracies. Until very recently, Honda insisted that employees
in the Honda factories and oflices be treated on a basis of equality
whatever their schooling when they entered the company, That
has been considerably modified as the company has moved into
higher and higher technological levels requiring the services of
university-trained engineers. But Honda employees today will
proudly tell you that their company has no gakkubatsu —as
proudly as they point out that they do not belong to a zaibatsu,
the former family—controlled cartels that dominated the pre—World
War II Japanese economy and that have been reestablished in
other forms in the past twenty-five years.

The engineering problems of the piston ring proved to be only
one of many obstacles that Honda’s company would have to over—
come. Mass production on a commercial basis had many pitfalls.
The attempt to meet quality standards was excruciating. When
Honda tried to deliver a 50,000 piston ring order for Toyota fifty
were chosen at random for testing but only three met requirements.
Honda, using the tried and true practice of Japanese handicraft
industries since the beginning of industrialization in the mid-
nineteenth century, managed to keep the operation going by selling
to what are called euphemistically small and medium—sized indus-
tries. These are companies in that part of the economy which
depend on just the kind of poor standards that Honda met and
cannot afford to buy higher—quality goods. Until quite recently
these companies —with their low quality and labor standards—
provided much of Japan’s international competitive advantage.

Honda sought to get government priority for cement to build a
plant and failed. So he and his men simply sat down and manu-

HONDA AND THE \VAR 49

factured their own cement. \Vithin two years he had built the
plant and got the operation to the point where it could supply
parts to Toyota and meet its standards. On the basis of this suc—
cess, Toyota agreed to help finance the company that by the end
of World \Var II was capitalized at more than a million yen. As
the war continued in China, and what the Japanese call the Pacific
War with the United States started at Pearl Harbor in 1941,
Honda’s operations expanded to other products, too. He built parts
and machinery for the navy. He subcontracted from another
Hamamatsu firm, Nippon Gakki, famous for its musical instru-
ments, to make propellers for the big Japanese bombers whose
principal base was only a few yards from Honda’s Hamamatsu
factory.

Honda’s mechanical originality came into play again when he
developed automatic equipment for producing piston rings that
permitted the machines to be run by relatively uninitiated women
workers as the wartime male manpower pool dried up. Much of
this experience he translated after \Vorld War II into the produc—
tion of Honda’s motorcycles. For the airplane propellers, Honda
designed a machine that could plane mechanically and automati—
cally—a job that previously had been done laboriously by hand
and had taken more than a week for a single operation. Honda's
machine did the whole job in thirty minutes. Honda, never one for
false modesty, thought it was a pretty good machine. And in
the atmosphere of chauvinistic, slogan-happy, wartime Japan, it
achieved enormous publicity. Yomiuri, one of Japan’s three big
newspapers then and today, reported it under a huge banner head—
line: GLORY 'r'o TECHNOLOGY FOR INCREASED PRODUCTION OF WINGS
—FAREWELL T0 MANUAL LABOR. And Honda was given a com»
mendation by the military.

The war and the feverish Japanese production for the war in
China and Southeast Asia had carried Honda and his operations
along with them. But as the net of US. power began to close in on

HONDA: ’I'IIE IVIAN AND HIS LIACIIINES 50

the Japanese homc islands, Honda, too, began to feel the pinch.
He lost two factories in the firebombings by the Americans.
More than once he had to abandon his car and head for a ditch
when U.S. naval aircraft came swinging in to attack the bomber
base and the industrial area around it. Yet, with the fantastic way
Honda always seems to have for pulling luck out of any inferno,
even then he profited: The extra gasoline tanks that the US.
Navy fighter planes sometimes dropped on these attacks supplied
sorely needed precious and scarce nonferrous metals at times.
Honda called this dividend from the bombings “Truman’s gift.”
And, he says now, in some cases there was even gasoline still in
them, a treasure trove in scarcity-ridden Japan. Actually, the war’s
end was almost anticlimactic for Honda’s operations, for in 1945 an
earthquake hit the Hamamatsu area, destroying Honda’s plant and
the machines inside. While he and his men were beginning to
repair the broken machinery, the war came to an end with the
god—emperor speaking by radio for the first time to his people,
calling for surrender. Honda was at his Iwata factory. He stood
among his employees, many of them sobbing. “I was crying, too,”
Honda says—and adds impishly: “I was sad too that I wouldn’t
be getting ‘Truman’s gift’ anymore."

The end of the war made the production of piston rings hope—
less. Honda had an oFtcr from Toyota to continue to supply them
with other parts, but he had had enough of that sort of work.
”During the war, I did not pick a quarrel with our ‘in-law,’ the
Toyota people, because we were all fighting for the same cause.
But now that the war was ended, I wanted to be free to display
my own originality. Besides, rumor had it that the American
Occupational General Headquarters was going to break up Toyota
as one of the offending zaibatsu companies, and I decided to sever
my relations with them completely.”

From the sale of the piston ring company (Tokai Seiki), Honda
netted 450,000 yen, about $125,000 at the old prewar exchange

HONDA AND THE \VAR 5]

rate. He decided to spend some time leisurely waiting to see what
was to happen to the country. He rested, visited friends, and
relaxed, playing the shakuhaehi (a traditional shepherd's bamboo
flute) as a pastime. People who saw Honda from time to time
during those days remember him as a rather enigmatic figure,
dressed most often in his shop clothes with a locomotive engineer’s
Cap, sometimes roaring down the street on a motorcycle. One
Japanese businessman who remembers him then says, rather wist-
fully now, that when Honda came to talk to him about the
general situation and business possibilities, he brushed him off as
an unacceptable eccentric. It was a time of scrounging. Mrs.
Honda had taken the children and gone back to her parents"
farm during the w01st days at the end of the war in order to find
food for them. Finding enough rice to feed a family became a
principal problem for most Japanese families. But Honda was not
to be defeated by the destruction, the scarcities, and the general
mood of disaster and hopelessness.

“There was an alcohol plant in the district of Iwata where my
former plant had been. Toward the end of the war I went there
and bought a drum of medical alcohol for ten thousand yen — no
small amount of money in those days. It immediately paid off in
the aftermath of the war. I installed the drum right in my house
and made my own synthetic sake and invited friends over,"
Honda relates, with that roguish gleam in his eyes that marks
much of his conversation. Sometimes he transferred the drinking
sessions to the nearby police school, where he had been invited to
join the teaching faculty as an unpaid member. Honda took his
homemade sake along and drank with the police cadets, offering
them training in automobile repair and minor engineering. For a
while he rigged up an electrically operated salt distillation plant on
the beach near Hamamatsu, swapping his salt for rice with the
farmers. Mrs. Honda, between her forays looking for rice, began
to worry about her husband, worried that he would fall prey to the

HONDA: THE MAN AND HIS MACHINES 52

general mood of apathy and lack of purpose that so many middle-
aged Japanese suffered at the end of the war in the wake of the
profound psychological shock the defeat and occupation had
brought. Honda says about this period that he was not simply
drifting as others thought, but was considering very deliberately
what he should do next. The first idea that came to him was the
possibility of going into the manufacture of textile machinery.
Hamamatsu had been one of the centers for the manufacture of
weaving and spinning machines ever since the industry started in
Japan in the 1880s. Honda had investigated the so-called gachaman
machine. (Cacha is a word describing onomatopoeically the sound
of the machine, man is 10,000 in Japanese ordinals; it means that
one such sound brings in a lot of money.) There was an acute
shortage of clothing, of course, and much of Japan’s textile ma—
chinery lay in twisted wrecks around the country. Honda had
always felt weaving machine design was extremely primitive. He
wanted to revolutionize it by substituting for the simple horizontal
shuttle a device to produce a rotary system that could weave cloth
at high speed by moving vertically as well as horizontally. A year
after the end of the war, he founded the Honda Gijutsu Kenkyujo
(Technological Research Institute) in an old abandoned barracks
on a piece of land he owned in Hamamatsu. But before he could
get a piece of textile machinery into production, his funds ran out
and he had to give up the project.

It was a bad time, a time when Americans talked of returning
Japan (and Germany) to a preindustrial, pastoral society to prevent
the possibility of the Japanese ever making war again. Honda was
to share his countrymen’s travail and to play a large role in Japan’s
restoration.

 

 

 

Honda and His Dream

As FAR AS THE EYE could see lay the Tokyo rubble. It was punctu‘
ated only by the fire—scarred chimneys, and, ironically, by the small
safes which the Japanese kept in their little stores and homes.
(Even today Japan functions on cash to an extent not known in
other industrial economies.) The elevated trains and the suburban
tracks of the national railway broke up the vast expanses. Only the
Marunouchi area around Tokyo Central Railway Station, pur<
posely spared by US. bombers to later use as Occupation head»
quarters, was left relatively untouched from before the war, That
desolate picture, so difficult to visualize and compare to the great
city of skyscrapers that has grown up in its wake today, was a
reflection of the nation as a whole in 1945.

HONDA: TIIE AIAN AND 1113 IVIACHINES S4

The Japanese had lost some 2,376,000 soldiers and civilians at—
tached to the armed forces, either killed, missing or seriously
wounded. At home, the American firebombing on the cities and
raids on military targets had cost another 668,000 lives and casual-
ties. Close to nine million people had lost their homes and personal
belongings. There were two million virtually penniless civilians who
had to be repatriated from the former imperial territories in Taiwan
(Formosa), Korea, the Chinese mainland, and the Pacific islands.
Three million soldiers who had been overseas returned home to
find destruction beyond their wildest imagination. For as the US.
bombers had done their deadly work the soldiers had been fed
endless propaganda about the enormous victories and the inevita-
bility of Japanese success in the war. Damage was estimated at
more than 65 million yen—five times that of the Great Kanto
Earthquake of 1923. Some $20 billion in assets in the former occu-
pied territories was wiped out. The great effort that had produced
70 billion yen worth of war materiel lost in the struggle since 1937
had been for nothing. Japan had to provide for a population of 72
million where only 35 million had lived but seventy-five years
earlier at the beginning of industrialization.

Japanese who had lived through the nightmare of almost con—
tinual aerial bombardment in the last eighteen months of the war
were to face worse times in the war’s immediate aftermath. Pro—
duction of rice, due to all the domestic economic dislocations, had
dropped to almost half of what it had been during the war. There
were virtually no textiles, dependent as they were on imported
fibers. As the war ended, rice rations had to be out another 10
percent in July 1945 and deliveries were irregular. Caloric intake
was only 83 percent of what it had been in 1940, already low by
Western nutritional standards. There was such demoralization and
contradictions in policy that runaway inflation continued almost
without letup until well into 1946, when the brakes were finally
applied.

HONDA AND HIS DREABI 55

This was the economy and the home scene in which Ilonda was
trying to find his place, to put his mechanical genius to work again.
And he had chosen to do it with a maximum of independence, like
many Japanese cognizant of how far wrong many prewar goals and
methods of working had been.

His solution to the problem arose simply, almost matter-of-factly.

“I happened on the idea of fitting an engine to a bicycle simply
because I did not want to ride the incredibly crowded trains and
buses myself,” he says. “And it became impossible for me to drive
my car because of the gasoline shortage.”

Honda, with his great ability to improvise, started to use a small
gasoline-powered motor that had been utilized by the military
during the war to operate generators for radios, fitting it to a
bicycle. 'l‘ransportation, any kind of transportation, was desperately
needed. Railroads, the backbone of Japanese mass transit then and
110w, were incredibly crowded, operating with only a fraction of
their prewar rolling stock and often stymied for fuel. So Honda’s
makeshift motorbike was an instant success. Customers from all
over came to the little garage-plant that Honda had set up to buy
them. But soon the surplus military motors were exhausted. So
Honda decided to design and build himself a motor for the bicycle.

Honda’s father helped finance the new project by selling some
forest land. The former blacksmith himself was grimly working,
making and repairing pots and pans. But Honda was getting more
than borrowed money from the family. He got an added dividend
in advice; “Some of my relatives and friends had Opinions and
criticism about my going into the motorbike business. Some said I
should open a garage since the number of automobiles was bound
to increase rapidly in Japan. Some said that no one should be using
even a motorbike with the gasoline shortage. And since the motor»
bikes I had turned out were being used by people scrounging for
food, some of my critics even suggested that a motorbike ‘is only a
thing to be used by a black marketeer!’ In fact, that was the

HONDA: 'l‘IIE KIAN AND HIS LIACHINES S6

principal use of the motorbike; even my wife was using one to
travel the countryside to gather food for our family."

IIonda suggested that his product was necessary and important
for just that reason — it economized on the use of gasoline. In fact,
the machines he was producing were driven on all kinds of fuel,
mostly a resinlike substance produced from pine tree roots. These
improvised fuels sometimes meant the rider had to pump the
pedals for as long as ten or fifteen minutes before the machine
would fire and take hold. After the production of the engine Honda
had designed for the motorbike got underway, the fuel problem
remained. “I remembered that the pine resin had been used as a
substitute for aircraft fuel toward the end of the war. We bought
up some pine forest and squeezed the resin from the pine root,
mixing it with gasoline we bought on the black market. The mix»
ture gave off such a stench of turpentine that I could insist that
we were violating no gasoline controls by operating the motorbikes.
People came from as far away as Kyushu [the southern main
Iapanese island] and Hokkaido [in the far north] to buy our
mixture." No wonder that motor has gone down in company
history with the nickname “The Chimney.”

There was comic relief, too. One day when Honda’s people had
blasted a hole at the base of a pine tree to get at the roots and the
resin substance, the ammunition touched off a fire. It looked for a
while as though a forest fire were going to burn down the whole
mountain acreage. Honda would have been in great trouble if a
fire engine had not arrived just in time to help him and his ten
employees fight the blaze. The small band—including Honda’s
youngest brother, Benjiro, and Kiyoshi Kawashima, who today
heads the Honda enterprises—persevered, producing the bikes
and making the fuel. Honda decided that they had to switch to a
motorcycle, rather than a motorbike, because something more
sturdy and with a longer range was needed. Honda christened the
new machine “Dream" because, as he says, “I was trusting my

HONDA AND HIS DREAIU S7

aspirations, my dreams, to speed.” The first model was finally pro
duced in late 1949 and the occasion was toasted in doburoku, a
kind of raw sake. This was the machine that began the fabulous
parade of models and the vast production that has spread around
the world.

Honda’s files in Tokyo are filled with thousands of stories of
how his machines have been used. These range from shepherds
who use them for herding sheep in Australia to tales so bizarre that
they stretch credibility. They match the imagination and ambition
of Honda himself.

Take the story of the famous “Viet Cong Cavalry.” An Austra—
lian adviser to American military forces in Vietnam was awakened
on that fateful morning in February 1968 by strange, staccato
bursts of gunfire in the streets in the area where he was billeted
near the Saigon River, on the southern outskirts of the city. Putting
on his pants quickly, he climbed to the roof of the building. From
that vantage point he saw Viet Cong guerrillas, the advance party
of the groups that were later to fight in the streets of the Viet»
namese capital for days. They scouted the streets, carrying their
Russian—made submaehinc guns, riding I’Iondas they had bought
off the black market in Saigon—a kind of mechanized cavalry,
the advance guard of the infamous Tet Monton Offensive that
changed the history of Vietnam, Southeast Asia and the United
States.

But in 1949 the Honda operations that were to become synony»
mous with modern Japanese industry were still far away. True
enough, Honda could sell almost anything that he could produce
on his small assembly line. But, as he tells it, “since I found pleasure
in the fact that a thing of my own contrivancc was proving useful
and was appreciated by people, I was not paying much attention
to profits." Production had moved to about a thousand vehicles a
month. The customers were mostly small bicycle shops and black
marketeers, who were making quick money availing themselves of

IIONDA: ’l'Hl‘l I\1AN AND HIS XIACHINES 58

the confusion in the society and the economy. It was an unstable
market. Honda says that often when his collectors turned up to
get their money at the small bicycle shops, they found them closed
or bankrupt. In many cases the former owner’s whereabouts was
completely unknown. So while the enterprise had overcome its
technical and manufacturing problems, it was facing bankruptcy
since many of the products it sold were Just not being paid for.

It was then that the man who was to prove to be Honda’s alter
ego appeared on the scene. His name was Takeo Fuiisawa. He
remains to this day Honda’s most intimate collaborator and a
major force behind every marketing and manufacturing idea in the
company as well as a large contributor to many of the design ideas
that made the company’s fortune. But Fujisawa is a somewhat
mysterious figure. For one thing, he has chosen to be largely anony—
mous, almost unknown outside the company and the motorcycle
industry, although Honda on many occasions has said that the
success of the company would never have been possible without
him. He is a self-educated intellectual, priding himself on philo-
sophical discussions about the company’s policies — particularly on
personnel — that verge on German metaphysics.

From a young Honda executive before Fujisawa’s recent retire-
ment: “He sits home and thinks and then gives us orders. But we
don’t always understand him." In fact, like many Japanese of his
era (he is sixty-four years old), Fuiisawa has patterned much of the
company’s activities on German industry—0r as he sees German
industry. He is also a great admirer of German music and has
missed only one Wagner Festival at Bayreuth since the early 1950s.
He is also a great student of kabuki, traditional Japanese drama.
At the traditional annual arts performance by executives of many
of the largest Japanese companies, Fujisawa gives a professional
rendition of some of the famous oyama (female roles which are
sung by men in traditional Japanese theater).

Fujisawa recalls that when he was first approached by intermedi-

 
 

Eta“

Honda (left) and Takeo Fujisawa.

aries with the possibility of joining Honda’s small manufacturing
operation, his wife (now deceased) warned him that two such un—
conventional Japanese characters would never be able to hit it off.
And even to an outsider who knows the two men only superficially,
it is hard to imagine two men more different. Fujisawa tends to be
large, heavy, introspective, and a bit ponderous by Japanese stari-
dards. Honda is waspish, small, and gregarious, a born party man,
Fujisawa sometimes cloaks simple ideas in complicated language
that makes their meaning hard to get at. And Honda, contrary to
usual Japanese custom, is blunt, sometimes to the point of rudeness.

Yet for all their differences — and over the years there has been
a constant stream of reports in the Japanese press that their part—
nership was on the point of breaking up— there is little evidence
for anything but the closest collaboration. In fact, looking back on
the history of their working together, it is hard to conceive of how
either would have had a career without the other.

NOLLVHMHOQ HOJDW VGNOH

HONDA: THE MAN AND HIS MACHINES 6O

Fujisawa says that his best preparation for Honda’s activities
was not his wartime experiences in Japanese heavy industry, where
he was associated with the Nakajima Aircraft Company. Rather, it
was his upbringing that was important. Fujisawa’s father was a
talented man who never quite made it in the tens of occupations
and businesses he went into. The son remembers, from his earliest
childhood, learning how to answer the knock at the door to help
the family fend off creditors and bill collectors. He was well
acquainted with the kind of juggling that characterizes most
Japanese small enterprise, always undercapitalized by Western
standards, but particularly so for small and medium-sized compa-
nies such as Honda operated during the early years. Fujisawa was
brought to Honda by Hiroshi Takeshima, another wartime mem—
ber of the Nakajima aircraft stafi‘. Takeshima, as the “go-between”
in the “marriage,” continued to play an important role in the
relationship between the two men and in the company that was to
emerge after he went into the all-powerful Japanese Ministry of
International Trade and Industry (MITI). In the Japanese scene,
MITI combines the regulatory functions of the US. Department
of Commerce and the Interstate Commerce Commission, the
antitrust functions of the Department of Justice, and the promo-
tion features of the British Board of Trade. At crucial moments to
the Honda enterprise, 'I'akeshima presided over the section of
MITI charged with regulating affairs in companies in the category
of Honda's early manufacturing efforts.

Honda accepted the proposal for Fujisawa to join him with
alacrity after a quick first meeting. He had always realized his
deficiencies in finance and marketing. More important, like few
of the towering figures that have dominated some of the more
successful post—World War II Japanese companies, Honda works
as a member of a team and recognizes that some of the most
important members of any such cooperative group must have quite
difierent talents and personalities than he. “I have always felt that

HONDA AND HIS DREARI 61

a person who cannot mix with people of diHerent temperaments is
rather a useless person,” Honda says. “'lherc are cases of companies
being managed exclusively by blood relations who run the compa-
nies as they want. But talents should be sought far and wide. An
enterprise operated exclusively by blood relations will not grow.”
Whether by their stated design or by happenstance, neither Honda
nor Fujisawa have children in the company, and it seems quite
clear that there will be no passing on of leadership in the firm to
family members. Although Honda’s youngest brother, Benjiro,
played an important role in the early days of the company, he, too,
is no longer directly with Honda’s company, but operates a spe—
cialty metal—working company of his own which does, however, sell
to Honda.

Honda and Fujisawa, named director in charge of sales, opened
an office in Tokyo in March 1950. The move marked the transfor—
mation of the company into a modern enterprise. 'l'okyo was
emerging as the center of Japanese finance and manufacturing,
replacing Osaka’s prewar role as the commercial capital. Honda
says he moved up to Tokyo from Hamamatsu partly because he
was tired of small—town gossip—from the complaints about his
red shirts and shop clothes to the fact that he thundered home on
a motorcycle at two or three in the morning, often full of sake.
These complaints and gossip were beginning to annoy his wife as
well. Besides, he says, he felt that the sleepy spirit of Hamamatsu
had something to do with product design. rl'okyo was recovering
from the devastation of the war and the spiritual disaster in its
wake, and was again a stimulating place to be.

By September 1950, the company had completed a plant at
Kami—jujo, in northern Tokyo, and Honda was ready to set to work
in high spirits. Fujisawa filed an application with MITI for per-
mission to start up production at three hundred motorcycles a
month. MITI was horrified. How on earth, the officials said,
would it be possible to sell that many motorcycles? Furthermore,

HONDA: THE MAN AND HIS AIACHINES 62

there was a suspicion that Honda was really after a larger gasoline
ration by inflating his manufacturing targets and would sell the
surplus gas on the black market. But, as one official was quoted as
saying, “even if that is the reason, his conduct borders on insanity!"

Meanwhile, both Honda and Fujisawa went their way, seeking to
solve their problems. Fujisawa looked into the matter of Honda’s
distribution system and was shocked to learn that there were less
than two hundred bicycle shops and other distributors of Honda’s
product. He sat down and wrote a letter to a list of eighteen thou-
sand bicycle shop—owners in the whole of Japan. The letter is a
classic example of Japanese business technique, a bit romantic but
eminently practical and using good sales psychology. Unfortu-
nately, the text has been lost. But as Fujisawa remembers it now,
he wrote to each of the owners in the most personal vein, some-
thing like this: “Less than a hundred years ago, your father saw the
first bicycle brought in from the Western countries. He knew little
about it, nor how to ride it, how to make it, how to deal with the
simplest problem — even how to repair a puncture. But he learned
to do all those things, and he learned to do them well. Because of
that spirit of Japanese resourcefulness, he was able to make a com-
fortable living and left you with a bicycle shop and a way to earn
your living. Now we are launching a new product. It will be a
motor-driven bicycle. You have hardly seen one, and you do not
know how to sell it or how to repair it. But we intend to help you
learn to do both." The letter worked. Fujisawa, almost overnight,
set up a distribution network of some five thousand dealers on the
basis of the replies he received. And in a day when Japan’s largest
manufacturers were largely limited to regional distribution and
sales in their own manufacturing areas — the large national distri—
bution networks (except for one or two products) did not come for
another decade — Honda was well ahead with a modem system of
distributors and repair agents. Honda still prides himself particu—
larly on the latter for both motorbikes and automobiles.

HONDA AND HIS DREALI 63

Meanwhile, Honda was pursuing the problem of a better tech-
nical product. The first fruit was the new E-type engine with four
cycles instead of the two-cycle engines that he had built previously.
The first run of the new engine was held July 15, 1951. Honda and
Fujisawa set out along the famous Tokaido—the ancient road
that leads from the former capital of Kyoto to Tokyo, a road which
has been the setting of so much Japanese history, song and paint-
ing. Honda chose the mountainous area of Hakone, one of the
beautiful passes leading from eastern Japan to the southwest, for
the test. The motorcycle driver was Kawashima, now president of
the company, chosen since he had played a large part in the design
and construction of the vehicle. Honda and Fujisawa followed
Kawashima in a car with Honda driving. But the former racing
driver had a hard time keeping up with the motorcycle. Few
motorcycles built in Japan could negotiate the tough Hakone
Pass in those days, but the new model went straight up over it at
good speed. The engine did not overheat either.

“We managed to catch up with Kawashima—san after a while as
he was taking a rest on the mountaintop, at a point which corn‘
mands a glorious view of Lake Ashinoko on the slopes of Mount
Fuji. A torrential rain was coming down, matched by the tears of
joy in our eyes, as we stood around the motorcycle.” Kawashima,
in recognition of his role in the new design, was made a director
of Honda Giken at thirty-four, an event in Japan where company
directors are rarely less than fifty. Honda had his “Dream.”

7

 

 

Toward a Special Role

YET, ALTHOUGH HONDA and his men had proved that they could
produce a motorcycle of their own design which was powerful and
efficient, demand for the Dream was moderate. The machine was
heavy, even with the E-typc engine, and it was expensive. And
perhaps even more important, the motorcycle was a product de-
signed for a relatively small group of enthusiasts — people who got
a thrill out of the two—Wheeler’s performance and belonged to the
very exclusive cult of motorcyclists.

“I racked my brain to contrive a two-wheeler with an engine
which would be in great demand,” Honda says about this period.
“The conclusion I reached was that I must make a motorcycle

TOWARD A SPECIAL ROLE 65

which would be able to substitute for the bicycle, which was
enjoying overwhelming popularity in Japan in those postwar days.
The design which had been used on the motorcycle was not only
heavy but low in gasoline efficiency—since it was really only an
improved version of the communications apparatus motor we had
originally bought from the military."

Honda now set out to design a smaller engine on his own. The
model he came up with was called the Cub. “I had always felt that
a design was something that could be put together only by artists.
But 110w I’m inclined to think that is not necessarily true. In my
apprentice days, the fashion of restaurant waitresses in Tokyo was
to wear a white apron and do their hair in an ear-covering style.
But if a woman should walk along the Ginza in such a fashion
today, she would not only look too classical but she would be taken
for a lunatic. VVhat I am trying to say is that a design, unlike a
piece of art, has no value in terms of the past or the future — that
the importance of a design is whether it is appealing to people
today, now. And if a design is a thing that I thought it was, I
reasoned even I could work out designs. I was also conceited
enough to think that I understood the minds of people, better
than others sometimes, thanks to my wide-ranging, pleasure—
seeking activities such as drinking in the stalls with all kinds of
people.”

VVhatever the merits of the philosophy, Honda appeared correct.
The small engine — either on the red and white Honda “auto—bai"
or as a clip—011 to bicycles —was a roaring success. Its merits were
recognized by the industry and government circles seeking to push
Iapanese development. And in 1952, Honda was chosen in the
Emperor’s New Year's Day honors list for a blue»ribbon medal for
his achievement. The award almost never came off. Honda was
told by the ultra-protocol—conscious Imperial Household Agency
that he must turn up for the ceremony in formal white tic, which
is required at any serious Japanese social occasion. But for Honda,

HONDA: THE MAN AND HIS MACHINES 66

who at that time did not even have a business suit of any kind, the
suggestion was preposterous. “I told the MITI oflicial who called,
‘Nonsense. The cutaway is not the only ceremonial dress. For
people like myself, work clothes are a fine ceremonial dress. If you
insist 011 my wearing a cutaway, I don’t want to receive the
medal.’ ” Between the MITI officials and Fujisawa, who borrowed
an outfit somewhere, Honda was persuaded to attend and in full
regalia. “I looked pretty nice in the souvenir photograph taken at
the time —~ I did not look like I was wearing a borrowed cutaway,”
Honda says now with a big grin.

After the ceremony, Prince Takamatsu, one of the emperor’s
younger brothers, held a dinner party in honor of Honda and the
other recipients of citations at Korin Kaku, one of the Imperial
Household Agency palaces. Prince Takamatsu, telling Honda how
much he appreciated his work, said: “It must be an extremely
exacting task to invent or contrive something.” Honda’s reply was
an important part of his philosophy about himself, which he has
tried to graft onto the company he founded: “Although Your
Excellency might take such a view, I don’t really find it very
exacting because I am doing what I like to do. As the proverb
goes, ‘Love shortens distances.’ A person who is trying to invent or
contrive something new is enjoying himself although he may
appear to others to be having a hard time. The medal was the last
thing I expected to win.” Honda also endorsed Takamatsu’s state—
ment that evening that there should be a greater representation of
young people at such gatherings acknowledging national achieve—
ment. Honda, who was forty—six at the time, was the youngest by
far of all the recipients.

He has combined this concept that people work best and most
productively when they are doing what they like, and that youth
must be rewarded as well as age — not part of the Iapanese ethic -—
into precepts that are repeated constantly in his factories in slogans
and exhortations to workers. It may be some exaggeration for the
Honda slogans to say, as Honda himself often does, that young

'I'OVVARD A SPECIAL ROLE 67

men joining the company should understand that they are working
first for themselves and second for the company and that they
must do something that pleases them. Those kinds of statements,
as cliches at least, are repeated in almost any American company.
But in Japan, a society that demands before anything else total
group loyalty and discipline to common objectives, even to say
them is revolutionary. These slogans, combined with the wide
publicity that has been given to Honda’s own personal proclivities
for informality, the recruitment until recently of workers and even
executives primarily from industrial high schools and workshops,
and the fact that as a motor industry, the company’s activities are
in the forefront of Japanese modernization, go a long way to
explain that certain diflicult—to—define quality that has set Honda
apart from most other Japanese companies.

By 1953, when Honda had built his first modern plant in Saitama
prefecture near Tokyo, the design of the new, postwar Japan was
beginning to take shape. In February 1949, Joseph M. Dodge, a
Detroit banker who had already played a significant role in
attempts at German reconstruction, arrived in Japan to advise
General Douglas MacArthur 011 economic problems. “'llie Dodge
Line” set out to accomplish several things: It helped halt the
inflation by establishing counterpart funds which could be used
to fund the deficits of the Japanese government from the sale and
use of American relief commodities, mostly food. It pushcd the
establishment of a balanced budget, as fiscal policies of the
Japanese administration had been one of the chief causes of
the inflation. And by stabilizing the currency— and at an artificially
low rate to the dollar—it afforded the opportunity for Japan’s
export industries to begin to think again about foreign markets.
Implied, too, in much of this, although it was not to become evi—
dent until the Communist attack on South Korea in the summer of
1950, was the abandonment of the American policy which looked
first to retribution. Its aim had been to prevent any possibility of
Japanese military resurgence through a reorganization of Japanese

HONDA: THE MAN AND HIS MACHINES 68

economic structure. A new policy in favor of getting the economy
moving again as soon as possible was taken without fanfare. With
a certain kind of inevitability, the Japanese were allowed to go back
to ways of doing business which they understood and which had
built the country into an industrial power in the short period of
industrialization since the late nineteenth century. The merits of
US. policy then, and during the whole Occupation, will be argued
with hindsight by historians and economists for centuries. But it is
obvious now that behind the Dodge mission and its policies was
the impetus of an American government and people no longer
willing to continue without deadlines a policy which put the load
of supporting a crippled Japan on the US. taxpayer.

Honda and Fujisawa, although still playing a very minor role in
Japanese industry, were invited in 1951 to participate in a private
meeting with other Japanese company officials to search for a
policy of incentives for Japanese exporters. Honda refused to
attend. And it was then, perhaps—although given his eccentric
character by Japanese standards, it was probably inevitable —— that
he began his career of aloofness from the powerful politicoeconomic
business organs that direct the Japanese economy and Japanese
life. The Keidanren (Japan Federation of Economic Organizations),
the Nikkeiren (Japan Federation of Employers), and the Keizai
Doyukai (Japan Committee for Economic Development) are the
towering giants in whose councils and in whose subcommittees
much of economic policy is actually made jointly with government
in a fashion unknown in any Western capitalist economy except
perhaps in wartime. Below them lie a welter of manufacturing and
marketing and export trade associations whose powers, although
vaguely defined in law and statute by Western standards, are often
said to give the Japanese a controlled economy that may rival the
kind of “command” economic features which exist in the Commu—
nist countries.

Westerners, particularly Americans, looking at this maze of
decision-making in the Japanese economy— which so often defies

T0\VARD A SPECIAL ROLE 6C)

analysis as to where private industry discretion leaves off and gov
ernment direction begins — have marveled at how it works, or why
it works. It is particularly hard for Americans to understand. The
US. government and American business square off in a continuing
feud which makes such close cooperation, particularly in interna-
tional business, almost impossible. And, therefore, when US.
Japanese competition gets rough, Americans often resort to name-
calling with their Japanese counterparts. The favorite and most
publicized image is to call the unique Japanese system “Japan,
Inc.”—intimating that all Japanese society is malevolently and
cleverly designed to meet foreign competition. Even someone like
Pakistan’s Prime Minister Zulfikar Ali Bhutto, who as a Sindhi
belongs to one of the oldest and most aggressive merchant com-
munities in southern Asia, coined the label “economic animal” to
describe the aggressive Japanese business activity in his part of the
world. It’s an accusation which the Japanese accept in its implica—
tions but which they really cannot understand.

The facts are quite different. Japan is not the monolith it has
been described as. Japan’s business interests — if for no other rea—
son than their very complexity, arising from its being the world’s
third largest industrial economy with all that entails — are not al—
ways parallel. And sometimes the consensus that is demanded for
Japan to move on an important policy isn't arrived at and nothing
is done or an important decision is postponed with appalling re-
sults. But it is true that few Japanese businessmen or companies
have flouted the principle that they must conform and fit into
the pattern of consultative decision/making. And most smaller
companies, as they have grown, have been proud rather than
reluctant to take their place on the appropriate rung in the care—
fully circumscribed hierarchy of the associations headed by the
Keidanrcn.

Honda and his people refuse to speculate on why they do not
play a significant role in these organizations—even though the
Honda Company's overall role in the Japanese economy is impor-

HONDA: THE 1\IAN AND HIS MACHINES 7O

tant. And in fact in the crucial reconstruction days it was critical.
(For example, by 1965 Honda was the ninth ranking exporter in
Japan—earning some $120 million in foreign exchange for the
country with its products.) One reason is probably that neither
Honda nor Fujisawa have felt at home in these higher Japanese
business circles, dominated even into the 1960s by university—
trained veterans of the huge zaibatsu companies which ruled Japan
in the pre—VVorld War II days and which continue in a looser but
equally powerful grip to control most of the country’s commerce.
Thus the crowning irony of Honda’s life: Honda, whose views of
life and work and people are so highly political in a catholic sense,
is probably the least conventionally political of all major Japanese
businessmen.

“In 1951,” Honda explains, “a group of private business enter-
prises held a meeting and decided to ask the government to adopt
measures to promote exports and discourage imports to Japan. I
did not participate in the meeting because I felt strongly that we
should not choose the easy path of asking for the government’s
help. Our problems had little relation to government. In my opin-
ion, the problem was one which had to be solved absolutely by
our own achievements in the technical field, That is to say, if
Japanese technology were good and Japanese products were high
in quality, then the Japanese would not have to import foreign-
made products. Exports of such high—quality products would have
to be increased without the help of the government. It was at that
moment that I resolved to prove that high-quality goods know no
national boundaries. I resolved to discourage imports and promote
exports by enhancing technology and developing engines that were
the highest in performance in the world.”

But Honda found that high-quality products could not be pro-
duced without tools. A Japanese saying was quoted at the time:
“Kobo [a famous ancient priest who was noted for his calligraphy,
the writing of Chinese ideographs] does not complain about his

'I'O‘VARD A SPECIAL ROLE '71

brush." “Maybe so,” says Honda, “if it is a matter of calligraphy.
But in this age when technology is continually advancing, it is
necessary to have good tools to make good products. No matter
how good an idea you have, you are stuck with it unless you have
the tools to realize it. So I wanted good machines from abroad.
At that period aid from the United States was being used dispro-
portionately for nonproductive consumer goods, such as food and
luxury products like coffee, whiskey and cosmetics. My feeling was
——and perhaps it is too sentimental of me to say it — that even if
our company went bankrupt after importing production machine
tools, this did not mean that I was squandering the foreign re—
sources of the people because the machines, themselves, would
remain and would be working for the people no matter what hap—
pened to me. At any rate, I thought that Japan would be swal—
lowed up by the worldwide tide of economic liberalization and
competition if it remained behind without doing anything to
maintain its competitive position, that there was only one decision
for Japan to make: Either to bring about its own destruction by
turning its back on the progress of the world or to dare to chance
survival by importing up-to—date machinery. And I chose the
latter."

Thus, with a capital of only 60 million yen — or about $165,000
— Honda went off to liluropc and the United States on a machine
tool buying spree. He bought a total of about $1 million in tools!
He and Fujisawa financed these purchases by giving notes on short
time, hoping somehow to squeeze payments out of their slow—
paying customers, kiting bills and cutting corners wherever they
could. If all this seems total fiction to an American reader, he must
remember the peculiar nature of Japanese corporate finance which,
although it bears the same nomenclature and much of the formal
organization of Western capitalist finance, is so different in quality
as to be almost another system entirely.

Japanese industry was built almost from the beginning from the

HONDA: THE LIAN AND HIS IVIACHINES 72

top down. There are savings only at the level of the individual—
at a high ratio unknown in other countries, averaging 16 percent
in much of the postwar period. These are passed back to the gov—
ernment in large part through the huge postal savings system. The
postal savings system pays rates of interest generally higher than
commercial banks. These go into a supersecret government reserve
fund. The government, in turn, funds the government enterprises
and scmigovernment banks which fund the commercial banks.
Ratios of deposit of savings in the commercial banks to loans has
traditionally run in almost inverse proportion to that of most
Western banks. Banks lend to companies in ratios to their invested
capital in almost the inverse of that of most US. companies. In
no small measure, this explains why Japanese companies follow a
pattern of establishing new plant capacity on the basis of expan—
sion plans which rarely rely on market survey estimates, or indeed,
sometimes with no market experience. When the production is
successfully forthcoming — the historic problem for a country like
Japan, late in industrializing—then markets are sought, often
markets which may be unprofitable or only marginally profitable
but which permit the continued expansion of the plant and there-
fore the lowering of unit cost and thereby growing efficiency. It is
at this point that many a foreign observer of the Japanese eco-
nomic sccne shakes his head and says it cannot work but, reluc—
tantly, admits that it does, or at least that it has for almost a
century.

Honda and Fujisawa took special precautions, of course, to see
that their plans would produce the desired effect, a wholly modern
and up-to—date plant for producing a new vehicle which both be—
lieved would be revolutionary in Japanese life and would have an
enormously growing market. They might have gotten away with it
but for one thing: the end of the Korean War. The war had given
an enormous fillip to the Japanese economy. Rightly or wrongly,
it had permitted much of the old Japanese economic know-how

’I‘O\VARD A SPECIAL ROLE ‘73

to erase fumbling American attempts to reform the zaibatsu econ—
omy. It had suddenly provided an enormous market for heavier
Japanese goods through U.S. “offshore" procurement in Japan.
All this came to an end. Japan along with the rest of the world
went into a serious recession. And Honda couldn’t pay for his
machines.

But, in that curious run of good luck that seems to have followed
Honda all his life, he was saved and saved by the archrepresen—
tative of the traditional Japanese big business world which he has
positioned his company and his life against. When the Honda
group came up to Tokyo in 1950, Fujisawa went looking for addi-
tional banking facilities beyond those they had had in Hamarnatsu.
He went to the branch office of the giant Mitsubishi bank in
Kyobashi, “big daddy” to the whole Mitsubishi zaibatsu. His re—
quest to deposit money was forwarded to the head office where
Fukuzo Kawahara, then managing director, examined it. Kawa«
hara, too, is of an unusual breed. He might have languished all
his career as chief of the Mitsubishi bank’s personnel section had
it not been for the Occupation “decartelization” policies. The
Occupation authorities had lopped off the top echelon of the bank
in the process of purging the industrial complexes' leadership, an
effort to destroy the old direction of the zaibatsu banks which had
been at the heart of the prewar and wartime cartels. Kawahara had

 

moved up quickly in the postwar period. “7 hen the Honda request
came, knowing that the deposit of 200 million yen that Fujisawa
was offering meant that in the long run the bank would be asked
to loan ten times that amount to the small company, Kawahara
asked the two principals in the Honda company to come and sec
liiiii.

Kawahara, long since retired from Mitsubishi and a financial
adviser to Honda for a decade, recalls what happened: He had re-
served the most elegant of the guest interview rooms at the Marn-
nouchi bank headquarters, still a monument to those peculiar

HONDA: THE {\IAN AND HIS MACHINES ‘74

Japanese copies of Victorian—Renaissance splendor in the City of
London and saved from the World War II bombing, Eyes turned
and the staid conservative atmosphere of the bank was disturbed
when Honda arrived in his usual “jumpah” (shopcoat) and billed
mechanics cap along with Fujisawa, more suitably dressed, for
the interview. That might have been enough to end any busi-
ness relationship for another more conventional Mitsubishi official,
but Kawahara, himself a product of a recent rapid rise to emi-
nence, talked with both men and was impressed. He recalls now
that when he asked Honda if he was building the company for his
sons and offspring in the future, both Honda and Fujisawa replied
that they were not. They told Kawahara that they were both from
poor families, both had little formal education, and that a suc—
cessful manufacturing venture on their part would be evidence of
the huge potential among lower-class Japanese to exploit the new
possibilities which the postwar period had opened up and which
seemed to be the aim of the new Iapan under US. direction.

A few years later, when the crisis came, Kawahara supported
Honda and Fujisawa against those in the bank who wanted to
foreclose on their loans Even more important, he held out against
pressure from the then automobile division of Mitsubishi Iuko
(Heavy Industry), a member of the prewar Mitsubishi zaibatsu
family, which has tried several times in the postwar period to per—
suade Honda to merge his operation with theirs. Kawahara says
he held out because he had decided that F ujisawa was a man
of financial genius—if one who sometimes overreached himself.
Honda’s firm at the time, he said, was in deep trouble because of
its cash flow, but outstanding debts covered their purchases abroad.
And furthermore, the machine—tool purchases that Honda had
made were of excellent equipment which could be sold if worst
came to worst. And there was, in an extremity, the third alterna—
tive of forcing a merger with the Mitsubishi group. It was a pos—
sibility that he, Kawahara, never considered, he says, because he

TO\V:\RD A SPECIAL ROLE 7S

knew that neither Honda nor Fujisawa could have functioned in
the kind of close cooperative working arrangements that were
required in the zaibatsu system.

It took six months, but Honda and li‘ujisawa squeaked through.
Fujisawa, relying on his experience with his father’s snarled finan—
cial affairs, personally led a bill-collecting campaign. Employees in
the Hamamatsu and Saitania plants were asked to forgo the tradi.
tional Japanese six—month bonuses and to work around the clock,
in some instances, to push up production. Honda, too, had taken
special care to see that there would be little slippage between the
arrival of the machines and their use. Instead of waiting for their
installation, mechanics and foreinen in the plants were training for
them long before they reached Japanese ports.

The crisis was over, ushering Honda into a new and most im—
portant period in the company’s history. Honda had made it to
the big time on his own terms. Now the question was, could the
company produce and sell?

 

 

A Mass Market

IN JUNE 1954, two Japanese businessmen set OR for Europe from
Japan, If someone had been watching them throughout the
seventy-two hours it then took nonjet aircraft to fly down the
China coast, across Southeast Asia, through the Indian subconti—
nent, the Middle East, and on to Europe, he would have won-
dered what the question was that excited so much talk. The slightly
portly man with the sleepy eyes, tall by Japanese standards and
heavy—set, seemed to be pleading with the other, shorter, more
agitated figure dressed in brightly colored sports clothes.

Fujisawa and Honda were discussing one issue: Fujisawa wanted
a small, economical, easy—to-operate machine—a two-wheeler

A LIASS AIARKET 77

which would have almost universal application to Japanese trails—
port needs and yet consume only modest amounts of fuel. Honda
listened but was not completely convinced Fuiisawa says Honda
kept asking exactly what kind of design he wanted, and his only
reply was that he didn’t know precisely. The argument continued
all through Europe, starting in Hamburg, their first port of call,
where Honda was looking at machine tools. They dodged in and
out of small and big shops, looking at German and Italian scooters,
motorcycles, motorbikes, and three-wheeled cars. To each, as
Honda asked if that was what he wanted, Fujisawa replied no.

The men spent two months investigating what was happening
in the burgeoning European economies, aware that European de-
velopments in life-styles and design were a decade or less ahead of
Japan, that what they should manufacture in Japan would be dic—
tated at least in part by the changes they saw in Europe. The
requirements for the new vehicle were laboriously arrived at: The
new machine must be practical, something that everyone who
needed cheap transportation could use. That ruled out the heavy,
large-engine motorcycles which were expensive to operate. It must
be light and maneuverable, able to be of use in Japan’s tiny back
alleys, even by a farm housewife on unpaved ricefield trails. That
ruled out the then popular but clumsy Italianstyle scooters which
had been introduced into Japan, produced by Japanese companies.
It must have a small but powerful engine— Japan, like the Euro-
pean countries, had regulations which made operators’ licenses and
operating permits difficult to get and fuel expensive for anything
with larger-capacity engines.

Honda worked over the idea, helped by a unique work pattern
that he had launched early in his career in manufacturing. He set
up task forces which drew men from different parts of his opera—
tions to undertake the solution of particular problems or to come
up with a particular design. This principle of drawing men from
all over the company to one job was then virtually unknown in

IIONDAZ THE )IAN AND HIS lVIACIIINES 78

Japanese factories, highly bureaucratic like all Japanese society. It
took more than three years to get the new product into manufac—
ture. But when it was launched, it turned out to be a revolutionary
vehicle—the 0100 Honda, called the Super-Cub in Japan, but
known throughout the world and to Honda’s competitors as a
“step—through” motorbike. It was to become one of the most fa—
mous transportation devices in the world, rivaling, in its own way,
Henry Ford’s Model—T automobile. (By the end of 1973 some nine
million had been sold by Honda alone; perhaps another 10 million
imitations by Honda’s competitors worldwide.)

The Super-Cub had been designed not for the young, daring
speed-demon in the motorcycle field. It was meant for the man-in-
the—street, his wife and his kids. For millions of people around the
world, it opened up the possibility of low-priced, easy—to-ride, cheap
transportation. There was considerable argument inside the com--
pany as to whether the move toward the design was right. Could a
machine be sold to a nontraditional two—wheel market? The corn-
pany laid down a saturation advertising campaign and on August
1, 1958, launched the new product in Tokyo. The first day’s sales
totaled $140,000 in the Tokyo showroom. That convinced the
skeptics.

Its sensational success was based on the fact that it was a ma—
chine almost anyone could ride. Honda had made it relatively
light and small —- the first models had a 50cc capacity engine. The
bar located on most motorcycles and adults’ bicycles, between the
handlebars and back under the seat, was removed in the fashion
of the 1930s American girl’s bicycle. That permitted the rider to
stop short and put his feet on the ground; it permitted a Japanese
delivery boy, for example, to fit a platform on the back arid——
suspended and seated on springs so that the curves would not tip
it—carry vast numbers of bowls filled with the traditional Japa—
nese soba, buckwheat noodles in broth. Its engine was mounted
high under the bicycle—style seat and could be cooled by the

A MASS BIARKET 79

breeze instead of overheating, as did so many scooters that had
their motor located in a box under the seat over the rear wheel.
It took Japan by storm. Within a short time it had virtually
eclipsed the product of some fifty other Japanese motorbike and
scooter 111a11ufacturers, including the powerful Mitsubishi Juko and
Fuji Juko, both of whom had been doing well with a Japanese
version of the Italian scooter.

When Honda produced the first stepthrough motorbike in
June 1958, other Japanese producers were still in a relatively primr
tive design stage. Honda’s vehicle not only revolutionized his own
company, but established an industry in Japan which within the
decade dominated the whole world's business in that field. The
step—through vehicles became the prototype for all the major Japa—
nese companies. By 1972, of the total of 6.5 million motorcycles
and scooters manufactured in the non—Communist world (Czecho—
slovakia, a major prewar motorcycle producer, made less than 500
vehicles in 1971), more than 3.5 million were made in Japan. In
1972 Honda produced 1,873,893 motorcycles, of which 1,240,000
were exported. In 1974 total production was boosted to over 2
million, with 1.4 million exported. Production grew at such a pace
that less than a decade after its inauguration—in April 1967—
Ilonda could celebrate the production of the five millionth step»
through vehicle, now powered by 65cc and 90cc engines as well as
the 50cc.

\Vithin two years, Honda had opened at Suzuka near Nagoya,
the heavy-industry capital of Japan about halfway between Kyoto
and Tokyo, the largest motorcycle factory in the world. By 1968
the Honda plants had produced 10 million machines — compared
with a prewar total of 4,000 motorcycles in all of Japan by all
companies. Honda’s introduction of the 50cc machine touched 0ft
an explosive demand for motorcycle transportation in Japan. By
1960, all Japanese companies were producing more than a million
vehicles a year, but only four years later this figure topped 2 mil—

 

 

Hondas coming of} the production line at the world’s largest
motorcycle factory in Suzuka, Iapan.

NOLLVHOJHOD 30.10,“! VGNOH

NOLLVXIOJHOD uoww VGNOH

 

Honda at the Suzuka factory riding the ten millionth Honda motorcycle

KOI‘LVHUdHUI) mun“ vumm

HONDA: THE AIAN AND HIS MACHINES 82

lion. And by 1971 —- helped by heavy export demand — the figure
topped 3 million. This explosion of demand and production did not
come without vicissitudes among the producers, of course. Even in
1955, when Honda was preparing his socc step—through machine,
there were still some fifty manufacturers. But they declined stead—
ily—to thirty in 1960, eight in 1965, and finally to four in 1969.
That remains the structure of the industry today. The four manu-
facturers are led by Honda, with about 60 percent of total produc-
tion. Honda considers its most effective competitor not the No. 2
in the market, Suzuki, but Yamaha, whom Honda engineers be—
lieve is more enterprising and innovative. Kawasaki, the fourth
manufacturer, remains more important in the field of heavier,
more traditional motorcycles. All told, the four companies pro-
duced nearly 4 million vehicles in 1973.

In Japan, the Honda motorbike and the copies by other manu—
facturers that it spawned became the vehicle of the masses. In the
1950s and 1960s, it was a typical scene on a Japanese street to
see a motorbike loaded down with father, mother, and perhaps a
child or two with an infant stuck between the handlebars. It be-
came the standard method of delivery—for everything from
groceries to textiles and lumber and heavier manufactured goods.
But the phenomenon was soon to spread abroad as well. Honda
exported the first machines in 1956 — first to Okinawa (then under
US. administration and a dollar area), then to Taiwan, Hong
Kong, Southeast Asia, and Korea. By the end of the 1967 calendar
year, Honda had exported more than 2.7 million vehicles of the
10 million it had made to 135 countries around the world — about
half of them the step—through versions which had proven such a
popular undertaking.

But it was to be the US. market where Honda would have his
biggest impact abroad. The decision to go into the American mar—
ket was made after some complicated false starts. Originally,
Honda and Fujisawa had thought to enter the US. market through

A MASS MARKET 83

an American agent with wide experience in handling motorcycles
in the United States. Honda approached the agent, talking about
the possibility of selling 7,5co vehicles, which the American said
was ”a very appropriate figure. 'l‘here will be no trouble selling that
many motorcycles.”

“But as we continued to talk,” Honda remembers, “we noted
that there was some contradiction between what we were saying
and what he was saying. No wonder. \Vhat he thought about was
selling 7,500 motorcycles a year, while we were thinking that we
should sell 7,500 motorcycles a month. When the misunderstand
ing was cleared up, it ended with the agent turning down our
proposal. ‘Selling 7,500 motorcycles a month? That’s out of the
question. Preposterous!’ he said.”

Honda’s agent thought the Tokyo company’s figures completely
out of the question, for— in the late 1950s when the conversation
took place—the concept of the motorcycle was still the older,
pre—VVorld War II sports machine. The market was almost CK»
clusively devoted to high-quality but heavier machines like those
produced by Harley—Davidson and thc European manufacturers.
Actually, these motorcycles had been pushed aside, Honda felt, by
the popularity of the automobile, and since the 19303 had reached
almost a dead end in terms of development. “\Ve knew that more
and more Americans in those days [1962] were using motorcycles
for different reasons, to enjoy their leisure, not as a practical means
of transportation,” Honda says. “There was a small public that
loaded up the motorcycles into their cars, carried them to roads
too narrow for automobiles and places with no roads at all for
automobiles, then switched to their motorcycles to enjoy fishing
or other pastimes. So in my mind motorcycles had not really been
driven out of the market by automobiles, but had replaced the
automobile as an exclusively leisure vehicle.”

In June 1959, American Honda Motor Company, Inc., was es-
tablished in Los Angeles. Honda received permission from Japan’s

HONDA: THE IVIAN AND HIS MACHINES 84

Ministry of Finance to invest half a million dollars in it. One of the
decisions that Honda made at the time was not to stafir it with Japa—
nese nationals. “At first we talked about sending Japanese person—
nel to Los Angeles from Japan,” he says. “We thought for one thing
that work could be carried out more smoothly if it was done only
by the Japanese, as they would be able to understand one another.
But I was opposed to the idea. No good business could be ex-
pected of a company which could not anrd to pay American—
level wages to its employees in the United States. To pay Japanese-
level salaries to Japanese employees working in the United States
is exploitation. And it was not desirable to build ‘a Japanese town’
in the United States by sending Japanese employees there. My
stand was that so long as Honda was advancing into the United
States, it should employ people of the United States and be we]—
come by them." Again, if these statements sound almost a
non sequitur today, it has to be remembered that they are made in
the context of the Japanese business community, which has come
under pressure only recently—after a series of violent anti-Japa—
nese student and mass demonstrations in Southeast Asia —to
curb its instinct to create “golden ghettos” of Japanese business-
men and their operations abroad. One must also remember that in
1960, anti-Japanese feeling was still alive in California, a hangover
from World War II.

Kahaehiro Kawashima, one of the senior managing directors
who worked in the American company from the outset and in
March 1974 was appointed vice—president, said the first problem
that they found in the United States was the very low reputation
of motorcycles in the public at large. “Motorcycles were not for
the general public, and they were used in a special kind of way.
So the initial thing that we had to do was to change the image of
the motorbike. We decided to try to do that in two steps. Number
one, we would not rely on the then existing network for sales. We
decided that we had to go through more respected outlets —

A hIASS LIARKFXI' 85

sporting goods stores, for example—or set up new dealerships
through people who were already in business and capitalized
enough to take on a new product linc. Second, what we did was
to advertise our motorbikes through such popular and prestigious
magazines as 'l’ime, Life and Look. This was something absolutely
unprecedented; motorcycles had never been advertised in those
magazines. “’0 wanted to launch a campaign in which we told the
Americans that we were then the world’s largest producers of
motorcycles. The first question we got back from those magazines
was how would we prove that that was true, an indication of just
how unprecedented the whole approach was.

“So what we set out to do was to change the image of motor»
cycles, set up dealers who were acceptable to the community, to
the public, and at the same time to develop products that would
be purchased by the nicest people, hence our slogan, ‘You meet
the nicest people on a Honda.’ I believe that this is the basis of
the market we have today. And, of course, you cannot ignore other
factors: the offering of good service, a parts supply, the training of
mechanics, and — luck — naturally.”

Kawashima began in Los Angeles, but within three years the
company had a nationwide network in the United States.

By June 1968, Honda was able to celebrate its one millionth
sale in the United States by donating five motorcycles to the City
of Los Angeles in a ceremony with Mayor Sam Yorty. The presen—
tation was made on behalf of 1,600 dealers in the country, a
network that probably rivaled then and still rivals many foreign-
brand operations in the United States. And Honda’s share of the
total US. market was 46 percent by 1973. Honda’s success in the
United States reflects the aggressive nature of the company and
the salability of the product. but in a larger sense it reflects the
most significant postwar development in the Iapanese economy:
the enormous American market which developed for Japanese con—
sumer goods and consumer durables. Japan-US. trade blossomed

HONDA: THE MAN AND HIS MACHINES 86

for the Japanese in the postwar years, at first along what had been
prewar traditional lines: Textiles replaced the main US. sales
item, silk, in the prewar period. Japanese exports in 1955 totaled
$2.01 billion. About a quarter of these went to North America,
mostly to the USA. But by 1970, with the total at $19.32 billion,
$6.58 billion —or a good third—were reaching US. and Cana-
dian markets. In that period Japanese exports had grown 1.6 times
faster than world exports as a whole.

Economists are generally agreed that the reasons for this per-
formance were threefold: Japanese industries ——led by companies
like Honda—were quick to transform themselves into suppliers
of goods with an expanding market. Labor productivity, and not
just the widely touted cheap labor— for Japanese labor costs were
rising relatively rapidly in all this period—made Japanese goods
highly competitive. And, third, Japan had developed great exper-
tise in marketing her goods abroad — a great part of it through the
unique Japanese general trading companies, which Honda, how-
ever, chose generally not to use. Honda’s exports—which topped
$575 million in 1972, making it sixth among all Japanese compa-
mes—contributed heavily to the increasing value and trend of
Japanese goods toward heavy machinery and chemicals. From 1955
to 1970, machinery had moved from 13.9 percent to 65.8 percent
of the total export figures.

Honda had chosen to go its own way in the United States, to
research the market and sell its product through its own marketing
subsidiary in Los Angeles. In this decision it is in a distinguished
minority: Most Japanese companies have used the enormous re-
sources of the Japanese trading companies, undoubtedly the re-
positories of the best commercial intelligence in the world, with
fact-gathering networks rivaling the news agencies or the CIA.
Mitsubishi Shoji, the largest, handled a total of $10.5 billion in
sales in the period from October 1, 1972, to March 31, 1973. With
a dozen other Japanese trading companies, it accounts for an in-
creasingly significant part of world trade. One of the marks of the

A i\IASS BIARKE'I‘ 87

Japanese trading companies’ success has been their increasing role
not only in Japanese exports and imports, but in trade — especially
in commodities — not actually moving through Japan.

However, Honda did prove to be typical of Japanese manufac»
turing in one important way: Its capacity to produce its machines
soon overtook its sales ability. It happened so suddenly, in fact,
that it caught Fujisawa in Europe e11 route to his beloved W agner
Festival, which he had to abandon to rush off to Los Angeles. In
1968, Honda inventory in the United States reached staggering
proportions. The US. subsidiary had $80 million tied up in stock,
a half-million vehicles in inventory. Fujisawa talked the Los An.
geles sales force out of a large-scale discounted price campaign,
however, warning that in the long run that might hurt them even
more than their heavy inventories of the moment. “This drop in
sales owes to my inability to supply you with new models which
were neglected because of Tokyo’s self-conceit. Price-cutting won’t
work because the real problem is unattractive current models.
Don’t worry about the inventory —— somehow l'll manage to finance
it on my return to Tokyo—but keep on trying to sell until we
can get new models to you.” Fujisawa and the Los Angeles execu—
tives then launched a careful campaign, walking a tightrope
between unloading the inventory at lower prices and threats of
prosecution for anti—dumping law violations, to reduce inventory.
Factories in Japan had to slow down and at Suzuka there was even
a total shutdown.

Again, the fiscal problem created a spate of rumors in Japan that
Honda was 011 the ropes, that Mitsubishi bank would not bail the
company out again, and that merger with Mitsubishi was inevi»
table. Company officials are reluctant to talk a great deal about
what went on behind the scenes. But again Kawahara of the Mitsu-
bishi bank played an important role. Credits were extended, and
within six months the glut was dissipated and the company had
passed through the crisis.

But it taught Fujisawa and Honda one important lesson: They

HONDA: THE MAN AND HIS MACHINES 88

could not rest on their laurels. One innovative model would have
to follow another if sales were to continue to expand rapidly, par-
ticularly in the US. market with its emphasis on style and “trendi-
ness." That has been an important part of Honda policy ever
since. In 1973, for example, Honda produced seven new models of
the motorcycles alone, most of these with the US. market in mind.

9

 

 

Changing an
American Image

MATT MA’I'SUOKA is a iniddleaged, cheerful Japanese—American
with a winning smile—no hint that, like a lot of other Califor-
nians, his people were interned at the outbreak of World \Var II
as a “menace” to the United States in one of the most disgraceful
violations of civil liberties in our history. If you see him today in
the glass-encased offices of American Honda, Inc, at Gardena,
California, in what is obviously a very prosperous American busi»
ness scene, it is hard to recapture his first encounter with the orgaA
nization more than a decade ago. Matsuoka is now the director of
public relations for the vast Honda operations in the United States.

Laughingly, Matsuoka recalls how he got into the whole Honda

HONDA: 'I'IIE \lAN AND HIS BIACHINES 90

operation in 1962: He had come back after the war and started a
small export—import business. A friend, a Nisei lawyer (ni is second,
361' is generation, so Nisei are technically the first generation born
in the United States, although the term is applied generally to
Japanese-Americans), asked Matsuoka if he were interested in
hooking up with an aggressive Japanese business operation in
California. Matsuoka asked what the Japanese company was selling.
When the lawyer said motorcycles, he instantly, almost instinc—
tively replied, “No thanks ——not motorcycles.” Like most Ameri-
cans in those years, the very notion of the motorcycle carried bad
connotations, the idea of a rough, dangerous, and perhaps even
criminal world. “He’s a motorcycle type” was a phrase used about
someone who was at least shady, at best wildly irresponsible.

Matt says he filed the name and address that the lawyer friend
gave him in his wallet, never intending to look into it. A few
weeks later he was in downtown Los Angeles, saw a sign with
“Honda” on it, and decided that he would stop and see what the
whole thing was all about. Matsuoka says. it was still a fluke that
he stOpped —he remembers that there was no parking space near
the building, and had it not been that someone pulled out of a
space at just that moment, he probably wouldn’t have stopped at
all. “I guess it's like a lot of things that have happened with Mr.
Honda—~if that car hadn't pulled away, I wouldn’t have gone
with Honda. But the moment I walked into the office I felt an air
of excitement—you could see that something was going to
happen here. Matsuoka met the then Japanese manager of the
American headquarters, who immediately hired him to take over
the parts operation, giving him exactly two weeks to wind up his
own business.

“I started with seventeen people and within two years I had a
hundred and fifty people working for me. And average business
had grown from about $50,000 a month to $550,000 a month—
that was the rate of the expansion. Then Mr. Okamoto, the vice-

CHANGING AN AKIERICAN [MACE ()1

president over here at that time, called me in one day and said
that we had grown so much that he thought that we needed a
public relations department. I hadn’t had any public relations
background. But neither had I had any parts background before I
started that. It’s been fascinating for me. I have seen the change
in the image. I have seen the growth of the company. Everything
about the motorcycle industry has been exciting.”

What Matsuoka found when he started has been well put by
Hough and Setright, compilers of the authoritative History of the
World’s Motorcycles:

“The motorcycle started off badly, and has suffered ever since
from its self-imposed engineering limitations as well as from its
despised social standing. It is one of the most pleasing paradoxes
of the twentieth century that it has survived at all, to offer con-
venience and delight to new generations in the 1960s and to
experience the greatest of all its revivals; for motorcycling is prac-
ticed and enjoyed by more people today than ever before. . . . For
motorcycling offers a very special delight, a unique amalgam of
rigor and exuberance, the paradox of detachment from the world
and yet intimate engagement with it. The only comparable activity
is piloting a small, nimble, and open-cockpit aircraft at low alti—
tudes — and the opportunities for this today are negligible.”

rI'he motorcycle has always been, even though from time to
time it was abandoned by its enthusiasts here, as American as
apple pie. The first commercial vehicles that can be called the
ancestors of the motorcycle were built in 1884 by a Philadelphian
named Copeland. Copeland had taken up the idea, previously
developed in Britain, of fitting a steam engine to a bicycle. He
eventually attached one to a tricycle and produced and sold some
two hundred vehicles. Copeland’s experience also illustrates one of
the main problems that dogged the motorcycle from its earliest
days: It was often a bad mixture of already existing bicycles and
a test vehicle for power units, whether steam or internal com»

HONDA: THE IVIAN AND HIS IMACIIINES 92

bustiou. Rarely has it been a vehicle in the inventor’s eye which
borrowed from the other technologies to produce its own end
product.

The first practical gasoline engine was invented in 1876 by a
German, Dr. N. A. Otto. There had been internal combustion
engines based on exploding gunpowder, but it was Otto who re-
fined thc earlier idea of a piston driven by a mixture of air and
spirits of turpentine vaporized on a hot surface. His four—stroke
engine was further improved on by one Gottlieb Daimler, who
patented in 1884 a four-stroke engine with a horizontal cylinder
capable of 800 revolutions per minute. The following year he
patented a vertical version of the engine, which is the great-
granddaddy of all modern motor vehicle power plants. Daimler
also patented a bicycle construction that would carry his engine
and be propelled by it. This first true motorcycle was finally made
and a model of it still exists as it was actually ridden in November
1886 by another pioneer in automotive transport, Wilhelm May-
back. Mayback went on to invent the spray carburetor, and later
still developed the Mercedes automobile.

In England, meanwhile, a man named Edward Butler was work—
ing on parallel designs, and he might have gotten much further
had there not been such a public outcry against the whole idea of
machines. (A man with a red flag was required to walk ahead of
any self-propelled machine on the roads and byways until 1896,
thus delaying any commercialization of the inventions.) Daimler
went ahead in Germany, but he was devoting most of his time and
energy to four-wheeled vehicles. His experiments with bicycles
came about largely because the three- and four-wheeled vehicles
were too heavy to be propelled by his engines.

By 1899, while inventors continued erratically in England and
France, the first businesslike production and sale of motorcycles
powered by internal combustion engines were going forward in
Germany by the Hildebrand brothers of Munich. It was they, in

CHANGING AN ALIERICAN IAIACIC ()3

fact, who first designed a machine to be called a motorrad or
“motorcycle,” thus inventing the name. The Hildebrand brothers
and an assistant who worked with them, Alois \Volfmutter, built
a machine that could operate at 24 miles per hour; it was the first
motorcycle to look like the modern two-wheelers.

The greatest name of the era was the Marquis de Dion and his
partner Georges Bouton. De Dion and his group worked on all
kinds of cars and motorcycles and it was to their engine developed
in the late 1890s that France owed hcr dominance of the industry
lasting well into the next century. The De Dion company put a
large number of engines and motorcycles on the market, most of
them successful. In fact, De Dion and his group were copied by
all comers and they were reproduced all over the Continent. Yet
the fundamental problem of motorcycle design —as distinguished
from engine design — remained obscure: where to put the engine
on the contraption. Engines appeared all over the machines—in
front of the wheels, behind the wheels, on an outrigger behind the
wheels, etc. An American eharlatan appeared in England selling a
new machine to British investors with the right positionng idea,
in midmachine, but it all ended in a gigantic scandal involving tens
of thousands of pounds. One small British motorcycle did appear
which had an engine mounted into the lower bracket of a bicycle
frame, the design of most modern motorcycles, but it was largely
ignored. Despite the flood of designs and promotions, the motor-
cycle excited little enthusiasm as the century closed. Fuel was
hard to get if not so terribly expensive. Carbide and water for the
acetylene lights were hard to come by. Vibration and bumping
were severe. The front fork over the wheels was rigid and often
snapped on rough roads. Tires had been made pneumatic by John
Boyd Dunlop in 1888, but they were highly inflated to carry the
heavy weight of the machines and often could not be relied on.

The clip-on motOr for a pedal bike appeared in 1897, remaining
popular in the Low Countries to this day. One manufacturer,

HONDA: THE MAN AND HIS LIACHINES 94

Minerva of Belgium, exported models to Britain and Germany
where they gained popularity. Two French brothers named Werner
not only produced a popular clip—on motor—bicycle, but in 1901
they produced a model that finally established the idea of in-
corporating the engine onto the frame instead of adding it on later.
In fact, they simply placed it where the pedals of a bicycle were
located, held in place by special lugs which clamped onto an
aluminum crankcase. The success of the Werner was sensational
and copied everywhere, for it placed the engine’s weight between
the rear and front wheels and low enough to lower the center of
gravity for the rider. It had a spray carburetor and lubrication was
with a hand pump, which the driver had to remember to pump
at frequent intervals. It had a rear brake operated by the driver’s
foot. It was the Werner which introduced the motorcycle races —
Vienna to Paris in 1902 — that were to become so much a feature
of the sport.

The Harley-Davidson Company, today the only American sur—
vivor in the industry, produced its first motorcycle in 1903, joining
a large number of small firms which sprang into existence on the
wave of popularity of the Werner. The Indian trademark, one of
the most legendary in American motor history, appeared on bikes
produced in Springfield, Massachusetts, by the Hendee Manufac—
turing Company. These two companies carried on a competition
over the next years that was to produce the classic motorcycle.
Between them they produced almost every design feature in the
years 1905 to 1916 later incorporated in modern machines in the
United States and Europe. Still, by 1919 motorcycling in America
had almost died, for the motorcar industry had learned the art of
mass production. A mass market for cheap cars had developed that
made the motorcycle seem overpriced and inconvenient to all but
the most adventurous. Only Indian and Harley—Davidson kept the
machine alive in the United States. Britain was to remain almost
completely dominant in the field over the next few years, both as
manufacturer and rider. British legislation restricting horsepower

CHANGING AN ARIERICAN IRIAGE 95

in automobiles, the weather, and the need for economies dictated
this. World War I and its demands for industrial production also
produced quantities of machines and tools, and in 1919 there were
more than a hundred British makers producing two hundred types
of motorcycles.

Motorcycle buEs look back on the period from 1926 to 1935 as
the golden age of the motorcycle. There were roughly three kinds
of bikes: the side-valve machines of moderate capacity, the sports
vehicles, and the heavy V—twin cylinder machines. The machines
were generally almost all hand—tooled, the prices were reasonable,
and above all else, the roads were just good enough and free of
traffic to make running motorcycles fine sport. In the United
States, the motorcycle had become almost exclusively an arm of
the law. In Britain, there were a large number of manufacturers
supplying a wide market, but the Italians and Germans were
creeping up quickly.

In fact, the motorcycle was to become an important artifact of
social history: In Germany they became symbols of the glories of
technology and adventurism that the Nazis glorified. Somehow,
too, it was appropriate that T. Ii, Lawrence, the famed and heroic
Lawrence of Arabia, should be killed in a motorcycle accident in
May 1935. More and more, motorcycling became synonymous with
racing, with high adventure, derringdo, with a romantic following,
Design followed this trend. By the mid-1930s, the motorcycle had
as much power as it could use. Spring frames were added to make
them more serviceable and able to apply brakes to the hack wheels
more effectively.

’The first post—\K’orld War II motorcycle show was held in Paris
in 1946; it was a show with most of the models displayed not actu
ally available. The French market was dominated by the Vélomo—
teur, the simple bicycle plus motor that still is a big seller as cheap
and convenient transportation in France and the Low Countries.
The Italians came into the transport market with their famous
scooters, which dominated the late 1940s and 1950s in Europe.

 

The first Honda ad designed by Grey Advertising for the American market.

But the so-callecl mainstream of motorcycles in Italy, France,
Germany, and Britain remained conservative, with models very
much like those of the 19303.

That was the US. and world motorcycle scene when Honda, the
new star, arrived on it in thc early 19603. From the beginning,
the company fought a continuing battle against the image of the
motorcycle as only a plaything of juvenile delinquents—what
Honda and Kawashima call “the black leather jacket set." In 1962,
Honda hired Grey Advertising in Los Angeles for what must have
been one of the most successful advertising campaigns in the
history of US. promotion. Grey founded their Honda program on
the belief that the primary resistance to motorcycle sales was not
based on the public’s lack of familiarity with the vehicle or the
alleged danger of riding them. The problem was the “social ac—
ceptance” of the two-wheeled vehicles as serious transportation for

NOLLVHOJHOO HOJDW VClNOH

CHANGING AN ARIERICAN IRIACE 97

the American public. Some of this, Grey felt, was an aftermath of
Marlon Brando’s \Vild Ones motion picture, some the reaction to
the “Hell's Angels"—type gangs which had terrorized some small
California towns. There was the general concept that anyone rid»
ing a motorcycle was, obviously, a member of the black leather
jacket and switchblade set.

So Grey set out in Honda’s ads to sell motorcycling, not Honda
per se. Grey’s ads featured illustrations of people in various rc—
spectable walks of life—students, housewives, businessmen, etc.
— with motorcycles. Illustrations (Grey felt that photographs were
too much “a slice of life") were used and a mechanical illustrator
drew them to be sure that the ads were technically correct The
theme “You meet the nicest people on a Honda" was the natural
outgrowth of the marketing strategy, (It was so successful that it
was later picked up and used in various languages by Honda
around the world, with its later corollary, “The nicest things
happen on a Honda”).

In 1964, the second year that they were broadcast commercially
on television, Honda purchased a quarter sponsorship of the an-
nual Academy of Motion Picture Arts & Sciences award telecasts.
Tokyo’s executives approved the huge budget even though it was
a staggering share of Honda’s whole promotional funds, especially
since it was for only two go-second commercials. But it brought
American attention as never before to Honda’s name. Proof that it
worked came the next day when Honda dealers throughout the
country reported their greatest traffic up to that time and brisk
sales to people whose first question was, “How do I ride it?” Ilonda
has continued to sponsor the show through the years, and today
is the largest advertiser of motorcycles on US. network TV. (In
1973 Honda and Grey won the 1973 “sweepstakes” medal of the
American Advertising Federation's competition for the best com»
plete campaign.)

Initial market studies which Grey conducted also showed Honda

HONDA: THE hIAN AND HIS NIACHINES 98

that the market for Inotorcycles was primarily a young one—— under
thirty-five years of age, with the heaviest concentration of potential
buyers in the sixteen (the licensing age) to twenty—four age group-
ing. But research also showed that the biggest opportunity for in—
creasing Honda sales lay in attracting new buyers, those who had
never owned a motorcycle, as opposed to pursuing the market
segment of already existing owners. Young people bought motor-
cycles, research showed, because of the initial low purchasing price,
the economy of operation, dependability, appearance, styling, and
performance. But most overwhelming was the idea of social ac—
ceptance and that is what Grey hit hard. The first advertisement
showed a group of ordinary but very presentable people in all walks
of life on a Honda. (So much has the campaign become a part of
American life that a cartoonist in the 19705 could show a boy and
girl astridc a motorcycle with the girl saying, “This is one nice
thing that is not going to happen on a Honda” and bring a belly-
laugh.) Grey was targeting not just the potential owner-driver but
his family, seeking parental and family acceptance of the Honda
as an acceptable means of transportation for a loved one.

By 1967, the campaign had been so successful that it had
attracted other japanese producers to the market and to similar
advertising campaigns. That brought on the second phase of the
campaign, which was to sell Honda rather than the generic idea of
motorcycling. Present targeting of advertising is still largely on the
sixteen- to twenty-four—year age group, who still buy 70 percent of
the motorcycles. The accent is on freedom, release and a feeling
of high performance which is illustrated with various riding posi—
tions~two people astridc, a man driving with a woman sitting
“sidesaddle” behind, a woman driving with a man behind. The
concept that different models in the Honda line are designed
specifically to meet the different needs of different riders is
attempted in portrayals of riders and motorcycles in all sorts of
activities.

CHANGING AN ARIICRICAN IBIACE 99

Recent major research has shown that the American motorcycle
market is far from saturated. Grey also believes that the Honda
pitch has been reflected in a generally more personalized feeling
of Honda owners toward their bikes than with other brand owners
— the kind of relationship that Volkswagen had in the 1960s with
its owners. Multiple ownership of motorcycles is beginning to
occur. And there has been a sharp upsurge in women riders—
something Honda is proud of since its advertising from the earliest
period has featured women prominently. But Honda was weaker
than other brands in off‘road machines designed primarily for trails
and sport use.

All of this research, however, preceded the cataclysmic energy
crisis of the fall of 1973 and the Middle East oil embargo. Overall,
Honda planners had foreseen a general leveling off of the world
motorcycle market. One problem had been the rising cost of motor-
cycles with a simultaneous lowering of the price of smaller cars and
minicars, at least in relative terms. At some point, it was thought,
a part of the general transportation market attracted to motorcycles
would simply move on to small cars; that was particularly the case
in Japan (where it already had happened) and in the developing
countries, where the cost of operation of any vehicle was much
more of a factor than in the United States or even in Europe.

Temporarily, at least, the energy crisis changed all that. The
sale of motorcycles skyrocketed, with orders for all brand names in
the United States far outstripping their supply. Honda, which had
cut back production by 26 percent in 1973, failed even weeks after
the oil crisis had faded to understand what an impact the oil price
increases as well as the continuing threat of oil shortages had made
on the United States. Furthermore, dealers repeatedly reported
one important curious psychological quirk: Customers, particularly
older men, were doing what they had always wanted to do, buying
motorcycles, using the energy crisis as the rationale to overcome
the still-lingering social disapprobation.

HONDA: THE MAN AND HIS MACHINES 100

The June 1974 issue of Motor Trend, one of the prestigious
magazines with a bull—management audience, featured an article
illustrating just this phenomenon: “The Man in the Gray Flannel
Helmet," subtitled “Is this the answer to America’s transportation
dilemma?” by Fred M. H. Gregory. What Gregory was suggesting
was that many people, not kids and not sportsmen particularly;
were finding the motorcycle the way to stretch their fuel econo-
mics. He gave as his illustration of the whole concept a group of
San Francisco executives — men in their forties and fifties, lawyers,
stockbrokers, advertising executives, architects and bankers— who
had taken an interest in motorcycling as alternate transportation
and had organized the Montgomery Street Motorcycling Club.
Gregory called it “a good—natured reaction against the image of
the vulgar biker prevalent among many of the club members’
peers.”

But Honda wasn’t abandoning the other end of the motorcycle
marketing spectrum, not by a long shot. In 1973, Honda intro—
duced two-stroke motorcycle engines, designed for expert use in
motocross racing, under a new sub—brand name, Elsinore, after
one of the famous European races. It was Honda’s first at—
tempt at the racing market, per se, for many years, and it excited
considerable interest, including the citation by Motorcyclist Maga—
zine, the Bible of racing, of the Elsinore 250 as the “Off—Road
Motorcycle of the Year” in 1973. A Honda team began riding
in the major motorcycle contests around the country with con—
siderable success. Honda promised they would take part in every
important event. These would include motocross racing, short-
track competition, trial competition, desert racing, and endur-
ance competition. What's more, the company was building a
special “works bike" to challenge all corners in the open-class
motocross category.

Honda met the demands of the public — particularly the highly
individualistic motorcycle public—for a wide choice of designs,
in 1975 producing some thirty models.

CHANGING AN ASIERICAN INIACE 101

The four-valve Honda motorcycle engines, produced early in the
company’s success, were based on a very simple principle: You
could cut the base of the cylinder in half, add cylinders, and quad-
ruple the efliciency. This principle gave you better combustion and
more efliciency in the engine, thus better gasoline mileage.

It has been a company tradition that almost every year there is
something in the Honda line which brings applause from the
motorcycle bufis and often makes new customers for the whole
line. In the 1975 line, for example, Honda has come out with a
revolutionary new model. It has four cylinders opposed in a water—
cooled engine, with a shaft drive. This enables the driver to have
enormous power without vibration and eliminating the chain
drive, which has been the biggest single problem with all vehicles
in the past. The water cooling should provide a very long life for
the engine

One industry ofiicial says that he sees Honda’s role as so para-
mount that they can succeed in dominating any part of the total
market they set out to take on. In the past they have sold a much
smaller proportion of off-track vehicles than other companies have.
But that—along with the fact that Honda has never been the
particular favorite of police forces—although there have been
large sales in the United States and Latin America—is simply
because they never chose to do so. Now, with Honda again racing
in trials, in motocross, and in time events, it may well be that
Honda will move forward in off—road vehicles, too, capturing the
same lead there they have held in other categories with two‘stroke
engines.

The extent of Honda’s marketing success is evident in the anec—
dote of one Honda dealer: Another parent with her son ——which
so often seems to be the pattern of purchasers—~after buying a
motorcycle at a Honda dealer, turned to the salesman and said:
“Well, I'm glad that is finished. My son was insisting 011 buying a
motorcycle. I told him I wouldn’t have him riding one of them
but I would buy him a Honda."

HONDA: THE hIAN AND HIS MACHINES 102

It is no exaggeration to say that Honda’s policies changed the
whole image of the industry as well as of motorcycles. Much of it
was done by marketing and promotion as described here. But it
was also done by very real design and engineering innovations.

For example, before Honda’s massive entry into the US. market
in the 1950s, the image of a motorcycle repair shop was that of a
zo-foot—wide abandoned building with a pot—bellied stove in the
back. The floor was often encrusted with grease and oil and dirt.
The mechanic manhandled the machine when he was repairing it.
And most machines—European and American—leaked oil and
grease in abundance.

Honda insisted that the dealers he franchised have the where-
withal to house a real repair shop. He developed high—quality rigs
and jigs expressly for motorcycle engine repair. Early on, the Honda
designers fashioned an engine to be split horizontally when it was
broken down rather than with the traditional vertical split. One
simple but important effect of that innovation was to make the
whole problem of drip and mess easier to control.

Honda has taken extremely seriously, as few if any motorcycle
manufacturers did before him, “feedback” from dealers. Their
complaints and suggestions about machines receive serious con—
sideration and have in many instances produced changes in design.
Quality control was introduced into the production of motorcycles
for the first time in its history, and Honda rejected the assump-
tions of the past that motorcycles had to be leaky and noisy and
that you had a choice between reliability and bigness or slimness
with speed.

Honda has also taken the bit between its teeth on the issue of
juvenile delinquency and its associations—at least in the public
mind— with motorcycling through a unique campaign. It all
started in the Los Angeles YMCA, where a young program direc—
tor noted that there was one thing that “got through" to even his
most hardened street urchin — the subject of “bikes.” Motorcycles

CIIANGINC AN AMERICAN IMAGE 103

were a part of the grown—up world, the forbidden world, but some.
thing that a twelve—year—old could relate to. The YMCA director
had a brainstorm: Why not use minibikes as a motivator between
youth workers and the young “unreachables” in the eleven»to—
fifteen age group? The idea was taken to the board of the YMCA
and to American Honda Motor Company. Honda immediately
offered to contribute fifteen minibikes to the trial run of a pro«
gram and gas and oil were donated by a local gasoline service sta-
tion. That was the summer of 1970‘

The pilot program in Los Angeles showed such immediate re-
sults that everyone associated with it was astonished Delinquency-
prone boys gave up negative behavior patterns. Truancy decreased
remarkably. Grades improved. The drug problem seemed to be
alleviated, as fun on minibikes substituted for getting high. The
YMCA began a series of programs all across the country, with
Honda responding with thousands of minibikes. Funds came from
other sources as well—federal and local governments, interna—
tional and domestic corporations, private charities and non—YMCA
youth agencies. The primary program now consists of twenty-six
operating NYPUMs (National Youth Program Using Minibikes),
with the national YMCA board providing sponsorship and staff;
the American Honda Motor Company supplying 10,000 minibikes,
films and materials, and in some cases cash; the US. Department
of Justice, through its Law Enforcement Assistance Agency Asso-
ciation, giving $422,073 for the first year and $712,515 for the
second year; \Vellco Enterprises offering $32,000 worth of gym
shoes; the Safety Helmet Council of America supplying 10,000
helmets; and more than $1 million contributed by local sponsors
of the NYPUM program. The program no longer waits for the
kids to turn up at the YMCA, but uses the enticement of minibike
fun to go after young juveniles, 75 percent of them referred by
police, probation, juvenile court, and school officers. Proof that the
program is working is that only 3.7 percent of the youngsters en—

HONDA: THE MAN AND HIS MACHINES 104

rolled in it have reverted to delinquency. “I am very sympathetic
to this cause," President Gerald R. Ford said as vice-president early
in 1974. “I will keep your comments in mind as funding for proj—
ects such as this is discussed in the Congress.” In 1975 Honda
plans to start seventy—five new local NYPUMs, bringing to three
hundred the total number of programs, with the federal govern—
ment contributing $677,688. The program has given the Honda
establishment — and the motorcycle industry generally -—-an enor-
mous psychological lift by proving once and for all to the outside
world that there is not only no inherent connection between
delinquency and the motorcycle, but that it can be a part of the
solution in healing just that kind of social malaise.

10

 

 

Racing to Research

HONDA ARRIVED at the Rome airport loaded down. The Air France
bag he Carried had carburetors, spark plugs, and electrical Cables
peeking out of the unzippered top. On his back, Honda was Carry-
ing several motorcycle tire rims and pieces of tires. Like more than
one tourist, Ilonda tried to have only the hold luggage weighed by
the airlines oflicial. But the attendant insisted on weighing the
airlines bag as well, so the total came to forty kilos—ten over
weight. Honda had run out of dollars in a two/month serounging
tour of Europe that had followed his initial investigations with
Fujisawa. So he tried the old tourist ploy: He insisted to the airport
attendant that the overnight bag hadn’t been weighed when he

HONDA: THE MAN AND HIS hIACHINES 106

left 'l'okyo, so why weigh it now? But the official would not budge,
insisting on “total weight.” Honda was beginning to lose his
temper in his accustomed way that created havoc in the factory:
“W hat about that woman over there? She is so fat that she would
hardly fit into any seat on the plane. Total weight in her case
must be a lot heavier than my total weight!” But the official was
adamant.

So right there in the middle of the airport, Honda, by now a
famous and wealthy Japanese manufacturing mogul, started a
transformation. “Since I did not want to miss the plane, I thought
hard and came up with an idea. I emptied the contents of my
baggage right there in front of the official and sorted out whatever
I could wear—including a heavy overcoat —and I put on every-
thing. ‘Now, how about it . . . will it do?’ I said, confronting the
official. He was taken aback, and said, ‘That will do.’ I could not
help throwing the words right back at him: ‘What do you mean
by saying “will do”? Total weight is the same.’ ” Honda, having
won something of a moral as well as a technical victory, stomped
off to the plane, almost fainting under the Vclothing he was wearing
in the stifling July heat.

Honda was determined because he was pointed in a new direc-
tion; he had a goal that just couldn’t be waived and the parts he
was carrying proved to be important to the whole enterprise. Every
summer on the Isle of Man in the Irish Sea the T.T. (Tourist
Trophy) Race is held. It is to motorcycles what the Derby, the
Irish Sweepstakes, and the Kentucky Derby rolled into one are
for horse racing, or the Indianapolis Memorial Day meeting is for
automobiles.

Top motorcycle men from various countries are invited to match
the technical standards of their machines. They cover a 420-
kilomcter course without a break and, as Honda puts it, “it is the
dream and pride of all motorcycle men to win this race.” In
March 1954, before he left Japan, Honda had told a semipublic

RACING TO RESEARCH 107

meeting of agents for the Honda motorcycle that Honda would
participate in the race. Furthermore, he had told the Honda
employees that the company would take all the major motorcycle
competitions.

“I had two reasons for the announcement,” he says. “One was
that it would be impossible to snatch the world’s market for
motorcycles away from Italy and Germany simply by enhancing
our technology, thus realizing my determination to prevent im«
ports from swamping our markets, unless our company participated
in the race and showed good results. The other reason was—
although this may sound too sentimental ~I was reminded of the
effect of IIironoshin Furuhashi’s achievement in swimming in
the Los Angeles Olympics. It had had an enormous effect 011 the
Japanese people at a time when it was desperately needed, at the
end of the war period. In those days when Japanese morale and
self-discipline were so low that people got on and off trains by
breaking through the windows, Furuhashi’s world record had
greatly comforted and encouraged our people. I was not as strong
as Furuhashi, physically, but I knew we had good technology at
Honda. I felt that a victory by technology, by brainpower, would
surely bring great hope to the Japanese people, especially to
younger Japanese. So victory in a dynamic grand-prix race such as
the T.T. would not only help Japanese pride of race, but it would
bring enormous benefits to exports.”

So Honda went to the Isle of Man in June 1954. He saw
German and Italian motorcycles competing. And he was instantly
deflated: “I could not help feeling that I had made a preposterous
declaration. I felt half-discouraged and half-flabbergasted in think-
ing that it would be a long time before my dream of winning the
T.T. would be realized. But it did not take me too much time for
my inborn unyielding spirit to reassert itself. 'lhere is no reason
why, I thought, something which could be done by foreigners
could not be done by Japanese. And what I had to do was to

HONDA: THE MAN AND HIS IMACHINES 108

concentrate on research — to find out why it was that the motor—
cycles I had seen on the Isle of Man which had the same number
of cylinders as ours had three times the horsepower.”

That was why Honda went on a search of European suppliers
for parts and designs to find out how the European machines
worked. Once back in Tokyo, he instantly took up the proposition
that a special research organization had to be set up. Honda re—
organized the company, putting together in one department all
the design sections at the various plants. In June 1957 these were
first grouped together as the Technology Research Institute at—
tached to the company. But in July 1960, they were given further
independent status and made a separate company, Honda Cijutsu
Kcnkyu Io (Technology Research Institute). The research com—
pany has gone a long way since then: it now has 1,600 employees
and a turnover of $1.3 million, or 2.5 percent of total sales.

As a result of the efforts of the research organization, Honda
produced a two—cylinder, 250cc racer motorcycle by 1958. The
following year, Honda entered his first T.T. race using a 125cc
racer, ending up sixth—pretty good considering it was his first
try. In 1961, the Honda entry in the T.T. race was awarded first
prize. At the same time, Honda won the Italian Grand Prix. It was
the first time that a manufacturer had taken all three titles when
Honda won the Iapanese title, too, that year, fulfilling the half-
boast, half—promise to his employees of less than a decade earlier.

It is more important, however, that Honda has a philosophy
about the use of research which is relatively unknown in the rest
of Japanese industry. “When we engage in research of any kind,
one thing that must not be forgotten is that research means a
succession of failures, that more than 99 percent of our research is
total failure. Had we left research in the middle of Honda Giken
Kogyo [the parent company], it would have been treated like a
stepchild, for that company’s purpose is the pursuit of profits.
Since good research cannot be treated as simply an appendage

 

Two Hondas competing in the 1966 “’0er Grand Prix motorcycle
championship. That year. Hondas won in five classes: 5000. 1 250e,
25000, 35000. 500cc.

Nouvaodaua HoLow VGNOH

NOIJNHOJHOD HOJDN VGNOH

HONDA: 'l'lIE I\IAN AND HIS MACHINES 1 10

of manufacturing, I decided that it would have to be a separate,
distinct operation in our family of companies. Another reason, too,
is that in my opinion, the organizational structure of a research
institute is different from that of a manufacturing company. A re—
search organization should be structured to enable individuals to
make the best of their ability, whereas a manufacturing company
should be organized to yield maximum efficiency. In any event,
we decided that Ilonda research should get a specific portion of the
sales of Honda overall, and in return, it hands over any develop-
ments it makes to Honda manufacturing. Furthermore, if Honda
manufacturing suffers a loss resulting from a blueprint or design
that Honda research turns over to it, the research is not penalized
for the loss.” The Honda Gijutsu Kenkyu Jo, in short, Honda
says, “is very different from ordinary research institutes which take
pride in producing Ph.D.’s.”

There is little doubt that it is this emphasis on research which
is one of the principal differences between Honda and most other
Japanese companies. Research and development costs in Japanese
industry have remained relatively low. (The Japanese have paid
out vast sums for the weltcr of licensing agreements, a majority of
them with companies in the United States although they also
include European firms, which it has entered into since the end
of World War II. All told, these cost the Japanese $488 million in
royalty payments to foreign companies in 1971 — some 53 percent
to US. firms — and provide the basis for much of Japanese tech—
nology or, in some cases, a platform from which Japanese technol—
ogy has leapfrogged forward to new goals.)

Nowhere has that been more true than in the automobile indus—
try, where all Japanese automobile companies—with Honda as
the outstanding exception and, perhaps, Toyo Kogyo's refinement
of the German-designed rotary engine—have depended almost
completely on US. invention. In fact, in the 19503 when Japan’s
motorcar industry was expanding to world standards, Japanese

RACING TO RESEARCH 1 1 l

automotive engineers by the thousands made extensive trips to
Detroit where they saw the US. plants. One American automobile
executive in Japan tells an informative anecdote about one such
group. It arrived, as many groups had before it, and was ushered
into the manager’s office before being taken on a round of the
plants. The manager scnt for a junior executive who had served
in the US. military during the Occupation in Japan and who had
married a non«English—speaking Japanese wife. Without explaining
that he spoke Japanese, the junior executive started to guide the
group through the plant. As he was doing so, he overheard a con—
versation between two of the Japanese visitors. One told the other
that on their previous visit to the plant, they had not seen some-
thing secret and important, and that this time one should attract
the guide’s attention while the other would cut out to see the
restricted area. The managers attention excited—in the highly
secretive automotivc world, industrial espionage among American
competitors is common—he checked out the group and found
that many were on their third and fourth trip to his plant. He
promptly alerted other Detroit manufacturers, and the US. gov-
eminent—sponsored “productivity missions” were carefully rcincd
in after that so far as Detroit was concerned. Such efforts to gain
the latest in techniques and research from abroad for Japanese
industry— whether by license or observation ——has been essential
to Japanese industrial development in the postwar period.

It has been Honda’s commitment to research and development
with its own resources that has made it different from most
Japanese companies. Masaru Ibuka, chairman of the board of
Sony Corporation, the worldwide electronics organization which is
also something of a Japanese maverick, is an old friend and partisan
of Honda’s policies, particularly his emphasis on research,

“Honda’s unique feature is that once he has established a goal
he wants to achieve," lbuka says, “he will get technology or estab-
lish new technology for all the requirements that are necessary to

HONDA: THE IMAN AND HIS MACHINES 1 12

achieve that goal. Sometimes it may be a specific technical objec—
tive and other times it may be something a little more general,
such as an engine that does not pollute. So that so-called common-
sense technology doesn’t hold for Mr. Honda. There may be other
people, other Japanese, who have ideas similar to those of Mr.
Honda, but the unique feature of Mr. Honda's personality has
been that oncc he gets an idea, or a goal that he feels is worth
striving for, he pursues it regardless of what is in the way. Within
the limits of my acquaintance, I think the best comparison is with
Dr. Land of Polaroid, who seems to be a similar type of individ»
ual.” This kind of search for innovation and improvement has
characterized all the activities of the company—so much so in
fact that it's a fairly common complaint among US. distributors
and dealers of Honda products that innovations for models come
thick and perhaps even too fast. Almost before a new model has
hit the market, Honda has made improvements and modifications,
sometimes to the consternation of dealers who must then restock
parts and restudy the product.

Honda’s commitment to the research activities of the company
was a very personal one. During the 1960s, he was rarely seen at
the downtown oflices of the company across the street from
Tokyo’s main railway station. He spent almost all of his time at
the Honda research and engineering laboratories, where he was
not bored with problems of marketing and finance. Honda wore
the white jacket he had chosen as the company uniform ——- a jacket
that is kept spotlessly clean throughout the company through an
elaborate laundry service, apparently a reminder of those early
years when Honda himself was sometimes called Little Rat be—
cause of the filthy kimono he were as a child. He ate in the corn—
pany cafeteria among the employees, and more than one visitor
has been surprised to suddenly find himself face to face with
shacho—san (Mr. Boss), almost a deity in most Japanese firms.
Honda’s semibald pate was often seen smeared with grease as

RACING TO RESEARCH 1 13

he worked side by side with his development engineers, And, as
he said, “I am president of the company only when I’m consider»
ing its future or its present condition. But most of the time when
I’m wearing the white uniform I’m just one of the employees. I
really have three faces,” he told an interviewer in those days, “I‘m
president, an employee of Honda, and at night I work for Mrs.
Honda!"

Most Japanese companies are noted for their strong executives
and are often ruled for years by one man whose writ runs through
the whole company on every issue. How docs Honda differ from
them? Again, at least in part, it is this concentration on technology
and research, Ibuka feels “I think the thing that has made Honda
outstanding is that he concentrated on engines, as an engineer.
This was the one thing on which he focused all his attention and
his interest, whereas in other companies where there were strong
personalities they may have innovative schemes for management
practices or in other areas, but Honda concentrated on engines.
He left the rest of the business to Fujisawa.”

Ibuka believes that Honda sometimes has been the victim of the
emphasis on size and growth in Japanese business journalism,
arising from his connections with the American media. “\Vhen
Honda would concentrate on a goal he had in mind, he would pay
so much attention to it, and his company would concentrate 011 it
so, that sales would fall off. Observers on the outside would say
that Honda was on the road to bankruptcy. \Vhen Honda then
succeeded in a particular technical breakthrough that started yield-
ing products, putting into motion all the expensive machinery it
had invested in, then its sales would go skyrocketing and business
would boom. It would go on with this kind of rise for a while, then
it would latch on to another product and sales would begin drop»
ping and tapering OH. But each time because of the technology
they had developed — Honda has accumulated a tremendous
amount of unique engine technology which it alone has—it

10.7.0.» 204°” 00fl35>1C2

3,1353,

 

 

Shaeho-san (Mr. Boss) working in the factory.

would survive. Its history has been one of a rise and dip, rise and
dip, but it has always pulled through."

As the company’s activities grew, llonda resisted suggestions
from some business sources that the company move into other
fields. The company’s products, he said, “must have an engine.”
Yet Honda did move pretty far afield. In 1958, it started producing
its first small gasoline-powered electric generators and now also
makes outboard motors and lawn mowers. Always in the back of
Honda’s mind was the fact that he had started thinking about
automobiles as a boy, and it seemed inevitable that sooner or later
the company would try to expand into them. In 1962, Honda
brought out a tiny sports car. It had a chain drive and a racingcar
rear cross-member suspension. It gave the car remarkable stabilityy
although Honda had been warned that it was outmoded for pas
senger vehicles. The car—the Ssoo—was an enormous critical

NOLWHOJMUD )IULOK VUNOM

HONDA: TIIE BIAN AND HIS MACHINES 1 16

success, but the market for it was extremely limited. It was pro—
duced in the main as a way for Honda to enter the automobile
market, but on its own terms, with a specialty automobile. When
the Honda 5800 (a larger version of the sports car) was shown
at the London and Paris auto shows, it received rave reviews. The
French magazine L’Equifae reported that the Honda drew the
largest crowds at the 1966 Paris show, quoting a noted Italian
racing driver as saying the car was “extraordinary.” Le Figaro,
perhaps looking at cars in a more serious business and economic
way, headlined a clairvoyant prophecy with A JAPANESE COMPANY
NAMED HONDA NO. 1 AT THE 1966 SALON; TOMORROW JAPAN WILL
COMPETE AMONG THE AUTOMOBILE GREATS. In Britain, The Sunday
Times auto reviewer said: “The precision of the Honda’s engineer—
ing, almost like a jewelled watch, has astonished every engineer I
spoke to.” The Associated Press reported that the Honda sports
car “brought a chill to the export-chasing British industry . . . add—
ing further troubles at a time when the home industry is beset by
the economic cutback and labor difficulties.” Many of those who
saw the cutaway of the engine thought it was a racing engine and
had a hard time believing that it was a standard engine mounted
in the 5800. In fact, they may have been right. Honda was not
equipped to sell to the widely dispersed world sports—car market,
and he had probably made the car too much a professional racer
and therefore not an attraction to automobile owners who wanted
racing performance with regular Detroit comforts. Most of all,
although the company will not give details, it was the first of
several automobile ventures by the company which were to lose
money and had to be subsidized, in effect, by motorcycle profits.
Eventually 8800 had to be abandoned, although the car is still
seen on the streets in Japan and has become a collectors’ item
elsewhere.

Honda’s move into the auto market, following his experience
with motorcycles, included an important element of what he

RACING TO RESEARCH 1 17

called “floating rcsearch”—racing entries. Honda ran its first
racing competition in 1964 when a Formula One (four—cylinder
engines up to one-liter capacity) was entercd in the German Grand
Prix and the next year won the Mexico Grand Prix.

“\Ve are not just out to win a race," Honda said at the times
“\Ve want to apply the knowledge we gain in the race to produc-
tion. By improving the technical qualities of our engines for racing,
we are able to improve our standard cars.” By 1966, Honda had
already spent more than $2 million in research on the Formula
One engine. Indeed, the S800, the sports car that had gone to
market, was developed out of the Formula 'l'wo racing cars which
Honda had built and entered and won in eleven straight races
around the world.

But in 196—, after a Honda Formula One racer had won the
prestigious Italian Grand Prix, Honda withdrew his cars (and
eventually his motorcycles) from further racing. The company
decision was that there was nothing further to be gained in tech—
nological research in the races, and the publicity which the com-
pany had earned in racing in Europe and the United States had
been about maximized. It was time to turn to other things.

In June 1968, Honda announced that it had made a break-
through on another front: an automatic transmission for its small
cars. Honda had worked out the automatic gearshift without a
license from the US. firm of Borg-VVarncr, the grandfather of
most such systems in the United States and abroad, including
Japanese manufacturers’. Until Honda came up with its automatic
transmission, it had been generally argued that there was too much
loss of power and other problems associated with their develop
ment for them to be applied to small cars. Called “Hondamatic,”
the automatic transmission was to incorporate for Honda's small
cars the convenience of much larger European and American
automobiles. And it was another victory for the research group at

Honda.

11

 

 

On Four Wheels

ON JUNE 10, 1960, President Eisenhower’s press secretary, James
C. Hagerty, arrived at Tokyo International Airport to prepare for
the arrival of the President on a state visit to Japan. Hagerty had
also come to see whether the promised demonstrations by Iapanese
leftists to mar the visit would occur. He found out quickly enough
Hard—core Communist SOHYO trade—union goons from just across
the 'I'amagawa River in the petrochemical complex at Kawasaki
and members of the super—radical student sect Zengakuren demon—
strated with such violence that Hagerty was unable to leave the
airport in the US. Embassy automobile. The photographs of
Hagerty’s face at the window of the car as it was surrounded by

ON FOUR \VIIEELS 1 19

gesticulating students and workers, sometimes threatening to over
turn the car, were a traumatic milestone in the postwar history of
Japan and U.S.-Japanese relations. The Eisenhower trip was can-
celed and the U.S.~Japan Security 'l'reaty was extended by a secret
signing cercmony instead of the state occasion —despite the
demonstrators’ opposition. But a new era had begun.

The Honda organization and its founder were not thinking poli-
tics the day that Hagerty was pulled from the embassy car and
flown into Tokyo by helicopter over the heads of the demonstra-
tors. Instead, Fujisawa was wracking his brain, trying to think up
arguments that could be presented to a MIT I hearing on Honda's
application to move into four-wheeled vehicles, but most important
to “prove” that Honda already was in the fourwheel market.
MITI was proposing ambitious legislation to the Diet not only to
prohibit new entries into the niotorcar manufacturing field, but
also to merge the existing companies into three chosen instruments
of the Japanese government aimed at strengthening the industry
against foreign competition and making the then fledgling Japanese
cars something to be reckoned with in the international market.
Because the demonstrators rarnpaged through the whole city that
afternoon and evening, threatening the very existence of the Kishi
government and at times seemingly the regime itself, the erl’l
hearings were postponed. Because of this postponement Fujisawa
was able to make a better case later for Honda moving into the
motorcar field, and the two powerful ministries of transportation
and finance, backed by the powerful Keidanren, the omnipotent
Japanese Federation of Economic Organizations, were able to
oppose and defeat the MI'I'I consolidation plan. It was another
example of Honda’s incredible luck, of how national and inter—
national catastrophe seemed to have played a role in helping
Honda’s fortunes along.

“Driving a car is like sitting in the living room; driving a motor-
cycle is something like riding a horse —— it’s driving and controlling

 

[ohn Surtecs driving a Honda Formula 1 car in the 1 967 South African Grand
Prix held at Kyalami Racetrack, [ohanncsburg He finished third.

i

A Honda Formula 1 entry in the 1968 \Vorld Grand Prix.

 

NOLLVIIOdHOO “(HOW VGNOH

Nouvuoduoi) E010” VGXOH

ON FOUR \VHEELS 121

something that is almost alive," Honda told foreign reporters
when he introduced one of his new models in the 1960s. But the
truth was that the old sports—car racer, the man who had grown out
of the boy who sniffed after ears through his village many years
earlier, dreamed of producing motorcars. It had always been one
of the aims in the back of his mind as the company prospered. In
1967, Honda entered the automobile market with the experience
the company had gained in racing automobiles and the production
of the sports cars. The entry was a special little car, the N360, a
tiny sedan intended as a Japanese family car but of a size that even
the Europeans might have thought minuscule. The little air—cooled,
two-cylinder, front—engine automobile was an instant success:
Honda put it on the market at a time when the domestic auto—
mobile market was mushrooming In May, two months after he
had launched the new car, Honda could take pride in 5,570 N360s
sold that month. More important, they constituted 31.2 percent of
the total market in that class. The Honda was up against three
established tiny cars in the same class: Fuji, a scion of one of
the prewar zaibatsu companies, which was producing the well»
publicized Subaru; Suzuki, another motorcycle company also in the
small—car field; and Mitsubishi’s small car in the same class,
the most competitive part of the Japanese automobile market. By
the end of the year, Honda had raised monthly production to
20,000 cars. A new automated automobile assembly line at Suzuka
now dwarfed the motorcycle factory, even though it was the
largest factory in the world producing twowhcelers. In 1968, the
year after the car was launched, it was the leader in its class in
Japan. Honda soon added a station wagon model and a small van
to the 360 line.

In the fall of 1968, Honda invaded the lion’s den, Volkswagen’s
Germany, with his little car, matching an N600— with an engine
only a third the VVV’s size—against the wonder car of the post»
war period. The N600 produced a maximum of 40 horsepower

IIONDAZ THE IVIAN AND HIS IVIACIIINES 122

with a top speed of 130 kilometers (81 miles) per hour. Honda’s
design, which placed the engine in the front of the car on front-
wheel drive with no transmission shaft running under the car (like
the VVV with its rear-engine model, rear-wheel drive), gave it a
spaciousness beyond the usual size of such a small vehicle. And it
offered “luxury” features — shock—absorbing pads on the dash-
board, recessed door handles, defroster and heater, rack—and—pinion
steering, and hydraulic brakes.

The little Honda was shown in Frankfurt, Paris, London, and
Los Angeles Inotor shows and excited almost as much talk as
Honda’s motorcycles had in earlier years. At the Paris show, even
Charles de Gaulle stopped to inspect it, remarking in his icily con-
descending way, “Why that's the new Honda. How interesting!”

Then Honda produced a real lemon. In 1970, the company
introduced a 1300cc coupe. Honda executives, some of whom still
drive the 1300, insist that it was a good car but that it did not
meet customers’ demands. It was too much the Honda racing car,
and it was not until it was modified as the Honda 1350 that it
began to sell in any large numbers. Ibuka, and some other ob—
servers, believe that Honda may have rushed into the larger car
against his own better judgment because of pressure from inside
and outside the company to move quickly into the motorcar field.

The push at Honda was part of the whole incredible growth of
the automobile industry in Japan. Motorcars in Japan, like Honda’s
own experience, owed a great deal to the Great Kanto Earthquake
in 1923. The catastrophe had partially paralyzed the capital’s rail—
way and tramway system. One thousand buses were shipped into
the country from the United States by Ford to overcome the
emergency. At the time, there were only about two hundred auto-
mobiles produced locally and they were made under very primitive
conditions.

But within two years after the earthquake, both Ford and Gen—
eral Motors were operating assemblies in the country. Japan Ford

ON YOUR \VHFJ‘TLS 123

was located in Yokohama, near Tokyo, and Japan General Motors
was located in Osaka, the industrial capital of the Kansai, or
\Vestern Plain, until “’orld \Var II the commercial center of
Japan. By the great depression of 1929, the two companies to-
gether were producing about 30,000 units a year. l‘laeh brought in
parts and subassemblies from the United States and even began
installment buying Together they accounted for about 85 percent
of the market. Domestic manufacturers—whosc combined an«
nual production never exceeded five hundred vehicles — remained
technologically poor, small in scale, and were weakly capitalized
until 1930. The Japanese government never put a high priority on
the development of an automobile industry and, therefore, the
zaibatsu giants who largely followed the government’s industrial
policies were not interested in taking what looked like a specula-
tive dive into automobile manufacturing.

Government policy changed, however, in the early 1930s, largely
because of the need for automotive transport for the adventure
that the rFokyo military dictatorship was to pursue in China after
1937. By 1936, a program to force Ford and CM out and establish
a Japanese—owned and —directed industry was formulated. James
Abegglen, writing on Japanese government policy toward the auto
mobile industry, has also suggested that there were additional
factors which dictated the policy One of these was obviously the
international payments problem, which made the import of even
knocked-down automobiles an expensive item in the foreign ex,
change budget From 1936 onward, the government took various
tax and other measures which induced domestic producers to move
forward rapidly and which penalized the foreign-owned producers.

Japan’s final blow against the foreign producers came in 1937,
when a provisional law eliminated the import of strategic eom-
modities and the two U.S.-owned companies had to shut down
shortly thereafter Japan’s two main producers today, Nissan (origi-
nally Jidosha Seizo) and Toyota (an offshoot of Toyoda, a textile

HONDA: THE JUAN AND HIS SIACHINES 1 24

machinery machine company), were producing by 1935. And with
a third truck producer, Isuzu, by 1937 they had a combined pro-
duction which was 80 percent of the market. Most of the prewar
production was trucks and buses for the military, but passenger
cars did reach a prewar peak of 2,000 in 1938. At the war’s end,
production stood at 7,500 trucks per year. But the industry was
virtually destroyed by the bombing which preceded the end of the
catastrophe.

The three major producers proposed ambitious programs to put
the industry back together, but they ran into many of the same
difliculties that I-Ionda had experienced on a minor scale when he
attempted his postwar enterprises. Despite temporary setbacks,
however, production continued to rise, and in 1949 total four-
wheel production reached the 1941 wartime record of 50,000 units.
Passenger cars, of inferior design which could not be called com-
petitive, were less than 12,000 units of this total. An interminis-
terial debate continued in the government over the whole question
of passenger cars. MITI wanted to restrain production in favor of
cargo vehicles and the Ministry of Transportation favored permit—
ting the production of passenger vehicles but at the same time
allowing imports. The debate was joined by the Bank of Japan,
which saw a growing automobile industry as another call on scarce
capital which the government bankers thought should be put into
what they regarded as more basic industries. A significant section
of the government bureaucracy, understanding the enormous role
that automobiles had played in US. industrial development, not
only wanted to produce automobiles domestically but believed
that the protection of a Japanese industry against imports was an
important industrial policy decision without which a modern,
highly industrialized Japan could not be built.

By 1951, the policy debate was settled by events. The scarcity
of transport in Japan dictated that an industry would have to be
encouraged. 'lhe Korean War, with the US. call 011 Japanese

ON FOUR \VIIEELS 12;

resources, including Jeep—type vehicles and military trucks for the
United Nations (American) command, was the final piece in the
argument. Total vehicle production reached 100,000 units in 1952,
5,000 of these passenger cars. The additional financing which had
been made available permitted MITI in June 1952 to announce a
“Basic Policy for the Introduction of Foreign Investment into
Japan’s Passenger Car Industry." The document laid out a prohi<
bition against foreign automobile 111anufacturers entering the mar—
keting operations, and forbade the repatriation to the home
country of earnings from manufacturing operations unless those
investments fulfilled parts of a governrnent—approved program to
encourage automobile production on the government’s terms. In
October 1952, MITI issued another set of directives governing
licensing and technological cooperation with foreign companies.
In effect, it prohibited ally program which did not lead toward
progressive manufacture of all the automobiles in Japan within
five years. Domestic manufacturers who had been operating with
foreign knockdown assemblies were forced to move more rapidly
toward a locally manufactured car and into a highly protected
market. A good deal of discussion has turned around the failure
of any of the major American producers to make equity partner—
ship arrangements with the Japanese companies during this period.
Various observers at the time—both Japanese and American —
believe that the US. companies were too rigid in their attitudes,
that they underestimated the eventual Japanese market, and it was
not until the 19605 when the local industry — and market—were
booming that one after another American company sought to set
up some sort of partnership with the major Japanese producers.

By the time Honda was ready to think about automobiles, in
1958, a highly protected industry was profitably producing 350,000
vehicles a year, 50,000 of them passenger automobiles. Further—
more, the government through MITI was intent on a “structural
reform” in the automobile industry—reducing the number of

HONDA: THE LIAN AND HIS )IACHINES l 26

suppliers of parts, standardizing their product, and reducing the
number of producers in the industry with a rationalization of their
products, various companies specializing in certain types of ve—
hicles. MlTl failed in its efiorts to consolidate the producers into
a smaller number of more specialized companies. Mergers and
accommodations did take place, especially after 1965, but these
were dictated largely by the market, not by government flat. The
government’s fears proved groundless. It had worried that Japanese
makers would not be able to produce a competitive vehicle that
would hold the domestic market against growing demands for
import liberalization when total protection was withdrawn and
also that Japanese makers would not be able to compete in the
export field. Japan entered the 1960s with a production of less
than 100,000 cars annually, but arrived at the end of the decade
as the second largest producer in the world (after the US.) with a
growing export market in Southeast Asia, North America and Eu-
rope. And it was on this basis that in 1971, under enormous pres—
sure from abroad particularly the United States, where the
Japanese were selling 947,000 cars — the government formally
liberalized foreign capital investment in the Japanese automobile
industry. The hothouse flower had not only lived, but was bursting
through the roof, strong and vigorous.

Where was the place in this new, highly competitive, highly
organized, and modern automobile industry for Honda, a maker of
two-wheeled vehicles with a minimum of success with racing cars
and minicars? One route would have been, of course, for Honda
to join forces with one of the foreign ~ particularly U.S. ~ manu-
facturers who, after having played dog-in-the—mangcr in earlier
years when they might have entered the Japanese market, by the
mid—19603 were desperate to enter it in partnership with the Japa—
nese. Detroit had expanded its activities in the postwar period in
Britain, France, and to some extent—although it dated from an
earlier pre—VVorld War 11 period — Germany. And Japan became

 

0N FOUR \VIII‘IICLS 127

the next obvious target. IIonda could have followed the path of
his old adversaries in Mitsubishi, which had chosen in May 1969
to spin off its automobile subsidiary from the heavy industrial
complex and sell a sizable portion to Chrysler. Isuzu moved to tie
up with General Motors, with the rumor that GM hoped, among
other things, to enter the China market on the mainland through
the Isuzu trucks and at the same time give the large Iapanese
truck producer a passenger—ear capability it had not had. Nissan
and Toyota, the giants, had chosen — and were almost boastful in
their public statements—to stand aloof from any such partner—
ships, relying 011 major licensing arrangements for technological
competence. (Nissan had, however, become a partner with Ford
and 'l‘oyo Kogyo in an automatic transmission plant in Japan.)

Honda has never closed the door on such merger or amalgama»
tion talk . . . completely. And Fujisawa has said that it will remain
for future executives of the firm to decide its relations with world
automotive giants. But the old idea that Honda should go it alone,
that there is a special genius in the company that must be pre—
served, has so far prevailed. And in 1971, that determination to go
it alone appeared to be justified when the company’s engineers
made a significant and eye-opening technological breakthrough
that won worldwide recognition and admiration.

12

 

 

Meeting World Standards

T1113 CHERRY BLOSSOMS in Ueno Park in downtown Tokyo, among
the most famous works of nature anywhere in the world, cele-
brated in Japanese poetry and song, no longer bloom pink but a
grayish dirty white. Lovely, windswept beaches along the Pacific
coast of the Bosoo peninsula east of Tokyo were only two decades
ago so Virgina] that the fishermen who lived along those shores
would not go into the water completely naked. (Nakedness is not
a Japanese taboo; the fishermen feared errant spenn might violate
the goddess of the water and bring on a poor catch.) Those beaches
are now awash in litter, adrift in sludge and in petrochemical
muck. Many of the beautiful, stark hills southwest of Tokyo on

hIEETINC \VORIJ) STANDARDS 129

the old Tokaido, covered with twisted, enigmatically shaped,
stunted pines, have been bulldozed and terraced and covered with
ill-conceived and poorly designed suburban housing with their tin
roofs replacing the picturesque thatch. And, worst of all, the people
on Minamata Bay suffer from the huge amounts of mercury
dumped into their waters and taken up by their fish, which pro
duces a crippling and horrendously painful disease which the
fisherfolk have dubbed itai—itai (“it hurts, it hurts"). Many a for»
eigner with no history of pulmonary disorder has come down with
“Yokohama asthma,” a victim of the worst air pollution in the
world from the vast oil-chemical complex at Kawasaki.

Thus the post—\Vorld \Var II era, while bringing industrial
progress and increases in the standard of living to the Japanese of
this generation that they might not have imagined possible in
their wildest dreams, has also brought the ravages of that industrial
society, the destruction of the environment. Yet environmental
concerns have not been widespread in Japan. The memory of pov—
erty and the exaggerations of much of the argument of the
environmental cultists in the United States, so apparent to the
common-sensical Japanese, delayed the movement to keep or pro—
tect the natural environment against industrial pollution. But con—
cern for the environment has slowly become a growing Japanese
preoccupation.

It is perhaps to be expected that Honda and his company,
through their experience and their awareness of the trends in
marketing and design in the \Vest, should have been the first Japa-
nese company to try to cope with the problem of automobile cx-
haust pollution. Almost one-third of Honda’s exports to the United
States are sold in California. And Los Angelcs with its smog prob—
lem is still headquarters for the US. branch of the company. So
air pollution problems were always pointed up to planners in
'I'okyo. It is also typical of Honda that he should investigate and
reject most of the avenues of attack which had been undertaken

HONDA: THE NIAN AND HIS AIACHINES 130

in Detroit. Honda took one look at the problem and decided in
that straightforward and uncompromising engineer’s approach of
his that the route had to be through internal engine design. He
rejected the development of attachments or agents which could
be added to present engines and modified to meet the problem. It
reminds one of Honda’s youngest brother Benjiro’s remark about
their father-~ “He liked things to be straight.” And Soichiro
Honda is a chip off the old block.

Starting in the mid-19605, Honda engineers began to review all
the forms of technology which could conceivably be adapted to
produce “a clean automobile engine.” They looked at the gas
turbine system, electrical power sources, catalyst systems, and of
course, the conventional internal combustion engine used in most
automobiles. They then established some criteria of what they had
to develop in their research: 1) a reliable and basically sound sys—
tem; 2) a system that could be economically mass-produced; 3) a
system that would be economical to maintain and to operate; and
4) a system that the current, huge automobile industry around the
world could adapt quickly. They immediately rejected gas turbines
and electrical solutions to the problem; a new Honda engine had
to be based on proved technology. The Honda engineers soon be-
came convinced, too, that they should not build a system which
relied on catalysts to reduce emissions from an engine. “\Vith such
a system, one is only attempting to clean up a mess after it has
been created,” Honda argued. “Furthermore, there is no guarantee
that the catalyst will continue to work in any individual automobile
particularly in view of problems of heat, catalyst poisoning and
possible failure to repair the system in time.” How many American
automobile owners, forced by law to buy the recent models of auto—
mobiles with catalyst adapters to cut down on emissions, have
found this out for themselves! In the winter of 1974, in fact, the
US. Environmental Protection Agency began to question the cata—
lyst’s effects it had itself ordered Detroit to accept, admitting that

KIISE'I‘INC \VORIJ) STANDARDS 131

the catalytic converter spewed out sulfuric acid in quantities that
might be as much a health menace as the former nonregulated
exhaust pollutants.

By 1969, therefore, the Honda group — and Kiyoshi Kawashinia,
the new president of Honda, has said that eventually 70 percent
of the laboratory research staff were drawn off onto the project—
turned its attention to achieving a solution of the emissions prob—
lem that lay in modifying the reciprocating engine to achieve clean
combustion within the engine without paying a penalty in high
fuel consumption. Honda engineers recognized that it was a (lifii
cult problem. The reciprocating engine has always been eonsid»
cred a dirty engine. They also understood that it was going to be
a long and expensive search —and it was expensive in that, as in
times past, the Honda organization turned its full attention to the
problem, letting other commercial development ideas go by the
boards for the moment.

The idea of the CVCC engine started as a group idea with the
setting up of the special task force in 1969. But the breakthrough
was essentially the work of two young engineers in the research
company drawing on the company's long experience with racing
cars. Mr. Honda himself worked directly with the group, in the
beginning turning Lip virtually every day to work elbow to elbow
on their experiments. \Vhenever a particular problem or bottle»
neck arose, he took an active part in the discussion of how to get
around it. The project had a shifting group of engineers—most
of them young, since the average age at the research company is
only twenty—eight. Some of them were universitytrained, others
products of industrial trade schools, since the distinction isn’t
maintained once you are inside IIonda's organization. There was
no outside assistance and no outside consulting on the project.

By the early part of 1971, the Honda group had reached a con—
cept that eventually developed into the compound vortex»c0n-
trolled combustion engine — the CV CC —— which proved a bomb-

HONDA: 'IIIE LIAN AND HIS .‘VIACIIINES 132

shell in the whole industry around the world. By the spring of 1972,
the Honda engineers had built a prototype which they felt could
be submitted to the US. Environmental Protection Agency for
testing, to see if it met the standards the EPA had set for auto-
mobile emission in the United States in 1975. These standards,
Detroit argued, were arbitrary, and other more independent judges
considered them beyond fulfillment by the automobile industry
in any reasonable time with economical research methods.

The new engine was, as one Western automobile executive in
Tokyo said in private, a “great embarrassment" for Detroit and
Western European designers. Honda’s new engine had many
pluses. First of all, it was developed out of relatively conventional
automobile engineering—indeed, the basic principle, a stratified
charge engine, had been around for a long time and had been tried
and then rejected by several automobile-designing groups as an
answer to the problem. Second, its alterations to the traditional
engine were so relatively minor that retooling for production would
not be the enormously expensive processthat some more revolu-
tionary designs contemplated. When Detroit drew out the argu-
ment that the Honda engine would do fine for small cars (such as
Honda and other Japanese and Europeans had produced in the
miniear field) but not for the big Detroit monsters, Honda
promptly went to work and modified two Chevrolet Impala eight-
cylinders. In the summer of 1973 they also passed the EPA
standards.

“As for its durability and reliability,” Kawashima has said, “we
have full confidence from our accumulated experience in a con-
ventional reciprocating engine. As a matter of fact, you will find
nothing unknown in the CVCC system. You can use the same
facilities as those of the present engines, and regular fuel and
engine oil. In addition, a special mechanism to be added will be
so simple as not to require high precision.”

The basic structure of the CV CC is remarkably similar to that
of a conventional four-stroke gasoline engine. To all intents and

MEETING \VORLD STANDARDS 133

purposes, the engine bloc remains the same. Honda has modified
the cylinder head by adding an auxiliary combustion chamber with
a valve to each cylinder, and has made some changes in the ear—
buretor and the manifold. A simple explanation is that the CVCC
system simultaneously reduces hydrocarbons, carbon monoxide
and oxides of nitrogen within the engine itself through controlled
combustion. This control is achieved, in part, by introducing into
the auxiliary chamber a rich air-fuel mixture and into the main
chamber a lean air-fuel mixture. The spark plug is located adjacent
to the auxiliary chamber where the rich mixture is readily ignited.
The rich mixture, now burning, in turn ignites the lean mixture
in the main combustion chamber. The total air-fuel mixture then
burns over a relatively long period of time, assuring more complete
combustion. This more efficient consumption of fuel reduces the
amount of carbon monoxide and unburned hydrocarbons emitted
in the exhaust. The controlled combustion also reduces the peak
temperatures within the cylinder, thereby reducing the nitrogen
oxides which are formed, particularly at high temperatures, and
which have been one of the most difficult problems for all engine
designers to solve in the pollution tangle.

Kawashima points out that the development of the CV CC leads
back directly to the Honda organization’s racing days when it
launched a research and development effort in combustion prin-
ciples. When the air pollution problem came up, based on that
experience, the Honda group was certain from the beginning
that “after-treatment" or add-on devices were not the approach that
should be taken. This made it easy to get a consensus inside
Honda’s development group on the general method of solving the
problem. Most'of the people who were directly involved in the
CV CC research had had experience in the development of racing
machines—motorcycles and automobiles. As in racing, there was
a time limit set for the solution of the problem and a specific goal
to be won. So the whole project fitted neatly into Honda’s
experience.

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HONDA: ’l'IlI‘Z .‘\IAN AND HIS )IACHINES 136

Honda’s research had originally taken place only with their own
smaller engines mounted in 2,ooo-pound automobiles, for they
were aiming at developing a 1.5-liter capacity engine. But in 1972,
the Honda group moved on to the Chevrolet Vega and was able
to modify its engine successfully as well as increasing its average
gasoline mileage from 17.2 miles per gallon to 18.9. Then, chal-
lenged by Detroit, they chose the Impala as the typical V-8 engine
and modified its 3so-cubic-inch displacement engine. The carbu—
retor and manifold as well as the cylinder head were changed, but
it was not necessary to modify the engine to an overhead camshaft
like the Honda cars. The camshaft was left in the engine bloc.
These modified cars were brought to the United States, tested by
the EPA in the fall of 1973, and achieved the same results—
passing the EPA standards for emission even though those require-
ments have been postponed due to the opposition of the US.
makers in Detroit. Furthermore, the mileage and driveability of
the modified Impalas were entirely satisfactory, the economy in
fact being a little better than the originals.

Testifying before congressional committees in \Vashington,
Honda spokesmen said they saw no reason why their CVCC
might not be put into mass production rather quickly and eco-
nomically. IIonda estimated that the CVCC engine will cost
Honda customers an additional $100 to $150 when it is installed
in the Civic model, a car which Honda brought out in 1972, anti-
cipating the new engine, and launched in the US. market in the
1975 US. model year. Furthermore, the Honda engine achieves its
results satisfactorily with leaded, nonleaded, or low—lead gasoline.
Honda, the giant-killer from the Orient, had the satisfaction of
informing the committee that “we do not intend to apply for a
qualified extension of time which certain automobile manufac-
turers have asked of the EPA administrators because we are capable
of meeting those standards in 1975 and we consider it our obliga-
tion to do so."

RIEETING \‘VORID STANDARDS 137

Honda was running a race not only with EPA and the catalyst
converters that were being proposed by Detroit, but also with the
Japanese company Toyo Kogyo, which had developed a successful
commercial version of the famous \Vankle engine for its Mazda
car. The “7 ankle engine is not a conventional reciprocating motor
but a radical departure. General Motors was moving—before the
1973 fuel crisis — toward mass production of the engine based on
a $50—million patent deal with \Vankle in Germany. (Later this
deal was radically modified.) Yet Honda appeared to have the
edge here— the \V ankle rotary engine as it now exists is a notori-
ous “gas hog." Although 'I'oyo Kogyo’s version of it could also meet
the 1975 original EPA emission standards, Business \Veek reported
that it suffered a 30 percent fuel penalty. By March 1973, Toyo
Kogyo's American subsidiary, Mazda Motors of America, lne.,
reported a $1oo—million loss of sales in the previous nine months
because of EPA findings that it made only 10 miles to a gallon
of gasoline rather than the 17 to 21 miles per gallon it claimed.
EPA tests on the 197; Civic CVCC ranked it No. 1 in mileage—
27 miles per gallon in city traffic, 39 miles per gallon on the
highway.

By midsummer 1973, Honda had received its final accolade: The
Ford Motor Company, which had criticized the engine in hearings
before the EPA as lacking in fuel economy, signed a contract to
license the technology from Honda for the CVCC engine, appar—
ently with the intent to produce it in the United States. (Honda
also had an earlier licensing agreement with Japan's own Toyota
Motor Company and the CM affiliate in Japan, Isuzu.) Ford got
the right to use Honda's technology on a nonexclusive basis
throughout the world for seventeen years. Royalty agreements for
the license were not disclosed, nor would Honda or Ford confirm
that Dearhorn had pressed Honda—and been refused—to pcr<
mit it to sell Honda’s Civic with the CVCC engine in the United
States as the lowest member of the Lineohrl /Iercury line. There

IlONDAZ 'l'lil‘l KHAN AND HlS )IACIIINES 138

were also rumors that Ford and Honda were working on an agree-
ment to market jointly a small car in Southeast Asia, where Ford
has under way an ambitious multinational manufacturing and as—
sembly program involving five countries. A similar licensing agree—
ment was also signed with Chrysler.

Basically, of course, the CVCC approach to the pollution
problem came out of what the Honda people say — and apparently
feel quite sincerely—is their peculiar approach to research: “The
basic principle of our R&D program,” Kawashima says, “as Mr.
Honda has often said, is that our R&D work is respect for human-
ity. Men desire something. Technology is something to achieve
that goal. It’s not that technology is there and that’s why we make
this; it's the other way around — there is a social need, hence the
technology. The technology is simply a means. This is our funda—
mental philosophy. Take for example the low-pollution CVCC
engine: It is an answer to social demands, to social needs —even
the lowliest people working at our R&D company were fully aware
of air contamination and pollution problems. So we developed
such a system. As a matter of fact, we top management thought
that by tackling this pollution—fighting problem we, as a latecomer
into the automobile field, would have an opportunity, a big chance.
And we discussed it with our people along that line of reasoning.
But there was strong opposition [to this line] from those working
in R&D who said that this had to be done because it was the need
of society.”

Perhaps even more important, however, the Honda people re-
gard their technological victory with the CVCC engine as proof
that their methodology in development is correct. “The quality of
development is not solely dependent on the amount of money
you devote to R&D and the number of people you have working
in R&D. If that were true, our R&D company would have been
dissolved long ago and we certainly could not have developed
things like the CV CC. What we believe is important is the phi-

\IEETINC \VORLD STANDARDS 1 "

)9

los0phy behind our work. And what counts, as far as we are con—
cerned, is this theory, the enthusiasm, and hard work," Kawashima
says.

“In our R&D, we believe that what is important is what is in our
R&D people’s brains. If technological breakthroughs were turned
out as machines and computers work, then all you would need
would be a large number of people. But it just doesn’t work that
way So we believe what is important is that we administer or man-
age R&D in such a way that everybody there enjoys working,
coming up with technological innovation. If their brains are ‘on
strike,’ then nothing is going to work no matter how much inone)~
you put into it”

Honda himself has put it more succinctly: “\Vc do not make
something because the demand, the market, is there \Vith our
technology, we can create the demand, we can create the market.”

13

 

 

 

New Problems Begging
New Solutions

CHARACTERIS’I‘ICALLY, with a wag of his shoulders and a deter-
mined shove of his hands into the pockets of his jacket, Honda
shrugs off most of the safety measures being undertaken for the
protection of motorcar passengers today. Why? “Because,” Honda
says, “most of the safety proposals do not go to root causes. They
are ideas of about what to do after the crash. The root of the prob-
lem lies in preventing the accident before it occurs.”

That attitude has been paramount in the Honda organization
from its beginnings. The company has flinched only a few times
in the face of the safety problem, a bugaboo in automobiles and
particularly in the huge world motorcycle market which Honda

NE\V PRODLESIS BECCING NE‘V SOLUTIONS 141

has made for himself and the rest of the industry. In Japan, Honda
has been in the forefront, nudging the rest of the industry into a
campaign not only for motorcycle safety on the highways but
setting up a widespread network of training operations for driver
education for motorcycles. Matt Matsuoka tells how early in
Honda’s US. history he made a safety film on motorcycles with a
snowballing cost which finally hit $73,000. It was first rejected as
being too “touchy,” being too suggestive of the potential danger
of motorcycles. In the end, the film was released as made and
others have followed it, for Honda has adopted the policy that
not only is safety not a concept to be avoided lest it cut into sales,
but that in fact there must be an aggressive campaign in the
company to push it.

Honda is chairman of the Motorcycle Safety Program in the
Japan Automobile Association. In the United States, it was
Honda’s initial offer to back an industrywide safety council opera—
tion for education and research up to $1 million a year that got
the Motorcycle Safety Foundation, headquartered in Washington,
going in 1971. In 1966, Honda developed techniques for simulating
motorcycle crashes in a program to try to design bikes that would
be safer. This technology did not become available in the United
States for another three years. And in January 1971, at Honda’s
initiative, officials of the US. National Highway Traffic Safety
Administration met with Honda officials in Las Vegas, where they
informally worked out an agreement to move toward the develop»
ment of an experimental safety motorcycle vehicle patterned after
such research operations in automobiles. Honda later was the cen—
tral organizer in a parallel research operation in Japan.

But perhaps more important than this sort of industrywide safety
campaign have been the actual developments aimed at increasing
safety in the Honda bikes themselves. Honda was the first manu-
facturer to offer disc brakes on the front wheel—in the face of
catcalls from the old motorcycle hands who saw them as superfiur

HONDA: THE I\[AN AND HIS RIACHINES 142

ous. Offered on their 1968 H750 model as a safety feature, they
have now become standard and widely accepted among all riders
—— with some early scoffers even considering them an esthetie addi—
tion to the bike’s design. To encourage “c0nspicuity” — the promi—
nence of motorcycles in the midst of four—wheel traffic, the lack of
which has often been a major reason for accidents—Honda in-
stalled bctter lights and an automatic switching system which
turns them on with the ignition. Many states require motorcyclists
to drive with their lights on even in the daylight hours as a safety
measure. And in California the Honda device is required by law
on all 1975 bike models. Honda has been first with a number of
what cynical motorcyclists call “idiot lights,” gauges for oil pres—
sure, turn signals, beepers and flashers.

All this has been done in the face of a number of obstacles to
any eFfort to increase motorcycle safety. An enormous one has been
the psychology of the drivers themselves, many of whom cultivate
a kind of “machismo” attitude toward riding motorcycles which
makes “comfort” and “safety" words of opprobrium. There has
been until recently an almost total lack of solidly based statistical
information — in large part because motorcycle accident reporting
has often been lumped indiscriminately with automobiles and, of
course, because of the motorcycle’s sudden huge popularity. There
are also wide variations on rules and regulations governing motor—
cycles and their operation —including licensing—in the various
states. 'l'here is one further problem, hard to define, but apparent
to any motorcyclist, even the most conservative and law-abiding:
a virulent antimotorcycle prejudice among drivers of four-wheel
vehicles. This problem is not a fiction of young sports enthusiasts’
imagination. It arises, probably, from the fear of many automobile
drivers when motorcyclists enter the regular traffic arteries. But
it ranges all the way from an aggressive attempt on the part of
some motorists to cheat the motorcycle of its share of the road to
a sometimes outright assault designed to inflict fright if not injury

NEW' PROBLEMS DECCING NEAV SOLUTIONS 143

011 the motorcyclist. One senior—and older—member of the
Motorcycle Safety Foundation headquarters in \Vashington, D.C.,
said: “I know it doesn't sound reasonable. And I didn’t believe it
until I began riding a motorcycle a few years ago. But the hatred
and apparently fear which motorcycles on the highway engender
for some automobile drivers is not to be believed until you expe-
rience it yourself, In a few short years of riding, I have been pur~
posely driven OR the road, brushed, and had to endure all kinds of
abuse—simply because I was riding a motorcycle on a public
highway and aroused the antagonism of some four-whee] drivers."

If this kind of antisocial behavior on the part of car drivers to-
ward motorcycles is engendered by fear, there may be some basis
to it in the statistics, such as they are, 011 motorcycle accidents. In
1973, there are estimated to have been some 3,100 deaths from
accidents on motorcycles, up from 2,747 killed in 1972. However,
in 1973, there were more than four million motorcycles registered
in the United States, with sales that year alone expected to have
finally topped 1.75 million. (That figure includes two-wheelers and
minibikes, which required no registration)

The accident rate about parallels that of fourtwheel vehicles.
But the big difference is that whereas in the case of automobiles,
injuries run about one in ten accidents, with motorcycles they are
eight or nine out of ten. The National Safety Council estimates
that in a hundred million miles of highway travel the death rate in
motorcycle accidents is four or five times that in automobile acci-
dents. The reasons for this discrepancy are in part fairly obvious.
Since the driver straddles the motorbike, there is less shielding in
any motorcycle accident than in a car crash, But those who have
made preliminary studies also report that one of the most basic
problems is that the motorcycle is so easy to ride that the driver
becomes immediately overeonfidenti Some 25 percent of accidents
involve drivers who have had less than six months’ experience
(according to a US. National Highway Safety Administration

HONDA: ’lIIE 1\IAN AND HIS RIACHINES 144

study). Although statistics are still too sketchy, there is also evi-
dence that in the majority of accidents involving both motorcycles
and automobiles, the responsibility for the accident lies with the
driver of the automobile. In most cases he reports that he was not
aware of the motorcyclist. It is one of the reasons that in teaching
driving techniques for motorcyclists, great emphasis is put on the
responsibility of the cyclist for his own safety by constantly keeping
within the line of sight of the automobile driver (through his rear-
view mirrors, etc.).

In fact, the motorcycle driver requires much more skill than the
driver of an automobile. He needs more concentration, because
his tolerance of road conditions, for example, is much less. An oil
slick on a highway, a patch of gravel, or a sheet of water may mean
little ifi'anything to a motorist but it can mean staying on his
machine to the cyclist. The motorcycle safety program in the
United States, which got off the ground in 1972, aims at first put-
ting together baseline data on accidents so that any program which
moves ahead will have more reliable research than the helter—
skelter information on motorcycle accidents that has existed.

One of the major problems facing any program is continued
resistance from motorcycle drivers on the one hand and from the
general public on the other for what might be called ideological
reasons. The motorcyclist, who comes to the machine often for its
very sense of freedom and adventure, resents enforced safety legis—
lation and regulations which he feels might make him a “guinea
pig.” Like the opponents of the mandatory auto seat belt laws in
some states, he feels that the government regulations for safety
may be in fact the opening wedge eroding his freedoms. The mo—
torcyclists are particularly sensitive to this, for it is only a slight
exaggeration to say that many of them feel themselves members
of a persecuted minority. (Why, the writer was asked, has the
Garden State Parkway in New Jersey, a publicly financed highway
used primarily for recreation, banned motorcycles for some twenty

NEW’ PROBLEMS BliCClNC NE\V SOLUTIONS 1+;

years?) On the side of the general public, education for motor—
cycle driving has been opposed in some instances—for example,
in high schools—as tantamount to encouraging a dangerous and
somewhat dubious activity. The argument runs: The more motor»
cycle education in the schools, the more motorcyclists, and the
more opportunity for accidents.

One of the most interesting examples of this kind of impediment
to an effective safety program is the whole national controversy
about helmets. During the 1960s, as the number of motorcycle
vehicles increased rapidly on the highways, accidents correspond—
ingly increased: From 1960 to 1965 the nationwide registration
of motorcycles was climbing at about 22 percent annually, and
there was a correspondingly average increase of 19 percent each
year killed in motorcycle accidents. Various studies undertaken at
the time indicated that two—thirds of the deaths were caused by
various injuries to the head. (A \Vashington State intensive study
showed that two—thirds killed there (lied as a result of head
wounds.) It was this development which attracted the attention of
federal and local authorities to the problems of motorcycle safety.
The results of reviews on how safety might be encouraged were not
optimistic. Driver education and licensing for motorcyclists are
programs requiring years to produce results and time and skill to
implement. The best rapid approach to the problem seemed to
be safety helmets, particularly when in September 1964 an Austra-
lian study of mandatory safety helmet usage concluded that “risk
of fatality to a motorcyclist in an accident is reduced by wearing a
helmet to about a third the risk without a helmet.” There were
helmet laws on the books in Georgia and Michigan but were
little enforced. In August 1966 the US Department of Health,
Education and Welfare published a report showing a 40 per—
cent reduction in fatalities of motorcyclists \vearing helmets.
When the Highway Safety Act became law later that year, pre»
liminary planning for safety on the highways began at the federal

HONDA: 'l'IIE hlAN AND HIS RIACIIINES 146

level. Draft standards were published for public review in Feb-
ruary 1967, including a call for the rise of protective helmets by
all motorcyclists. It led to a general acceptance of such laws by
the states, but with great resistance in some quarters despite the
evidence of safety.

Although the argument has been put forward that helmets trans—
fer some accident injuries from head to neck, without any scien—
tific substantiation — there seems to be no doubt that the wearing
of helmets is an important factor in reducing injury in motorcycle
accidents. The fatal crash rate is estimated to have decreased by
20.8 percent from 1966 to 1970 in states with helmet laws in effect.
In four other states— Illinois, Michigan, Oklahoma, and Kansas
——- in the period from 1966 to 1970 when laws were in effect and
then taken off the books or lightly enforced because of opposition
from motorcyclists arguing for their civil rights, deaths decreased
27.5 percent in the period the law was enforced. A \Visconsin
survey of eight hundred motorcyclists and automobile drivers in—
dicated they favored a helmet law. But,- to make the argument
more complicated, a majority of those objecting to a mandatory
helmet law nevertheless favored helmet use as a safety precaution.

A motorcycle accident study in California —— where there is no
mandatory helmet law—showed that from 1961 to 1966 motor—
cycle registration increased 261 percent and other vehicle registra-
tion increased 27 percent. Motorcycle accidents in the same period
increased 231 percent but the number of other vehicles involved
in accidents increased 31 percent. Only 14 percent of those in-
volved in motorcycle accidents who wore helmets received head
injuries, but the rate more than doubled for those who did not.
Statisticians estimated that 49 percent of the head injuries would
not have been sustained had the riders worn helmets.

Michigan Secretary of State J. Hare reported a marked increase
in fatalitics following a court decision that ruled that the law
requiring helmets was invalid. Fatalities went up 41 percent, with

NE\V PROBLEMS lll‘ICClNG NI-I\V SOLUTIONS 147

registration in the same period climbing only 11 percent. (Michi-
gan, incidentally, the home of the motor car, is also the state with
the highest number of motorcycle registrations.) Michigan has
subsequently readopted a compulsory helmet law. Now forty-six
states, including Puerto Rico and the District of Columbia, have
helmet laws. rl'lie constitutionality of motorcycle helmet laws has
been upheld in the highest courts of twenty states, and only the
Illinois State Supreme Court has invalidated a law requiring hel»
mets on its highways. The US. Supreme Court has upheld all laws
regarding helmets thus far appealed to its jurisdiction. But the
battle continues, and in the spring of 1974 there were again dem—
onstrations in \Vashington by opponents of such laws.

Resistance to programs of instruction for motorcycle riding has
been widespread, too. One government oflicial in the safety field
says wryly that motorcycle education seems to share one problem
with sex education —— “theory but no laboratory” — because of the
reluctance and cost to use motorcycles even where instruction is
available. In a query sent out to educators, the Motorcycle Safety
Foundation found that 32 percent of the respondents said that
promotion of driving instruction was no more acceptable than it
had been earlier. Their reasons were that little thought had been
given to the problem, that there was no public request for it, that
there was opposition from school administrators, that the curric-
ulum was already too crowded, that schools did not want the added
responsibility. Yet virtually all state departments of education
safety personnel responded that they saw the need for increasing
their own knowledge of motorcycle safety. And the Motorcycle
Safety Foundation is now moving to provide educational material,
including curriculum suggestions and other material such as work-
shops for teachers. These were held in the summer of 1974 in
some twenty—eight states throughout the country for training over
a thousand instructors. In announcing the program, the Motor-
cycle Safety Foundation’s President Charles H. Hartman said:

HONDA." 'I'IIE NIAN AND HIS LIACHINES 148

“There is an acute national shortage of qualified teachers and pro-
grams dealing with motorcycle safety. The Motorcycle Safety
Foundation is attempting through these workshops to increase the
quantity and improve the quality of motorcycle safety instructors,
particularly those who will offer courses in public schools.”

Meanwhile, work is going forward on two fronts, particularly in
improving the nature of the machines themselves. One line of at—
tack, as previously mentioned, is the problem of “conspicuity.” It
is reckoned that failure to see each other is at least a major cause
of all motorcar-motorcycle accidents—perhaps as high as 70
percent. Such things as the colors machines are painted, their
lighting schemes, etc, are being studied in detail.

A second and difficult but promising area is in the braking sys-
tems. Most motorcycles have two sets of brakes —— one on the rear
wheel and a more powerful one on the front wheel. However, the
great problem in learning to drive is to use the brakes in such a
way as to coordinate the systems to prevent locking and skidding.
The National Highway Safety Administration, working with the
American manufacturer Harley-Davidson and its parent company
AMF, is working out an antilocking system. Antilock brake systems
have already been developed for automobiles and are being offered
on some 1975 models; they will be made mandatory on 1975
trucks and cars in 1976. But so far such systems are too large and
too costly for motorcycles and that is the problem now being
tackled.

Dear to the heart of many a non-bike-riding Sunday morning
sleeper is another problem: noise pollution. Honda has been lucky
on this score simply because it has always concentrated on four-
stroke rather than two-stroke engines. Although the decibel level
of the four-stroke can often be as high, there seems to be some-
thing about the raspy, whining noise of a two-stroke engine which
is more offensive to the human ear. In the United States, until
three years ago there was no regulation at all of motorcycle noise

NE‘V PROBLEBIS BEGCINC NE‘V SOLUTIONS 149

levels except for some local, usually ill-enforced ordinances. But
in 1972, the Motorcycle Industry Council, working with the Envi-
ronmental Protection Agency, agreed to a general pattern of de»
scending noise levels each year in all motorcycles marketed in the
United States. Honda has always been ahead of these levels and
the new Honda 500 is whisper-quiet, quieter than most automo-
biles. The EPA is considering putting mandatory formal standards
on noise— the State of California already has them.

But, again, one of the problems is the motorcyclist rather than
his machine. There are certain space limitations and obvious cost
problems with more sophisticated muffling devices. And they gen—
crally do reduce power. But a bigger problem is that so many of
the riders themselves like the noise, equating big noise with big
performance and “flight” of the motorcycle. Most states do have
minimum standards for noise control, but the enforcement be-
comes part of the whole psychologically complicated relationship
between the motorcyclist and the rest of society. As the number
of motorcyclists increases, one can only have faith that a compro-
mise will be struck that will satisfy both.

As with all environmental concerns, motorcyclists — their drivers,
manufacturers, and the general publie——-are likely to find that a
continual set of trade—offs are going to be required between the
drivers' requirements for performance and freedom and the general
society’s needs for safety and comfort. The controversy over seat
belts for automobile riders is a case in point: Congress enacted at
the recommendation of safety experts a law not only requiring
seat belts in all cars, but also requiring an interlock system that
would prevent the car’s starting without the seat belts being in
place and locked. \Vhen an avalanche of mail protesting the 1974
model system reached Congress, and it was learned that from one
quarter to one-half of the automobiles’ purchasers had discon-
nected the buzzer systems, the House of Representatives voted
overwhelmingly in midsummer 1974 to repeal the buzzer-interlock

HONDA: 'I‘IIE BIAN AND XIIS {\IACHINES 130

provisions of the law but still require manufacturers to produce
cars with seat belts which could be used at the discretion of the
passengers. It was one piece of legislation that was quickly signed
into law by a feuding President Ford and a Democratic Congress
in early 1975. But with so to 60 thousand deaths on the US.
highways annually in automobile accidents, the Department of
Transportation is now moving ahead with the idea of air bags
which automatically inflate when an accident occurs. At this writ-
ing, Congress is still wrestling with the idea of whether this provi-
sion should be mandatory or voluntary. The Department of Trans—
portation —-backed by the insurance companies—maintains that
not only would such enforcement of seat-belt and air—bag provi-
sions save lives, but it would also cut enormous medical and
insurance costs.

In the fall of 1970, Honda was made a lifetime honorary mem—
ber of the National Safety Council of the United States for his
service in the field of safety. The council of the Los Angeles area
paid a visit to the Honda Research & Development Company and
presented the citation to Honda. Commissioner H. W. Sullivan
of the California Highway Patrol said: “Some people in the United
States are still of the view that we should adopt safety standards
only on the basis of studies conducted in our country. But after
inspecting the Honda facilities, I now feel that standards that are
set in the United States can apply to other countries in the world
as can standards in other countries apply to the United States.
Developments in safety can be applied throughout the world as
problems are not unique in one part of the world only but exist
in others, too." The award recognized — perhaps for the first time
in Japanese-American commercial circles — that it would not be a
one-way street in safety and research developments on motorcycles
and automobiles. In the years ahead, it is obvious that collabora-
tion among major world producers selling in the United States and
international markets will have to increase.

NE‘V PROBLFAIS BECCINC NE\V SOLUTIONS 131

In January 1975, Honda announced an experimental safety autov
mobile modeled on the Civic CVCC. The panel of the car was
fitted out with new signals telling the driver what action to take
—whether to stop, reduce speed, or to take the car for needed
repairs. The panel signals work on sensors mounted in the auto-
mobile and indicate any malfunctioning, for example, a door
not closed, excessive speeding, improper driving conditions. An-
other panel gives the driver specific information on malfunctioning
of the car itself, such as brake failure or overheating, with twenty-
one different indicators.

The car is also equipped to deal with minor accidents, with im—
pact—absorbing pads on the front and rear bumpers and sides.
These pads are made of synthetic foam rubber and aluminum
honeycomb and are designed to permit a head-on crash of two
cars at a speed of 55 mph without damage to the cars or passengers.
The car would cost $4,000 to produce, or about 50 percent more
than the mass—produced Civic. However, Honda reckons it might
be mass-produced at $3,500.

One can only hope—along with Honda ——that somehow the
vast experience and accumulated knowledge of such scientific pro—
grams as the experimental safety vehicles and motorcycle research,
based on reservoirs of infonnation like the space program, will
leapfrog toward a program of mass and individual transportation
which have built into them traffic safeguards that prevent acci—
dents. For example, radar screens which prevent pileups on the
high-speed Interstate highways are already theoretically feasible if
still beyond the financial and design resources of the automobile
industry today. But that kind of attack, as Honda would say, gets
at the root of the problem.

14

 

 

Hondaism

COMPANY PRINCIPLE

Maintaining an international viewpoint, we are dedicated to
supplying products of the highest ePficiency yet at a reasonable
price for worldwide customer satisfaction.

MANACELIENT POLICY

1. Proceed always with ambition and youthfulness.

2. Respect sound theory, develop fresh ideas, and make the most
eflective use of time.

Enjoy your work and always brighten your working atmosphere.
Strive constantly for a harmonious flow of work.

Be ever mindful of the value of research and endeavor.

\F-F‘.”

HONDAISKI 1;;

To a \Vestern reader, it all sounds either a little na'iye, or, to a
few grayer heads, this code of Honda’s reminds one of the old
fashioned slogans that adorned the walls of US. offices and homes
in a quieter, more disciplined, and nonquestioning age. Today
“Thimk” (c.q.) is almost more popular and well known than
“'l‘hink.’y

But company principles and codes are as popular and widespread
in Japan today as they ever were in the \Vest, perhaps far more
important. No company, eyen the smallest, is without its inspira-
tional message. And in many Japanese firms, especially those suc
cessful ones with leading politicoeconomie figures as their father
image as well as dictatorial boss, the iconography is almost unlinr
ited. One major Japanese business figure is the author of long
dissertations which have been printed and widely distributed with
such resounding titles as If Karl Marx Had Been Born a Japanese
(he would have chosen the Confucian-Japanese concept of wa,
harmony and cooperation, not war among the classes and dialec»
tical conflict). Other titles: Be a True Japanese, Capitalism and
the Working People, etc. Nor do these figures demcan their own
capacities: Sazo Idemitsu, the head of one of Japan’s leading pe—
troleum companies whose business origins go back to Occupied
China (lining the 1930s Japanese aggression, says: “I am inclined
to think this Ideinitsu way [of harmony and working together] was
what Marx cyentually aimed at, but since he was born in the \V est,
the land of opposition and conflict, he was made to walk the way
of opposition and conflict, and was led in the end into a blind
alley, as at present.”

Stripping away this kind of cant, then, is there really something
peculiar to Honda among Japanese firms, and if so, what is it? To
answer the question one has to look at the Japanese company and
how it operates in “normal” situations. And perhaps it’s important
to see what it is that Ilonda people themselves believe is different
from others in their organization.

HONDA: THE BIAN AND HIS BIACIIINI‘IS 154

The spectrum of Japanese company structure is wide and, al-
though as in most things, conformity tends to be more importantly
regarded and perhaps more the rule than in the Western indus—
trialized countries, there is a wide diversity among companies and
their organizations. Yet vastly oversimplifying, of course, one can
make some generalizations that set the average Japanese corporate
entity apart from its equivalent in the West.

Lifetime employment. It is still the rule — exceptions are mini-
mal—that when a Japanese employee seeks and is successful in
getting employment with a firm he will stay with it all his working
career. It is fairly obvious that this one fact produces vast differ—
ences from the West, particularly the United States, where job
mobility is almost the rule rather than the exception. The accent
is put on security, a harmonious working relationship within the
organization, and tenure, not on a competitive climb to the top of
the pyramid as in the United States.

Seniority. The length of service in an organization becomes, by
and large, the principal test of capacity and authority. That is not
to say that intelligence is not rewarded — that as the pyramid of
command in the Japanese corporate structure narrows other factors
than seniority do not play an important role in determining pro—
motion and compensation. But seniority plays a role far greater
than in \Vestern business organizations, far closer to the autono-
mous government bureaucracies in the West than to private capi-
talist corporations. (Perhaps this is a reflection of the fact that the
earliest big Japanese manufacturing companies —e.g., steel —
were initiated by government and turned over to private entrepre—A
neurs in the nineteenth century.)

Compensation in terms of company benefits. Since the Japanese
worker expects to remain in the company he enters as a young man
or woman, he takes far more seriously than his Western counter-
part has in the past the nonsalaried inducements for working there
— not the least of which is the prestige and antiquity of the com-
pany itself. It means, for example, that Japanese trade unionism,

HONDAISM 15;

while importing most of the forms of the \Vestern syndiealist
movement, is something quite different in practice—something
that \Vcstern scholars have dubbed ”enterprise unionism”—be
cause the operations of the union group are largely limited to the
one company or corporation in which it operates. In fact, since the
union is limited to one company, it indirectly seeks to strengthen
the company's organization. It often fights, for example, for more
company benefits rather than for more independence of the worker
through higher earnings and better working conditions to decide
where he shall spend additional income.

Loyalty to the company. Japanese workers have in the past—
and there is considerable evidence that despite the impact and
erosion of modern industrial life this concept has only been par—
tially breached — clung to an identity which is part and parcel of
their work and their company. It is no exaggeration to say that in
many ways the Japanese company takes the social role of the
extended joint family elsewhere in Asia among preindustrial tradi—
tional societies. It is, for example, not unknown even today for
small companies to arrange marriages for younger employees.
Idemitsu is probably expressing the general sentiment of the
Japanese when he says; “Perhaps young men of my company,
seeing me fight alone amid enemies, would feel that they must
join forces behind me. The power emanating from such unity is
great. Suppose some pressure is brought to bear upon us from the
outside, members of my company would rise as one and be willing
to go into tank bottoms again [a reference to the fact that many
senior Idemitsu officials had \Vorld \Var lI experiences of sacrifice
and suffering]. They are ready at all times to jump into a life of
hardships and austerity whenever occasion demands. Members of
my company have been well trained to be aware of their responsi—
bilitics and to walk the road of difficulties voluntarily. \Ve have
gone through difficulties many a time, so that our minds are
resolute and our spirit is unbending." If that sounds like some
sawdust-trail, fundamentalist evangelist to an American car, it is

HONDA: THE BIAN AND HIS bIACHINES 156

nevertheless a cultural norm to which the Japanese in general—
in this age of television, washing machines, private automobile
ownership, and foreign tourism—still cling, at least in principle.

“The new employee is in just about the same position and is, in
fact, received by the company in much the same spirit as if he were
a newly born family member, a newly adopted son—in—law or a bride
come into the husband’s household," Professor Nakane of Tokyo
University says. “A number of well-known features peculiar to the
Japanese employment system illustrate this characteristic, for ex-
ample, company housing, hospital benefits, family-recreation groups
for employees, monetary gifts from the company on the occasion
of marriage, birth or death, and even advice from the company’s
consultant on family planning. What is interesting here is that this
tendency is obvious even in the most forward-looking, large enter-
prises or in supposedly modem, advanced management. This con-
cept is even more evident in Japan’s basic payment system. The
relationship between employer and employee is not to be explained
in contractual terms. The attitude of the employer is expressed by
the spirit of the common saying, ‘The enterprise is the people.’ "

Professor Nakane has explained that the origins of this modern
Japanese employer-employee compact lie in preindustrial Japan;
that unlike other Asian societies, ancient Japan had a concept of
the household which included all those who worked as an agrarian
unit and were accepted as members of the group whether or not
they were blood relations. In fact, when a blood relative left the
household, he was thereafter virtually excluded.

The mechanics of the modern Japanese company personnel
policies and its organization are fairly clearly and bureaucratically
defined. Recruitment, for example, of skilled personnel is on a
mass levy basis. For its candidates to be future senior officials, the
average big Japanese company, according to its rank and prestige,
goes to the equivalent university and chooses an almost arbitrary
number of its leading graduates, or again, those whose prestige and
accomplishment in academic studies match the company’s prestige.

HONDAISAI 157

For example, 'li'okyo Uni\‘ersity (the prewar Imperial University),
which was created in the earliest (lays of modernization by the
government to produce a modern, bureaucratic elite, is the home
of virtually all members of the Finance and Foreign ministries —
the two paramount Japanese government bodies. It is virtually
impossible for a non-Todai (Tokyo University) man to enter either
of these ministries, and the occasional Kyoto or Kyushu University
(reckoned Japan’s number two and number three state universi-
ties) graduates who do enter immediately fall into a cabal of their
predecessors fighting for their professional existence in the Estab-
lishment. The number of recruits (and this parallels Japanese
manufacturing, which so often looks to production rather than
marketing as the arbiter for its investment and expansion patterns)
is generally a reflection of that year’s financial resources, not the
number of places which the company has actually vacant according
to a personnel plan.

The ”new class” — and it bears more resemblance to a new class
of army recruits in a W estern military force than to a recruitment
program in a Western company—is then put through a rigid
indoctrination program. The “freshmen"—and the Japanese use
the English word—undergo an initiation period and are often
made to (lo the most menial jobs in the company. They take an
intensive course in the company's history and ethical code as well
as in its actual industrial and commercial activities (In some
Sumitomo companies, for example, despite the fact that the prewar
zaibatsu group no longer exists in its old form, the freshmen are
taken to the Sumitomo family villa, now a company guest house,
in Kyoto, where they go through a Shinto prayer ceremony at the
temple dedicated to the ancestors of thc Sumitomo family; they
also view the magnificent Sumitomo collection of ancient Chinese
bronzcs)

Advancement is by and large with the class, with seniority, until
the narrowing pyramid begins to sort out the more accomplished
candidates from the others \Vhere seniority promotes a candidate

HONDA: 'l'Illi MAN AND HIS BIACIIINL‘S 158

who cannot fulfill aspects of the job, the system is elastic enough
to permit him to be understudied or supplemented by other
younger members of the bureaucracy, whether it be a company or
the Japanese government. (The differences between government
and business organizations are less than those in the United States
and perhaps in Europe.) For example, a bureau chief in the
Finance Ministry who cannot handle English but who has been
propelled by seniority and experience into the management of
Japanese international financial afiairs would be given a special
assistant, what is commonly called in sophisticated Japanese circles
“an English voice.” These English—speakers, incidentally, intelli—
gent, charming, and communicative, are often mistaken by more
naive foreign businessmen as policy-makers.

Another distinctive feature of the Japanese system is the rotation
of a man throughout a company (or a government ministry) so
that he gets wide experience in almost every aspect of the organi-
zation’s activities at some time or other. Yet advancement to the
top post in most government ministries and in most companies is
through what the Japanese call in English the General Affairs
Department. There is no equivalent in \Vestern companies, but,
in effect, it is the administrative skeleton of the whole organiza-
tion, a promotion line that makes the “superbureaucrat” rather
than the salesman or technician the chief of most Japanese firms.

Decisions tend to be made in these organizations, as elsewhere
in Japanese society, through a consensus sometimes laboriously and
slowly arrived at. Differences are generally compromised. Even the
strongest and seemingly most independent Japanese business leader
often accepts advice, recommendations and technical decisions
from subordinates. And the rapid and steady promotion of men
to high echelons with their “class” has in the postwar years of
rapid growth thrown up unusually young men, by Western stan-
dards, into positions of great responsibility. In part, this has been
the result of the historic Japanese situation of overpopulation and

HONDAlSRI 159

enormous reserves of manpower. Retirement came early from most
Japanese companies and particularly from the government because
of the enormous body of men waiting to move up. In the 19603 ~-
and it apparently will be increasingly so — the growing expansion
of industry and government bureaucracies combined with lower
birth rates and the resultant manpower shortage in Japan have
slowed down this process. Retirement has been moved forward —-
back from the late forties and even earlier which had been the
norm in the 19503. That trend is likely to accelerate in the 1970s.
Ironically, this contrasts sharply, of course, with the fact that so
many bosses in Japan today are octogenarians or men in their late
sixties and seventies

One effect of lifetime employment and all that goes with it has
been virtually no horizontal movement from one area of society
to another, as contrasted with most \Vcstern industrialized coun—
tries. Except for the constant movement of men out of government
—— the Finance Ministry, the Bank of Japan, the Ministry of Inter-
national Trade and Industry, etc—into private business when
the narrowing pyramid of promotion and early retirement hits
them, there is relatively little interchange between government and
business employee or from company to company. Academics, for
example, do not move back and forth from the universities to
business and government as they have, particularly in the United
States and Britain, in the past fifty years. And this may explain,
in part, how a heavily Marxian academic community has had so
little cfieet on the staid and conservative government and private
industrial bureaucracy despite the respect for and importance of
formal education in Japan.

Japan, with a runaway inflation in 1973 even by Japanese stari-
dards that had seen inflation of up to 8 percent in many of the
post—\Vorld \Var II years of most rapid development, is un-
doubtedly changing. Japanese workers have been more restive
than in any time since the early 1930s, when depression and priva~

HONDA: THE BIAN AND HIS hIACHINES 160

tion struck many family farms and small industry. Still, a survey
in the spring of 1973 was very revealing. Pollsters found that 33
percent of the Japanese interviewed thought they were working
too hard. Only a little over so percent thought their opinions were
considered by corporate management. Yet the same respondents
to the questionnaire said that 37 percent of middle—rank executives
would under no conditions change their jobs, and another 26
percent said they had not considered the possibility at all. Forty-
one percent of the executives reported that they felt they were
sacrificing their home lives for their jobs. And even more, a major-
ity of those polled said their “most immediate concern" was “the
company’s progress” where they worked. These revealing figures
go on and on: ”l‘wenty-seven percent had taken no leave in the
past year even though two-week vacations are ostensibly compul-
sory by Japanese law. (Fifty-five percent had taken only five days
or less in the year previous to the interview.) An overwhelming
78 percent of Japanese workers believed their abilities were “rea-
sonably” appreciated by their company. And, perhaps most star—
tling to a Western audience, 93 percent of the workers said that
they considered the change from a six-day to a five—day week
inevitable in Japan but would not choose it were it to cause a loss
of productivity!

It is not necessary to even suggest or ferret out American or
European statistical responses in a similar inquiry. The death of
“the Protestant Ethic” is an accepted fact of life in Western
Europe and perhaps even in the United States. Thus, when all
else is said about the Japanese worker, one comes back to the
simple and basic notion that the work ethic is the essence of his
view of life and the most important ingredient in the Japanese
industrial system. And that while it may be eroding among
younger people in the society, there is still no comparison to atti—
tudes toward work which predominate in the United States and
Western Europe.

noNDAisxr 161

How does Honda fit into this generalizcd pattern of Japanese
government and private bureaucracy?

Yonosuke Miki, a writer on companies and company affairs who
has studied in great detail many of the large Japanese corporate
organizations, says that Honda is different. “It is a company
founded by a man who is fond of the smell of gasoline . . . indeed,
a company born out of the very smell of gasoline, founded by a
man with little formal education who is a transportation maniac.
But when thinking of Honda, another man, Fujisawa, should not
be forgotten. Honda, unlike another onc~man-typc entrepreneur,
[Konoske] Matsnshita [of National Electric Industries, Ltd., the
Panasonic trademark in the United States], is an engineer. He is a
man who only knows how to make things. And as much as Honda
is an engineer and talented and has succeeded in cutting through
technological jungles, succeeded in pioneering, the company
would not have become what it is today without Fujisawa, who
is a genius in sales, in exploring and developing markets. 'lhc
administrative side all through the years was left in the hands of
Fujisawa."

Miki says, too, that Honda has a significance in the Japanese
economy beyond its role as a profitable and large company. “T he
Japanese economy during the five years at the end of the war was
a black market economy, meaning it had not yet been launched
on the course of recovery. It was a period of utter confusion and
the significant point is that Honda was founded in the midst of
that confusion [September 1948]. \V hat is important to remember
in this respect is that Honda was not the only company founded
in those days but there were many, many other companies seeking
to make their way. And the point is that of all these companies,
only a handful—including Honda, Sony, Yashika, Daiwa House,
Mitsumi Denki, Onward Kashiyama, Riccar Sewing Machine——
succeeded in surviving, while the others were blown away by
storms like pebbles on a roof. And there are some traits common

HONDAZ ’I'IIE LIAN AND HIS hIACHINES 162

to those companies which survived: The men who founded them
were all innovators, with few exceptions only partially educated,
and started in fields of great competition."

Even later, Miki says, it was not clear that the Honda group
would survive. “It was in 1954 that Honda’s stock was listed first
on the Tokyo Stock Exchange. At that time, I was asked by some
securities firm man whether I would like to buy some shares in
the Honda company. I told him quickly and flatly ‘no.’ I was very
skeptical of the future of the Honda company because of an ex-
perience I had had shortly before that: I was taken through the
plants of Honda and later was invited to a party at a Japanese-
style restaurant. I was taken aback by the way Honda dressed in
chanehanko [a sleeveless jacket worn by a baby or small child].
He used very vulgar words in teasing the geisha. And I came away
from the party wondering if he really were crazy, thinking that
there was only a paper—thin difference between genius and
madness." ‘

Miki says that,so far, at least, Honda has not changed its
peculiar character and become like other companies. “There are
no favorites because of blood relationships,” he says. “Interviews
with prospective employees at the time of the ‘entrance examina—
tion’ are not conducted by the members of the board of directors
as in most Japanese companies but by kacho-class [section chiefs],
namely, men who will be supervising the new recruits directly.
Also employment is never made on the basis of connections or
recommendations by Honda’s relatives, including his wife’s. Men
are taken in purely and strictly on the basis of ability and merit.
Or when a party is given to celebrate one kind of accomplishment
or another by the company, no farnous personalities, dignitaries or
celebrities are invited as special guests or to deliver speeches. In—
stead it is a kind of neighborhood party with the merrymaking
often the use of Honda products and a mixed bag of guests."

All this is in keeping with the idea as expressed by Fujisawa
that people make up the company, not its organization or its regu-

IlONDAISM 163

lations. “You can sit down at a desk and write an organizational
chart in three minutes. But we set about by an exchange of ideas
back and forth to establish a diEerent kind of organization — and
that has taken us sixteen years. The first object of our organization
was to create conditions whereby everybody could spend his career
in a situation he likes—for example, if he is a mechanical spe-
cialist, he could remain a specialist in mechanics throughout his
career, or if he liked ‘brainwork' he could remain in a job requiring
no mechanical skills. What we aimed at was that no one would
regret a misspent career. At the same time, we have shifted im-
portant directors of bureaus from time to time in order to avoid
the development of ‘sectionalism' in one part of the company or
another."

Fujisawa is talking here particularly about how the Honda
organization provides for a special category of worker called
Specialist (using the English word), who can if they choose reniain
indefinitely in the same position in the factories. \Vhile the con-
cept would not be particularly revolutionary in the United States
or Europe, it is in Japan where the seniority system insists without
exception on a progression through various jobs. In most compa—
nies a man moves every two or three years to another job.

The very fact that “youtlifulness” is mentioned in the com—
pany's management policy is again without precedent in Japanese
business. Age as well as seniority is considered the basis of all
effective management. In the mid—19605, McGeorge Bundy, then
a US. presidential adviser, while visiting Japan discussed with a
representative group of Japanese businessmen the concept of
seniority as the mainstem of the Japanese personnel system. Bundy
asked the business group if it would not be necessary to modify it
in order to meet the increasing demands for specialization in
competition in international business. A senior Japanese executive
who was present said that were he to try to impose a system
whereby seniority would be set aside, he would have a revolution
in his company. And he said that he did not see any possibility of

IIONDA: ‘I'IIE I\IAN AND HIS hIACIIINES 164

that changing for at least a decade. His prophecy holds, and a
decade later any such change seems even more distant.

Yet when Honda chose a new president of the company in the
fall of 1973, the Job went to Kiyoshi Kawashima, the forty—seven—
year—old head of the research company. In Honda’s Suzuka plant,
for example, the average age of workers is only twenty—six. In some
instances a company plant manager is reluctant to tell a visitor his
age since it is so much younger than in most Japanese plants of
comparable size.

“Youngsters will think that things must be changed,” Honda
says, “and the older generation will be critical of young people,
always. The generation gap is nothing to be surprised at. It is only
too natural that there exist insurmountable differences between
the two." Yet Honda accepts this as not only an inevitable conflict
but one which he approves of and feels is essential to progress.
Again, this line of reasoning might not be considered even novel
in the West, but in Japan it is eccentric..

Not only has Honda put an emphasis on younger people, but
its recruitment has also been to attract workers without family or
school or other “connections.” In part, of course, in the early years
of the firm, it was an attempt to make an asset of a necessity: A
small manufacturing operation like Honda—what the Japanese
call small and medium—sized industry—could not have hoped to
attract graduates of the prestigious universities. As Honda has
grown, there have been an increasing number of university gradu-
ates, particularly engineers, who have moved into the company,
In their recruitment, however, Honda makes only a concession to
credit their university years as part of their seniority in the Honda
system, thus giving a mechanic without long formal schooling,
who may have trained at a lower level but worked in the company
for more years, something of an equal footing. One senses in
conversations with younger company executives some conflict
here, and it may well be that as the need for more and more
sophisticated engineers and research scientists presents itself per—

noNDArsxr 1 6;

sonnel policies will have to move toward high rewards for those
with better education.

Honda himself and other officials of the company are particu-
larly proud not only of the relatively large expenditures on research
and development compared to other Japanese companies, but also
of the large engineer group in the company. Again, Honda has
put the emphasis on the recruitment of young people in the re
search and development activities. “Our R&D system is such that
each individual is given an opportunity to do whatever he would
like to do," Kawashima says. “He is free to make any proposal and
take responsibility for any research he wants to do. 'l'echnological
innovation cannot depend on experience alone. If you have only
older, experienced engineers, ranking engineers only, you are not
going to get anywhere. Younger engineers must be given more
opportunity and should be treated equally with everyone given a
chance to help them reach their goals. I can take just one example,
the design of a new engine. In our company, those who have spent
ten years with us after graduating from a university are given the
task of developing a new engine, not necessarily one that would
be capable of mass production, but one that is satisfactory at least
on the R&D level. I can hardly conceive of that happening in
another Japanese company. And there is another thing we all
learned from one engineer, by name Soichiro Honda, and that is
this: Don’t accept any easygoing technological compromise. If
there is a possibility then we should pursue it— to the extreme.
And that’s the essence of our research staff."

Yet, in many ways, Honda’s organization and its operations are
those of other Japanese companies. Social and pccr pressure on
employees to conform exists, which could hardly be found in US.
companies today or in most l?'.uropean companies. Only a few
years ago there was a company “consensus” against employees
playing golf. It’s been modified now, limited to discouraging
Honda employees from talking about golf during office hours, a
Japanese mania that has reached the combined proportion of US.

HONDA: THE MAN AND HIS MACHINES 166

professional football and European soccer. (Honda himself has
become a golf fan in recent years.)

Company benefits, as in most big Japanese firms, are extensive.
Yet Honda has innovated here, too, by being one of the first
Japanese companies to help provide means for employees to buy
their own homes. Japanese real estate prices, astronomical by US.
and even European standards, would have made that virtually
impossible for even the highest-paid executives without financing
from the company.

Honda has its ”enterprise union"—that is, a union composed
of workers only in the Honda plants —but again it is a Japanese
version of the trade union, not a European or American syndicate.
There was only one strike in the company’s history, in 1954. It
was short-lived, and apparently involved a dispute between Honda
and his younger brother —-— who sided with the workers -— as much
as between the management and the workers. On the other hand,
when he retired in 1973, Fujisawa said that one of the happiest
moments of his Honda company experience had been when the
union gave a party for the whole company on its twentieth anni—
versary. In the two financial emergencies in the company’s history,
the union was instrumental in waiving workers’ holidays and
bonuses in order to see the company through its difficulties.

Honda has moved to a five-day week — not common in any but
Japan’s most progressive companies but fairly common in the
automobile manufacturing industry. The work year is studded with
the type of company-sponsored holiday outings, arranged and
often paid for by the company, that typify all Japanese companies.

It may well be, as Fujisawa has said, that the test of whether
Honda is really special, really different from other Japanese com-
panies is yet to come. Both Honda and Fujisawa believe they not
only built an innovating and progressive company but also that
they have created a corporate entity which is yet to come to full
flower as they move 01? the scene.

15

 

 

Honda's Prospects:
A Japan Microcosm

IT TAKES ONLY a few minutes in Tokyo before the visitor is aware
of the enormous life force in the city, encapsulating as it does the
whole Japanese nation. Watch the frantic start—stop traflic patterns
with the so-Called kamikaze taxi drivers, named after the pilots of
World War II zero aircraft willing to commit suicide as a last
desperate act of patriotism. Inside, the waitresses or office workers
often break into a trot even on the most routine or mundane
errand. Japanese elevators always have “open” and “close” buttons,
and one must be quick to hop into an open elevator door before
it closes on your foot or elbow. Many passengers, it seems, never
can wait the cxtra seconds to permit it to close automatically. Or

HONDA: '1 [IE )XAN AND HIS SIACIIINES 168

watch the filial inspector on a Honda automobile plant assembly
line walking about the ear literally caressing its every part in a last
effort to determine if there are any faults that must be corrected.

It is this pattern of labor and determination which go further
than anything else to explain Japanese postwar recovery and the
mysteries of Japanese economic development which were spoken
of at the outset of this book. Economic theory developed in the
West, whether it be mereantilist, Marxian or Keynesian, falls far
short of explaining the enormous power in the Japanese economy.
Probably Freud or Jung would have had a great deal more mean-
ingful to say about it had they studied the Japanese psyche.

There are many—both among the Japanese and among those
foreigners who know the country best—who have watched the
developments of the past thirty years and are confident that the
Japanese shall weather the storms ahead in the international econ—
omy no matter the trials and tribulations. Certainly, the “inflexi—
ble” Japanese have shown a remarkable ability to adapt to the new
world of more and more rapid change. Yet there are horrendous
and basic national economic problems that are developing, to a
considerable extent those which will face the Honda organization
in the years ahead. In that sense Honda is a microcosm of the
national scene.

The Japanese national problem, stated in its simplest terms, is
relatively easy to project. The little rocky islands have, even in
these days of enormous technological change, little by way of
resources. Only 5 percent of the land is arable, which means that
even with the enormous increases in productivity and plant genetic
revolution food will have to be imported in increasing quantities
as the relatively poor average diet improves. Until possible offshore
oil or other more sophisticated sources of energy are developed,
Japan must depend on the outside world for 85 percent of her
fuel. Nonferrous metals, fibers—all the raw materials of the
modern industrial niachinealiave to be bought aboard. Japan

HONDA'S PROSI’ICC'I‘S: A JAPAN \llCROCOSM 169

has only one thing to sell to pay for them—the skills of her
dynamic people. And, creeping up on the outskirts of her vision,
are competitors in most of her “traditional" product lines. 'l'cxtiles,
clothing, castings, gimcrackery of all kinds—even the new elec—
tronic and optical skills gained since \Vorld \Var II in transistor
radios and television receivers and cameras—can now be pro—
duced in many other parts of the world as cheaply or more cheaply.
Japanese industry must, then, in order to pay for her rising stan»
dard of living and to compete with a growing group of countries
who are following her path, however slowly, toward industrializr -
tion, sell more and more goods in which skills are paramount. To
pay for the raw materials exported in those products and the rising
living standards, the added value of manufacturing must be greater
and greater. And that means moving into more and more sophisti-
cated products—into capital plant equipment, into heavier and
more expensive consumer durable goods, into research and develop—
ment of new products and new markets which can for at least a
minimal time remain in Japanese hands.

Perhaps no metaphor is so apt as the characterization of the
Japanese economy as a bicycle which must be pedaled rapidly,
probably at ever increasing speed, if it is to stay upright and move
forward. The whole Japanese economic experience is summed up
in this. Capital has always been and is likely to remain in extremely
short supply in a country which is only a generation away from
abject Asian poverty. Therefore, the financial structure of the
Japanese economy is always likely to be a rob-Peter-to—pay-Paul
kind of situation. Expanding production is sought in order to
justify growth in the average Japanese company, and that growth
is used to justify continued, extended credit; the markets are
then found one way or another when the production accumulates.
A leveling off of the rapidly accelerating Japanese population from
the 18903 to the 1960s may take some of the pressure out of this
hundred-year-old modus operandi, but if population pressure has

HONDA: THE ;\IAN AND HIS IMACHINES 170

subsided, it has been replaced by a whole new set of demands for
a rapidly increased standard of living and for an overhauling of
the Japanese “social infrastructurc"—the abysmal standards of
housing, the relatively meager diet, the crowded transportation
system, the ghastly level of health care, the deterioration of the
environment, and the absence of sophisticated leisure.

In striking ways, the Honda enterprise parallels the problems
of the Japanese economy as a whole. In the long term the world
motorcycle market may be leveling off; before the 1973 energy
crisis there seemed no doubt of it. Honda had anticipated it by
cutting back production along with other Japanese companies by
26 percent in 1973. Honda has moved into the four—wheel market
precisely because it needs a new product line to continue to boost
its income, a product of much more added value. Its very young
staff, which has been growing at about 10 percent annually, will
as it ages become a larger and larger economic burden for the
company, with the additional load of not only higher salaries but
also of the increasing extra benefits guaranteed under the Japanese
lifetime employment system. Honda faces enormous competition
in the home markets from automobile manufacturers already
established in the business; in foreign markets it faces even
tougher sledding unless its design and manufacturing techniques
are unique and so efficient that it can establish new patterns of
demand (create new markets, as Honda believes is possible) and
sell at competitive prices.

Honda, like Japan in toto, also faces the problem of whether it
can maintain that special quality of its organization and approach
which has paid off in such dividends as unique design and price
advantage.

Much of “the Honda spirit” was the product of the personality
of Honda himself and Fujisawa. In the fall of 1973, they chose to
withdraw from active day-to—day operation of the company.
Neither has said publicly in more than a general way what

HONDAYS PROSPECTS: A JAPAN RIICROCOSXI 171

led to that decision. But it certainly was in keeping with Honda's
firmly held belief that there is a special quality to youthfulness
that the company needed to survive and that he, in old age, could
no longer give. Honda is said to have taken personally a campaign
which Honda executives say was directed by their competition
alleging structural weaknesses in their small Honda N360 car. The
company now has litigation in the courts charging a conspiracy to
libel their product. However ill-founded the accusations, Honda
is known to feel that technology is leapfrogging over his own
experience and design genius. Fuiisawa has also told intimates
that he feels that the size and growth of the company, the com—
plexity of its problems, made it necessary to bring in men at the
top of the business side who were capable of handling new tech—
niques of finance and marketing, if not management approach.

“Honda has always moved ahead of the times, and I attribute
the company's success to the fact that the firm possesses dreams
and youthfulness," Honda said, announcing his retirement. “I can
resign without anxiety about the future of Honda because I am
convinced that the company can continue to move forward with
vitality, cope with various situations with flexibility, and without
losing freshness.”

In a similar statement, Fujisawa noted that the action of the
two Honda executives runs counter to the present trend in Japan,
which is to extend rather than lower the retirement age. In part,
this arises from Japan’s special “generation gap” — not the lack of
understanding between age groups but the enormous numbers of
men lost in \Vorld \Var II in the group between Honda and
Fujisawa (in their late sixties) and the men in their forties who
will take over from them. Fujisawa said, however, that he person—
ally knows of many Japanese companies which are “examples of
enterprises being ruined as a result of misjudgrnents in emergen-
cies ascribable to the old age of the top executives. The older one
is, the less capable he is of drawing mighty plans for the future."

HONDA: THE )IAN AND HIS hIACHlNES 1'72

In any case, the retirement of the two men did not come as a
surprise. In April 1972, Honda had announced on the occasion of
the celebration of the twenty—fifth anniversary of the company that
day—to-day decision—making was being turned over to four senior
managing directors. This system had been established three years
earlier and it was an open secret in the company that the men
were on a “trial run” of operating the company as both Honda
and Fujisawa took a back seat. Honda added, in his usual mixture
of bravado and frankness: “I regard myself as still being young,
mentally and physically, and I don’t think you can beat me.
Realistically, however, I must admit that I nowadays often envy
young people and feel I can no longer keep up with them. The
trend in the United States, I have been told, is that the presidents
of growing companies are in their forties, and that those headed
by people in their sixties are rather stagnant and not vigorous. I
now feel more keenly than ever how wonderful it is to be young.

“We are entering into a new age which requires a new sense of
values, a fresh feeling for harmony between a business enterprise
and society and a new way of management based on these.
Although both the vice—president and I think we are still young,
we both are over sixty. We both feel we are no longer at an age of
[giving] our personal leadership. In fact, it is no longer necessary
for us to say anything.”

Honda alluded to Fujisawa’s long-standing desire to retire,
and said: “Responsibilities have been divided between the vice-
president and me: sales, money, organization, and internal affairs
for him, and technology, manufacturing, and external affairs for
me. Each of us is only half a person, and only by combining the
two can you get one real executive. That is why we agreed that
it is natural for us to retire together when we retire. Only halves
though we were, we have been able to get the work done as we
recognized and supplemented one another in a friendly manner.
Nobody in the world is perfect. A good thing, and an important

MONDAYS PROSPECTS: A JAPAN KIICROCOSM 173

thing in any organization, is for the individual to seek assistance
from others for what is missing in him and what he cannot do,
and at the same tilne spare no effort for maximum utilization of
what he has. I want all of you [employees of the company] to
realize that without harmony among people, you cannot even
maintain, let alone develop, a business enterprise."

Honda has passed on the leadership of the company to an
enginecr-businessman like himself rather than to a man steeped in
the commercial aspects of the company. That is certainly one
indicator that the unique character of the company may be pre-
served at least to some extent, with decisions made first from the
standpoint of engineering and technical innovation. Kiyoshi
Kawashima has been with Honda almost from the beginning of
his postwar operations and it is generally believed in the company
that he mirrors Honda’s personal preferences and attitudes.

The fact remains, however, that the company was very much a
product of the postwar period and the situation has changed
radically in Japan. Many observers of the Japanese business world
believe that the handful of Japanese engineer-led companies, like
Honda, were a peculiar product of the postwar disruption of
Japanese society. They appeared on the scene because it was a
time of turmoil, improvisation, and opportunity and it is felt that
it would not be possible for such individuals to again become the
leaders of such large manufacturing operations. As one observer
puts it, “The ice melted in Japanese society. But it has frozen over
again.” When lbuka of Sony, another example of the engineer-
businessman who prospered in the postwar period, was asked
what he thought of his theory, he said that it might well be true.

lbuka believes that this arises, too, out of the nature of Japanese
society and its difference from the \Vcst. He says that if you draw
a diagram, a triangle of the pattern of company employees, and
sprinkle through it dots representing superior people, you find a
vast difference between Japanese and American and \Vcstern

II()NDA: THE MAN AND HIS MTACHINES 174

European companies. Because of the traditional Japanese patterns
of slow social mobility and the emphasis on chronological seniority
which permits men to rise in a bureaucratic establishment only at
a certain pace, you find superior talent at all levels throughout a
Japanese company. But in the United States, he says, where there
is very rapid social mobility, superior talents are rewarded very
quickly and the superior talent rises rapidly to the upper echelons
of the company. In Europe, he argues, where class and other social
distinctions are even more rigid in some ways than in Japan—
where, at least since the mid—nineteenth century, there has been
movement of technicians and entrepreneurs upward without re-
gard to inherited caste—the superior talent is concentrated at
the top. Ibuka draws one conclusion from this analysis: Japanese
companies operate more efliciently because at every level in their
organization there are more gifted men who remain patiently at
inferior positions longer, or even permanently.

There will be a great strain in the Honda organization itself as
mass production and systems take over from personal relationships
like those which have characterized the Honda-Fujisawa partner-
ship in the past.

A good deal is riding on the success of the Civic CVCC auto-
mobile, which was launched early in 1974 in Japan and went on
the market in volume in the United States in the winter of 1974—
1975. Honda people point to its development as an example of
what was possible under the peculiar conditions of their company,
at least peculiar to Japan. If it is successful, it may well dictate the
pattern of research and development in the company in the future
and the way the company development will go.

The American trade magazine Road Test welcomed the new
Honda with its pre—CV CC engine and called it the “1974 Import
Car of the Year.”

“We’ve tested it,” said the magazine, “scrutinized it and driven
it extensively, and the conclusion is that it’s well made, well de—

HONDAYS PROSPECTS: A JAPAN hIICROCOShI 173

signed, comfortable, and has more than adequate performance and
gives every indication that it is capable of rendering many thou-
sands of miles of service with only routine care and minimal
maintenance." Road Test also pointed to the car’s fuel economy
— the best mileage of all 1974 models, a judgment concurred in
by the US. Environmental Protection Agency. In Europe, the
Civic came in third in a contest for the best car of the year held
jointly by six leading newspapers polling fifty prominent automo-
bile journalists.

Honda faces several difficult hurdles in the marketing and dis—
tribution field as it enters the automobile business in a big way.
At home, automobile ownership may flatten out appreciably as
Japan feels the full weight of the rising world energy costs. There
was already growing dismay among some Japanese planners—
as there had earlier been in the United States and Europe—at
the enormous amounts of capital that were necessary to build a
road network to accommodate the vast new automobile popula—
tion. There certainly was an argument that the increase in automo—
bile ownership was further adding to the imbalance in Japanese
life. (One of the jokes current in the early 19705 was that with
relatively cheaper prices for cars, gasoline, and upkeep for a motor»
car— including the prime minister’s office's statistics showing how
much cheaper taxi fares were in Tokyo than elsewhere in the
world—and with the incredible sums needed to rent or\buy an
apartment, a solution to Tokyo’s fantastic living costs might be
to live in taxis or cars on Tokyo's growing elevated highway corn-
plex.) Japanese railroads were also beginning to feel the crunch as
more and more traffic moved to autos and trucks—threatening
one of the world’s best mass transport systems. It also seemed
quite possible that the government economists might again see the
need to force consolidation in the automobile industry in order
to further develop and strengthen competitive powers of the
Japanese industry worldwide. In Western Europe, there was more

HONDA: THE LIAN AND HIS LIACIIINES 176

and more thought given to the possibility that the twenty-odd
manufacturers would eventually be trimmed by the economics of
the situation.

Ironically, because of the flattening out of the domestic automo—
bile market in 1974, Japanese exports reached an all—time high —
2,618,087 cars including 360cc minicars up 27 percent from 1973.
The total was up 19.1 percent over 1973.

The United States continued to be the chief market, importing
almost a million cars —— up almost 18 percent over 1973. However,
exports were up to all areas except Europe. Sales to Southeast Asia
climbed by almost a third.

All told, exports amounted to 40 percent of Japanese production
in 1974 although total production was down 7.5 percent. Industry
sources admitted that the steep rise in exported vehicles resulted
from a campaign to take up the slack left by descending domestic
demand.

The question is whether in 1975 and after the Japanese can
continue to rely on this kind of switch, whether the long—term
results of the energy crisis and the problems of the Detroit and
European carmakers is not going to curtail such growth.

As 1975 began, Japanese carmakers werc projecting production
targets that some observers, like The Economist in London, pre—
dicted were bound to bring on dramatic confrontations with
Western import restrictions as well as intense competition among
the world producers. Some observers believe the massive recession
which struck Detroit in 1974 may herald the end of the huge post-
war rapid expansion.

“If you look at the world automobile market as a whole, there
is no denying that we are approaching some sort of saturation
point,” says Kihachiro Kawashima, one of Honda’s senior man—
aging directors chargcd with international sales who cut his teeth
on Honda’s motorcycle market in the United States. “But this
saturation point represents a huge figure, whether you want to
get a 5 percent share, a 10 percent share7 or a 20 percent share.

HONDA,S PROSPECTS: A JAPAN KIICROCOSKI 17

\l

/

\Ve still believe it is possible for us to enter this community of
automobile manufacturers and stay alive. Some manufacturers
may merge, or some may even go bankrupt. But we feel we our»
selves are capable of staying in business within the automobile
industry because of our technical capability and our sales network,
and because we have the widespread support among the public
because of our Honda name.”

Honda was looking to the United States as a major market for
its new car, perhaps eventually for half of production. And the
prospects were bright. A new, economical, small car with a “clean"
engine seemed to be what the doctor ordered — particularly after
the full, long-term impact of the energy crisis of 1973 was felt. Yet
Honda’s decision to turn down the Ford ofier to sell its cars in the
United States (as Chrysler had been doing for Mitsubishi with its
Dodge Colt) meant setting up a nationwide distribution network.
Automobile industry sources believe that a dealership of less than
a thousand distributors around the country would not be an
effective network. Honda would not be able to use more than 10
percent of its eighteen hundred motorcycle dealers as automobile
distributors to have national coverage in the United States. Honda
has decided to go slow, developing the market over a longer period
than it did with its motorcycles. Although there were requests for
more automobiles from the US. dealers, Honda was having
trouble meeting the domestic demand in Japan.

Honda spokesmen have projected a 20 percent increase in their
US. auto sales in 1975 from the 43,000 sold in 1974‘ They expect
to have 600 dealers by midyear, up from 420. Honda buyers are
going to get the option of the new CV CC engines in all states but
California, where it will come as standard equipment. Honda ex-
pects to sell about half of the cars with the CVCC engine and
that in future years that percentage will climb. Honda announced
the construction of a six—million—dollar parts center in Moorestown,
New Jersey, to keep up with this expanding sales network.

By the spring of 1974, the energy crisis had changed the outlook

 

The S 800 sports car being produced at the factory in Sayama, Iapan,
during the late 1 9603.

 

The 1975 Civic.

NOILVHOdHOI) HOLON VUNOH

NOLLVHOdHOO “GLOW VUNOH

MONDAYS PROSPECTS: A JAPAN \lICROCOSM 179

for all small cars. Honda dealers all over the United States were
crying for more units and Honda could not keep up with the
demand. Demand for motorcycles, which had been thought to be
leveling off or at least turning away from motorcycles as transpor—
tation toward specialty oE—street vehicles, suddenly boomed. Sales
in early 1974 were running 150 percent over 1973—and only
stopped there because there were no machines available in many
American dealers’ show windows. But by the fall, the oncoming
recession had hit all manufacturers' sales. At this writing it is
obviously much too early to predict the ultimate outcome of the
effects of recession, inflation, and the energy crisis. The zigzag
pattern of the rapid switch to smaller ears in the 1074 model year
and a partial adjustment back to “big” cars in the 1975 model
year and government long-term pressure for fuel economy is a
maze. But it seems clear that smaller cars or more economical
engines will have a new role to play in what looks like long-term
higher gasoline prices all over the world, however much the
shortages of fuel may be overcome in the short run.

The 1973 oil crisis brought disaster to the Japanese automobile
business in the first quarter of 1974 — a 30 to 40 percent slump in
sales which the makers, generally, thought would not be temporary.
It was generally seen as the end of the long climb that Japanese
automobiles had made over a decade. The drop in demand was in
part the result of the sharp increases in the price of fuel, but it
also reflected a rise in auto prices themselves.

The Japanese automobile makers had raised their prices in the
domestic market by 7 to 8 percent in the fall of 1973. It was
partly an expression of rising costs—particularly because of the
new antipollution devices. But it was also an expression of the
unrestricted demand in the market. But a second round of price
increases during January 1974 reflected the increased costs of auto
part—makers. Prices for automobiles rose from 400,000 to 600,000
yen and from 500,000 to 700,000 yen for the most popular
1200cc to 1 500cc vehicles.

HONDA: THE THAN AND HIS AIACHINES 180

Observers of the industry in Japan believed the industry was in a
bullish mood, thought that it could maintain a cartel approach to
pricing, and all companies would follow suit. But Honda, true to
its maverick reputation, refused to go along with the second round
of increases. That meant that Honda, with only about 9 percent
of the market, was holding out against the rest of the industry.
The automobile industry held its breath to see what would happen.

By midspring, it was clear. Both Nissan and Toyota, the indus-
try leaders, had domestic sales off by 40 percent. Honda, by con-
trast, had registered a 76 percent increase in sales in March over
last year and seemed to be heading right on up. But observers in
Japan were convinced that it wasn’t simply price that was changing
the picture. It was also that Honda’s lower gasoline consumption
and its new CV CC engine (which had been installed in the Civic
domestically before it became part of the exported product to the
United States) had had an impact on a public much more con—
scious of cost as a result of the new spiral of inflation set off by the
oil crisis.

“A business enterprise cannot be managed with a weak will or
pretension,” Honda president Kiyoshi Kawashima said. “At a time
when society is in an unsettled frame of mind because of shortages
and rising prices, the business enterprises themselves should not
be in an unsettled state. Our holding the price level is a reflection
of our determined effort to maintain equanimity.”

The fight over pricing was the first big decision of the new
Honda management group. But it was widely reported that it had
the full support of the Supreme Adviser, Honda, who heard the an—
nouncement that the company was holding the line on prices on a
car radio in southern Kyushu Island where he was traveling.

Yet sales are not going to be the whole story.

Honda has estimated that it could sell 125,000 to 150,000 a
year in the United States when its new Civic with the CVCC
engine is established. In Japanese automobile circles, it is generally

IlONDA’S PROSPECTS: A JAPAN MICROCOSM 18]

assumed that Honda could not move into these kinds of figures —
even the 2 50,000 cars a year it told the Environmental Protection
Agency it eventually hoped to sell—without a major expansion
of its manufacturing facilities. ’l‘wo modest new plants are now
under consideration. But even for the half—million»automobile
production figure in all models Honda people have talked about,
a new, huge integrated plant would be needed. Financing for such
an expansion of the company’s capital plant would be a major
problem. Ironically, in the past Honda has been an extremely
conservative financial operator. Perhaps that was explained as
much as anything by Fujisawa's own bitter memories of his
father’s wheeling and dealing in minor finance. Honda himself
has taken a very jaundiced view of the Japanese stock market, at
one point answering criticisms of a price fall on Honda's stock by
saying that he felt no personal responsibility for the price at all,
that it was a product of the manipulation in the stock exchange,
that he, Honda, was responsible only for the original 50 yen that
was the issue price of the Honda shares and a fraction of the
market value.

One of the curious things about the Honda company, an arch
conservative Japanese banker says, is that the company has pur-
sued an extremely “conservative” policy in its financing. For
example, it has continued to patronize the banks which first lent
Honda money and in the same fashion that it borrowed when the
company was small. It did this even though it would have been
possible to go to other financing patterns as its business grew into
a multimillion—(1011ar corporation. In the spring of 1975, Honda
announced a bond flotation in the Middle East— one of the first
Japanese companies to do so. Honda, unlike most Japanese compa
nies, has always made a sharp distinction through the years between
short»term working capital and long-term development through
borrowing short—term and refinancing at frequent intervals, thus
saving the dillerenee in the high interest rates.

HONDA: THE AIAN AND HIS I\IACHINES 182

One result of this financial structure is that, despite its reliance
on the Mitsubishi Bank, Honda has been able to maintain its inde-
pcndence of the zaibatsu groups, the “families” of large Japanese
corporations which deal, if not exclusively among themselves, with
particular preference for their members. Had Honda relied on the
refinancing of short—term capital for its long-term development,
it might have fallen victim (as other Japanese companies have) to
a greater reliance on the banks, particularly the zaibatsu banks,
for its continued existence. Honda has refused, too, to issue shares
at the market price but has continued to issue new capitalization
through disbursement of shares at issue price to its stockholders.
It has not chosen, either, to raise money by convertible debentures,
a method which even some conservative Japanese firms have
chosenufor the capital they have needed for expansion. Honda,
unlike many other Japanese companies who have seen their fixed
assets including “goodwill" rise spectacularly with the growth of
the post—VVorld War II economy, has also chosen to keep its
public books very strictly. Profits have been stated almost exclu-
sively as operating profits, and, unlike other companies, profits from
the sale of land or other assets as well as the company’s profits
from dealings in its own and other securities have not been pre-
sented as part of its profit and loss picture.

As the demands for capital increase — as they are increasing for
Japanese industry as a whole — there will be conflicting pressures
on all these policies.

16

 

 

On the Road to

Multinationalism

HONDA’S ENORMOUS SUCCESS in promoting its products and motor,
eyeles generally in the US. and Japanese markets reached even
the ears of Communist trade officials in the USSR in 1967. A
London Times dispatch reported how an unusually large and dis
tinguished Soviet group of trade officials, trying to learn how to
sell in the West, heard about some outstanding successes. “'llie
Deputy Minister for Foreign Trade and the Director-General of
the Soviet Union’s new advertising agency, Vneslitorgreklama,
were among those who heard . . . how a japanese motorcycle
manufacturer had to overcome the American image of the motor—
cyclist as a ‘hooligan’ before they could penetrate into the teenage
market in the US.

HONDA: ’I'IIE hIAN AND HIS hIACHINES 184

Yet Soviet cognizance of Honda’s success was as belated as so
many other Russian cultural lags in the Western world of com-
merce and industry. At the same time that Honda had been
penetrating the American market, it had been expanding into a
wider-ranging market—not as large as the United States—but
widely scattered over the globe. In 1962, Honda established a
subsidiary in Belgium to make “mopeds,” the small motors at-
tachcd to bicycles which have been a durable and constant tradi—
tional European vehicle almost since the invention of the first
motor—driven bicycles. The moped was phased out in Iapan in
1952, but its popularity continued in Europe, particularly in the
Low Countries, due to its fuel economy and the widespread
European taxes 011 horsepower and weight of vehicles. (Ironically,
with the enormous increases in fuel costs and the growing
reemergcnce of the bicycle as a sport and commuting vehicle in
the United States, mopeds began to make their appearance in
America in 1974.) In 1961, Honda set up a marketing subsidiary
in Hamburg with an eye to focusing on the Common Market. In
1970, a Honda proposal to set up an assembly and manufacturing
operation in Italy caused a tremendous furor. At this writing not
only has permission been denied the Italian partner to start up
manufacturing but the Italian parliament has passed a law aimed
directly at excluding Honda from the market. Italian bureaucrats
threaten to take the whole issue to the Common Market's council
in Brussels in an apparent effort to halt further erosion of the
once extremely profitable and dominant Italian scooter market
all over the Continent. Ironically, the award came as the Journalis-
tic Center of Rome presented Mr. Honda with a prestigious award
—prcviously given to President Georges Pompidou of France—
the so-callecl Oscar del Commercio, the European award Mercurio
(1010, given for “outstanding achievements in productivity and
European economic cooperation.”

Elsewhere throughout the world, Honda’s fame has grown in an

ON THE ROAD TO {\IUIiTINA'I‘loNAI.lS_\I 18;

astonishing way. His Majesty King Hussein of Jordan is the entliu
siastic owner of a CB-750 Honda motorcycle, a gift from the Honda
distributor in his country, Arab Automobile & Trading Company.
(\Vhen it was presented, Hussein immediately climbed on the bike
and rode it from one of his palaces to another with a cheering
crowd egging him on.) In Holland, the Belgian Honda Motor
N.V. hired a “showboat” which took Honda products on a twenty-
five—day trip through the country’s canals and waterways. Although
the Honda people have broken through only partially to supply
police forces in the United States, I'Iondas are favorites of police
in Argentina, Australia, Belgium, Brazil, Burundi, Canada, France,
Guyana, Indonesia, Madagascar, l\'lalaysia, the Sultanate of Muscat
and Oman, Morocco, Nepal, Peru, Saudi Arabia, Senegal, Singa»
pore, Surinain, Syria, Venezuela, and Zambia. \V hen Queen Eliza-
beth II arrived on a state visit to Bangkok, Thailand, in early 1972,
she was escorted through Bangkok’s infamous traffic jams by a
fleet of sixty Hondas—sold by a Honda subsidiary assembling
machines in that country since 1966.

In the Philippines, hundreds of young motorcyclists join the
annual rVIariwasa-Irlonda Cavalcade sponsored by the Honda dis-
tributors there, which is intended to show the endurance of the
Honda machines. In 1968, it covered a 1,125—mile route through
Luzon Island as “goodwill ambassadors,” donating bus stop signs
and bus waiting sheds along the way. The roads were often so
bad that the group traveled single file or two abreast, stretching out
for as long as six miles on highways. In Papua and former Austral»
ian New Guinea the administration purchased 230 Ilonda 90
'l‘rail motorcycles to be used by the territories' administrators
through the almost virgin baekcountry where headhunters still
sometimes roam and where no roads exist. The machines are used
to cover jungle tracks, to ford fast-flowing streams, and to nego—
tiate steep slopes with loose rock, with officers sometimes having to
travel days between villages without any other outside communi-

HONDA: THE bIAN AND HIS BIACIIINI‘IS 186

cation. Public works departments in the British Solomon Islands
bought cycles from Honda for the same purpose, trusting to their
reliability, replacing larger British—made motorcycles for liaison
between construction sights. In New Zealand, shepherds have
switched to Hondas for herding their flocks with the only com—
plaint that the horses and dogs also used in the roundups have sore
feet from keeping up with the faster vehicles. Partly to overcome
the problem, John Dale, Honda’s New Zealand distributor, de-
signed a special trailer car for carrying the 45—to—55—pound sheep
dogs on the shepherds’ trails. ”Very often,” Dale said, “a farmer
has to take a ewe back to the base of the farm, and in this case the
(logs walk while the mother and the lamb are comfortably trans-
ported. Or the bike-driven trailer can carry hay and other feed to
the top of the hill because, for some biological reasons which no-
body can explain, a ewe invariably gives birth to her lamb or lambs
on the highest point on the farm."

In Canada, Honda’s advertising agency, McCann-Erickson Ad—
vertising Company of Canada, Ltd., organized a team of attractive
teenage girls to give demonstrations at fairs and other public
events throughout Ontario. Six of the “Honda Girls,” as they be-
came known throughout Canada in 1970, took part in a massive
parade held to promote the Can-Am, Canada’s foremost motor
race. Canadian prime minister Pierre Trudeau, famous for his im-
provisations among crowds, arrived to ride a Mini-Trails Honda
bike to cheers from the crowds. In Communist Poland, a standard
Honda 360 sedan won the highly competitive Polish Rally Champ-
ionship of 1969. “Though there are very few Honda cars on Polish
roads,” the winner Maciej Iasinski of Warsaw wrote Honda, “my
car was invariably the center of interest during the rally and here I
should add that the national rally program is contested by such
cars as brand new Porsches like the 912 and 9118, Renault Gor—
dinis in Group 2 form as well as the Alpine models.” In the Union
of South Africa, Midmacor, the Honda distributor, dreamed up a

ON THE ROAD TO RIUL’l'lNATlONALISAI 187

new wrinkle. He supplied loan vehicles for any Honda motorcycle
owner who had to bring his vehicle into the shop for repair. In
the Alaskan Arctic, there is a Honda dealer in Anchorage wlro sells
his machines to Eskimos, about half his customers. In Nome, a
distributor reports: “I see people carry motorcycles on their car to
the end of the city and then use them for hunting.” “Three or four
of the Canadian snowmobiles are sold here,” Steve Dickson says,
“but their engines aren't powerful enough.” Dickson says one of
his Eskimo customers reports he has had a machine for six years
and that “it is as good as brand new. \Vhen it gets really cold
around here, say 4; degrees Centigrade below zero, I sometimes
have difficulty starting the bike. But on usual winter days of about
30 degrees below zero, it starts with just the choke with no trouble
at all. I use no special equipment to protect my Honda for the cold
weather.” Not exactly like selling refrigerators to the Eskimos,
but . . .

All the ballyhoo and solid craftsmanship have paid off. Honda
has assembling operations in collaboration with local firms, or man—
ufacturing or simply technical tic-ups for servicing, with twenty-
nine companies around the world outside the United States and
Japan as of June 1974‘ In the Philippines the assemblyanauufac—
turer is 30 percent Honda—capitalized; in Indonesia it is a joint
venture in which Honda holds 60 percent of the company, in Thai-
land the same. In Belgium, Honda has a 100 percent—owned sub-
sidiary. In the summer of 1974, Mr. Honda visited the Brazilian
plant in one of his “thank you” postretirement visits around the
world and Honda officials believe that the Brazilian market is
about to take off, “about where the US. market was in 1960."

Honda is such a worldwide phenomenon that the Tokyo opera-
tion is now shipping Honda products and parts to a total of 158
countries. The fact that Honda had started his little operation so
many years earlier with a part of the company slogan that it
would maintain international principles and standards is no longer

HONDA: TUE .\IAN AND HIS IVIACHINES 188

a rather naive wish. Fujisawa and the Honda sales management
team, as always ready to philosophize about their successful activi-
ties, say their two cardinal principles in this international operation
are to create a market by exploring demand and tailoring attractive
products to it, and to set up a precise marketing network with the
country’s individuality taken into account. In France, for example,
Honda developed a special version of its power tiller-cultivator
which is designed particularly for the vineyards throughout the
country. For almost a decade Honda’s product has dominated the
market against all comers. In Australia, Honda redesigned its
standard trails bicycle with special sump shields, big clearance
mudguards, knobby tires, very low first-gear ratios, and other inno-
vations to meet the particular needs of the outback sheep and min—
ing operations. Bennett Honda, Pty., Honda’s partner Down
Under, said “Property owners have found the reliability of modern
motorcycles for farm and station work, boundary riding, mustering
and droving quite remarkable. As one grazier said recently, their
economy and ability to move quickly across the roughest terrain
far outstrip the horse. You don’t have to catch it in the morning,
and if it throws you, it doesn’t gallop off home! They can be ridden
at less than a walking pace of the sheep, overheating even in our
hot inland is no problem, and dust- and waterproofing are ex-
cellent.”

In March 1974, Honda headquarters in Tokyo revealed a plan to
dramatically expand its overseas manufacturing operations in mo-
torcycles at a rapid clip over a two-year period. The twenty—nine
overseas companies assembling or selling Hondas would then be
increased to fifty.

Honda plans to move into each market with a particular pro—
gram to fit the local situation. In some it would be a simple as-
sembly operation of Japan-produced parts; in some, progressive
manufacture locally of parts; and in others, production of parts
that might be exported to go into vehicles assembled elsewhere. It

ON THE ROAD TO I\IUl.,'I'INA'I'IONALIS}I 189

was what one Japanese newspaper described as a “program for the
international division of labor” and obviously was a 110d in the
direction of the increasing criticism in the developing countries,
particularly in Southeast Asia, of Japanese business ethics, which
had in the past treated them only as captive markets for manu
factured goods shipped from Japan, itself.

Honda was at the time already assembling or in the process of
setting up assembly operations in Peru, Saudi Arabia, Egypt, Iran,
and Turkey, and a manufacturing of parts operation was sched-
uled to start in a more ambitious program in Indonesia. Honda
spokesmen said the new program took into account the fact that
demand for motorcycles would rise in the developing countries,
but because of limitations on production in Japan and a growing
nationalism in the developing countries, export of vehicles from
Japan alone would not be sufficient.

In Peru, Honda intends to establish a joint venture company
which would produce 30,000 two-wheelers by the end of 1975. A
Honda technical team departed for Saudi Arabia in the spring of
1974 to set up a production plan there with a capacity of 5,000
vehicles a year. In Turkey a joint enterprise with Turkish investors
would produce 3,000 units annually. In Iran, Honda presented a
plan for production to the govermnent.

The Indonesian company was established in 1973 with a com»
pany that had previously only been assembling Honda products
there. It was to go into production of two—wheelers and mufflers
in the initial stage. A similar program was being studied for both
the Philippines and Malaysia.

And again, as so often in the past, Honda was picking up some
criticism from other parts of the industry that it was moving too
quickly into a very tricky area.

The criticism did have one important foundation, however, and
it was one that applied not only to Honda, not only to motorcycles,
but to all Japanese companies.

HONDA: 'l'IIE KIAN AND HIS BIACIIINES 190

Japanese manufacturers including Honda found themselves in
the throes of a great dilemma in 1974: Costs were rising rapidly in
Japanese manufacturing. The spring wage increase, an annual
affair in which the trade unions mount an “offensive” for large—
scale salary increases, produced a 32 percent wage hike. In the past
these annual increases have been based on a combination of the
growth in productivity—calculated as the growth in the gross
national product (GNP) —and the inflation factor. All through
the last two decades, increases have ranged as high as 15 to 20
percent as the GNP has moved up at an average of over 10 percent
and the inflation has been as high as 10 percent annually. But in
1972—1973, Prime Minister Kakuci Tanaka’s much publicized pro-
gram to decentralize Japanese industry and to end the growing
problem of air and water pollution and spend larger amounts on
the so—called social infrastructure (hospitals, schools, etc.) resulted
in a massive inflationary spurt. That was capped by the energy
crisis of the fall of 1973 which hit Japan particularly hard, with its
almost total dependence on imported energy. The oil embargo by
the Arab states and their price hikes and cutbacks in production
pushed the rate of inflation to 27 percent.

In order to stem the inflation, Tanaka’s finance minister (and
chief rival for leadership of the Liberal Democratic party), Takeo
Fukuda, slapped on the credit brakes. By midsummer 1974, the
inflation had been trimmed back to well under 1 percent a month.
But the cost was horrendous: The Japanese economy Jerked to a
halt and the growth dropped off to a negative rate. While a huge
debate continued on what the new economic policy should be,
revolving around the rate of growth, Japanese companies began to
pull in their belts, and for the first time since the beginning of the
Korean War, they pondered the problem of how to continue to
operate with the possibility that there would not be an enormous
momentum of growth in the economy and in their individual
companies.

ON THE ROAD TO I\IUL'I‘INATIONALISRI 19]

Rising labor costs —as a result of the rapidly improving Japa«
nese standard of living, probably the most rapid of any labor force
in the postwar world — will become an overwhelming problem for
all Japanese industry. It can be met if expansion of sales is so
great that it continues as a fixed percentage of overhead, or a
declining factor. Some Japanese companies had already responded
to the new challenge by moving at least part of their manufacturr
ing abroad— even before the oil crisis. Sony, for example, seeing
the writing on the wall, had opened a color television production
company in San Diego in order to save its huge American market
and was building plants in Britain and France. Kawasaki, with its
huge zaibatsu backing, one of Honda's three Japanese competitors
in the motorcycle business, has started to build a motorcycle plant
in Nebraska to sell its US. market. Suzuki, another of Honda's
competitors, announced in early 1975 a five-iiiillion—dollar U.S.
advertising and publicity campaign along with a 43 percent increase
in the number of its dealers. 'lhis was designed to eounteraet the
severe slump that had overtaken the US. motorcycle market. R. L.
Polk & Company, which tabulates cycle registrations, reported a
16 percent drop in sales for 1974 against 1973's 1.2 million vehicles
because of the growing recession. Suzuki also talked of the possi-
bility of manufacturing, perhaps with a US. partner, in North
America to cut its costs, and there were rumors——denied by its
management — that it might merge with the huge Japanese autos
mobile manufacturer Toyota.

Other Japanese companies were also turning to the United States
and other countries to set up manufacturing operations with its
more flexible and cheaper labor force; for example: a man’s-suit
operation in New York; ministeel plants in New York (and IndO»
nesia) to produce billets and ingots for shipment to Japanese finish—
ing mills; a cottongrowing and yarn operation in Georgia—to
produce for the Japanese home market In part some of this would
have been inevitable simply because the Japanese were, even before

HONDA: THE BIAN AND HIS bIACIIINES 192

the inflationary-recession—energy crisis, moving into a period when
the shortage of manpower would be the most important impedi—
ment to further Japanese growth in manufacturing.

Honda’s decisions were not so dramatic but they were significant.
From January to July 1974, world motorcycle demand was up 25
percent and that meant that Honda could sell all it could produce
—at least until the worldwide recession began to take its toll in
late 1974. Japanese domestic sales were up, too, by 15 percent.
Two new factories were going up. One in Kumamoto City on the
southern Japanese island of Kyushu was a way of going in search
of the labor that had been draining off that island annually for the
past decade, moving to the manufacturing centers in the main
island of Honshu. Yet the size of these two new plants was going
to be limited, dictated by the Japanese government’s restrictive
credit policies which attempted to halt capital plant outlay and
thus help curb the inflation of Japan 3 overheated economy.

Honda moved in other directions, too. The Honda International
Sales Corporation (HISCO) was taking .over Honda’s downtown
building and will market smaller Ford vehicles in Japan — another
sign that the Japanese competitive advantage in some areas was
waning. The cars Honda will sell, while small by North American
standards, are a line of compacts and subcompacts which the Japa-
nese consider standard size against the main lines of Toyota and
Datsun, which had done so well in the US. market. Honda also
was violating one of its founder’s basic rules—it had gone into
the coffee importing business because of certain currency restric-
tions in Colombia which made it easier to get paid for sales there
by importing the increasingly popular drink to Japan. Also, the
company had gone into one of Japan’s most rapidly developing
businesses—food—by starting a cattle—meat growing operation
in northeastern IIonshu.

These moves pointed up for Honda—as they do for Japanese
industry as a whole — the growing multinationalism of the enter-
prise. Japanese companies, which have so long thought only in

ON THE ROAD TO )[ULTINATIONALISAI 193

terms of importing raw materials, adding Japanese labor, and sell»
ing at highly competitive prices throughout the world, were finding
that it was no longer enough. The big trading companies — led by
the two giants Mitsubishi and Mitsui—were setting up multinzr
tional headquarters in the United States and Europe. i\'[itsubishi
was looking for partners in manufacturing operations in the United
States. Mitsui had set up a number of national companies in
liurope, the United States, and Latin America, with manufacturing
and investment aims rather than just sales of Japanese goods.
Already the biggest of the Japanese shoji, trading companies, were
selling products to third countries—that is, buying in a country
other than Japan and selling in a country not Japan. It accounted
in 1973 for 7 percent of all trading companies’ business.

These investments —along with big purchases of real estate in
the United States and Europe —— accounted for the enormous spurt
in Japanese overseas investment in 1973. The book value of Japa—
nese overseas holdings rose by $3.5 billion in one year to a total of
$10 billion. Japanese investment abroad had grown over a twenty—
year period, from 1951 to 1971, by less than $5 billion. A huge part
of the new investment — over 40 percent — was in Southeast Asia,
the old area of Japanese concern. But as the noted Japanese econo—
mist Saburo Okita pointed out in an article in the American journal
Foreign Afiairs in the summer of 1974, the old concept of the
East-Asia Co-Prospcrity Sphere which had led Japanese militarists
and their bureaucrats into the attempted conquest of China and
World War II no longer makes much sense if only for the simple
reason that the huge Japanese maw needs agricultural produce and
raw materials on such a scale that they are not available east of the
Malacca Strait, the old proposed southern limit of the “sphere of in-
flucnce.” Japanese business is almost hysterically in search of raw
materials all over the world —— iron ore in Brazil, oil in the Middle
East, Burma, and Siberia, timber in the United States, Indonesia,
and Africa, copper on three continents, etc.

In a survey taken by the Export—Import Bank of Japan on the

HONDA: THE l\IAN AND 1115 AIACIIINES 194

whole problem of multinational expansion, 81 percent of the busi—
nesses already abroad expected a large expansion of their opera-
tions. Of the 424 companies reporting in the survey, 284 had plans
for production facilities abroad, 164 for introduction of new prod—
ucts to foreign markets. Toward 1980, the Japanese government’s
Committee to Examine Industrial Structure says, Japanese over—
seas investment will reach some $26 billion. (As a comparison, that
would exceed the huge current US. investment in Canada.) The
companies expect the annual rate of investment to bc phenome—
nally high —27 percent in 1975, rising to a total dollar figure of
$3.5 billion annually by 1980. (Note that that figure was already
reached in 1973, in part a function of the peculiar Japanese pay—
ments surplus but also rather typical of past Japanese economic
performance which has exceeded expectations.) The committee
sees these Japanese investments taking three forms—more than
half into the development of raw materials resources for Japanese
manufacturing, a third to be invested in Southeast Asia taking
advantage of large, virtually untapped labor pools, and the re-
mainder a huge leap forward in investment in the United States.
These latter two projections are based on one important considera-
tion — how can Japan hope to continue to secure its huge markets
for Japanese products in markets in Southeast Asia and the United
States without redressing the balance of payments with investment
and purchases arising from those investments?

Yet, assuming that the shakiness of the world economy brought
on by the energy crisis and worldwide inflation does not tumble the
whole pattern of international trade and investment, the Japanese
are going to face two extremely diflicult problems as the nature of
their industry shifts from a purely export-oriented one to multi-
national manufacturing and sales: Can the peculiar “Japanesencss”
of her successes over the past twenty-five years be transferred onto
the international scene? And, second-«which accounts for why
the government has studied and restudied the problem of “going

ON THE ROAD TO )[ULT]NA'I‘IONALISRI 19;

multinational” since 1968 without coming up with the usual
clear-cut government—business consensus on what to do — how can
the unique historic cooperation between Japanese government and
business be transferred into the international field?

On the first score, there is little doubt that Honda, perhaps even
more than some other Japanese companies, may have problems.
Can one imagine a white-suited, Honda-style manufacturing opera—
tion set up in Peoria? Perhaps. Sony reports that productivity in its
San Diego plant is as good or better than in its Japanese plants —
including one which is the most highly automated and advanced
electronics plant in the world. The second concern may be less
important to Honda than other Japanese companies; from its
beginnings, Honda has not played a hand close to the Japanese
government.

Yet Honda will have to change rapidly if it is to play in the
league of the huge multinationals still growing in the United States
and rapidly arising in Europe. Financing, for example, so conserva-
tive in Honda’s history, might have to take a new turn to get at the
kind of credits that are necessary for massive, low-cost expansion -—
particularly in automobiles. If the Civic with its new CV CC engine
establishes a large market in the United States, Honda may have to
go through the same agonizing decision which Volkswagen has
made (at this writing still ambivalent) and Volvo (building a plant
in the United States) to maintain that market.

One important way that Honda will seek to lick its problems is
by developing not only new products but also new applications.
The company produces, for example, a whole line of what it calls
“power products" — compact and reliable generators, outboard
motors, tillers, and multipurpose engines. Export sales of these
products have increased from about 100,000 in 1971 to more than
150,000 in 1973. Honda is now proposing to boost these sales to
half a million units by 1976 in the domestic and export markets
(with 370,000 marked for export). Honda hopes to cash in on the

HONDA: THE MAN AND HIS ‘MACHINES 196

trend of many manufacturers to substitute more durable small
power packages in their original equipment rather than the “throw—
away” engines which have dominated in some fields. Honda is now
gearing up a massive advertising campaign to boost these sales.

Honda is successfully pushing its wide range of outboard motors
for boats. It launched in 1972 a unique four-stroke, 7.5—horsepower
outboard which was pollution-free (no exhaust fumes containing
oil) and with an overhead crankshaft water-cooled engine that
avoided vibration. The engine was easy to use and had several new
safety features.

Honda’s small portable generators have had a worldwide success.
They have been used all over the world in a variety of jobs—
disaster‘relief in the Philippines, in a student-operated battery—
recharging service at one of the Japanese ski resorts, and as a
portable source of power for a woman confined for forty years in
an iron lung in England.

Honda has brought out a new line of Water pumps, designed for
portable and emergency use. These units seem ideal as part of the
world effort to increase agricultural acreage and food production.
They complement the older Honda line of power tillers, which will
inevitably become a part of the landscape in the potentially highly
productive agricultural regions of Southeast Asia and Latin Amer:
ica as they have in Japan, where small man-operated p0wer tillers
have become a mainstay of the garden agriculture which has given
Japan some of the highest per-acre yields in the world.

In all these products, as in the motorbikes that made the name
famous, the accent is on quality. And it will be there—if any-
where — that Honda will meet the challenge in a new competitive
age.

17

 

 

Taishoku

\\

LOOKING BACK, in my work, I feel that I have made nothing but
mistakes, a series of failures, a series of regrets,” Honda says. “But I
also am proud of an accomplishment. Although I made one mistake
after another, my mistakes or failures were never due to the same
reason. I never made the same mistake and I always tried my hard-
est and succeeded in improving my efforts."

Honda, always a man of few words and direct action, is a bit
more philosophical these days, now that taishoku — retirement, or
"work-going-out-of” in the literal Japanese — has come. In the first
summer (1974) after formally giving up his role as president of the
company, Honda was nevertheless busy with its activities —— making

HONDA: THE .\IAN AND HIS RIACIIINES 198

a grand tour of Honda’s “Sewice—Faetory” agents. The SF, as they
are called in the company, are company authorized, trained, and
often financed repair operations all over the country. They were
among the first modern repair facilities for automobiles in Japan,
and Honda is particularly proud of them.

Honda does not concern himself with day—to-day affairs of the
company's operations or even much larger issues such as pricing
policy. He has shown up at the research institute once or twice a
month.

But he had determined On his retirement that he would devote
himself for a while to traveling around Japan and the world to visit
all the Honda offices. He wanted to express his gratitude to
rank-and—file employees for their contribution to the success of the
company: And that is in keeping with his belief that it has been the
dedicated loyalty of employees more than the contribution of its
executives which has given it such phenomenal success.

The trip has included riding everything from Hondas to heli—
eopters. (Honda has given up his attempts to pilot a helicopter
himself after three serious accidents, and, as he laughingly says,
because others now refuse to ride with him when he is piloting
them.) The trips were completed by the end of 1974 and he says
now he hopes to return to his favorite pastime of “fumbling with
machines.”

He has set up a kind of “salon” in downtown Tokyo where his
old friends drop in and chat with him, where they can pick each
other’s brains on their experiences and life-styles. There’s a report,
too, that he was approached by the ruling Liberal Democratic
party to run for the upper house of the parliament in the mid—1974
elections. In the Japanese tradition, he apologized for not being
able to accept their request—then joked to a friend that it was
the first time in his life that he had to apologize for something bad
he hadn’t really done.

There’s more time for golf, too. Honda had long objected to
what has become the fanatical addiction of Japanese businessmen

'I'AlSIIOKU 199

to golf in the postwar period. One objection: A caddy—often a
woman in Japan —— carried your clubs, a kind of symbol of menial
service which went against the grain. He also has always refused to
submit to any handicapping. Why? Because to do so sets the
bounds of what one might achieve rather than simply playing
against the total unknown possibility of skill. A young advertising
executive, asked what Honda and he talk about 011 the golf course,
says: “Mostly girls. Mr. Honda is an expert on girls." He is also
painting more, in oil, a traditional occupation for Japanese men
who have begun to retire from the trials and tribulations of the
world of commerce or government.

But there’s little doubt that Honda (and Fujisawa, too, for that
matter) will continue to play an important role in the affairs of the
company. Honda remains one of the principal stockholders in a
company that in 1973 had a total income of close to $1.7 billion.
He remains in the traditional Japanese role of senior adviser. And
although he has for some time been withdrawing from the day-to—
day affairs of the company, he still has strong opinions about where
and what it should do.

“I cannot overstress the importance of continuing to cope with
the pollution problem. If something manufactured by a company
is going to do harm to people, such a company will go bankrupt
eventually even if it may be able to make some money immediately.
V’Vhat insures the future of a company is not temporary profits, but
the philosophy of manufacturing things in the interest of the
people,” he said in a farewell statement to employees.

On the future of motorbikes and automobiles: mThey are no
longer a mere means of transportation but they are now being
sought as a means of enjoying life. So it does not matter if demand
for them as a means of transportation — motorcycles, particularly
—declines, there still will be a demand for them as a means of
riding for pleasure, so we’ll continue to make the kind of vehicles
in demand.”

But again and again in talking about the company, its future, and

IOZU> 2—040” DOfiVOEH—OZ

:02?» 2.040” Oat—szEECZ

 

 

I is t

Mr. and Airs. Honda being entertained on their 1974 trip to Honda ofiees

around the world.

the future of Iapanese industry, Honda says it will be the spirit
behind the business that will count. “Honda's products are known
all over the world not simply because they are good in quality but
also because of the philosophy behind the products. It means that
the philosophy behind the Honda products is being accepted by
the people, an altruistic philosophy. In mamifacturing a thing, the
technology comes later. Before technology there should be a way
of thinking. Business without a philosophy may succeed at first but
eventually it will encounter opposition. Coexistence, mutual con/
tribution through enterprise. is the spirit needed. An enterprise
without moral principle, without a philosophy, a willingness to
serve the people, such an enterprise cannot succeed. Why do you
think that the CVCC engine was produced by a small company
such as Honda? It is simply because of our fundamental philos
ophy, our policy of creating something which will scrye the inter

NOILVHOJHUI) )IOJDW VLWOH

HONDA: THE 1\IAN AND HIS A'IACIIINES 202

ests of people. Our philosophy, such a philosophy, gives pride and
passion to our young research engineers. We sometimes say, jok-
ingly, that it is nice that there are companies which are interested
only in seeking profits because thanks to such companies, a small
company like Honda will have a chance to do good work.”

For years the business world in Japan has talked of a “Nexto
Honda" — meaning leadership that would take the place of Honda
and Fujisawa and meet the new challenges which will face the
company. The physical transformation to a new leadership has now
been made. The challenge has come at the same time that Japan,
too, with the energy crisis and the general flux in the world eco-
nomic policy, must meet a series of new problems and complica—
tions. In the years immediately ahead, Japan will have great need
for the authentic and nondoctrinaire thinking that Honda has so
typified in his lifetime. Yet, unconventional as he is, Honda is a
traditional Japanese type. And one can only wonder how and from
where in the evolving new Japan his kindof genius will arise again.

Appendix I

 

 

Chronology of the Life of

1906 November 17

1922

1928

1934

Soiohiro Honda

Born in I\\atag11n (present Tennu City)
Shizuoka prefecture the first son of Cihei
1nd Mika Honda

Graduated from the Futamata Senior Ele—
mentary School.

Employed by Arto Shokai, an automobile re»
pair Shop in Tokyo.

Established a branch shop of Arto Shokai in
Hamamatsu with his own Capital

Cot first patent for automobile wheel spokes
of cast metal.

Established Tokai Seiki Company, Ltd., and
started experimental manufacturing of piston
rings.

1935

1936

1937

1946

1948

1949

1951
1952

1954

1958
1959

1960

1961

HONDA: THE MAN AND HIS 3IACHINES 204

Entered Mechanical Engineering Depart-
ment, Hamamatsu Technical High School.

Married Sachi Isobe.

Participated in auto races with a car he de-
signed and built himself; crashed and was in—
jured badly.

Succeeded in manufacturing piston rings; be—
gan manufacturing for wartime vehicles.

Established Honda Gijutsu Kenkyu Sho
(Honda Technical Research Laboratory) to
equip bicycles with small army surplus engines.

Established Honda Motor Company, Ltd.,
and assumed the presidency with capital US.
$3,300, and started production of motor-
cycles.

Completed motorcycle model Dream D (two—
stroke).

Takeo Fuiisawa (former vice-president) joined
the company as managing director.

Completed the medel Dream E (four-stroke).

Awarded Ranju-Hosho (Blue Ribbon Medal)
for inventions and improvements of small
engines, and started production of engines
for farm implements.

Declared Honda would contest the Isle of
Man Tourist Trophy in England after visit-
ing European countries to see the technologi-
cal developments in the motorcycle industry.

Put on market a new 50cc model C-lOO (step-
through model).

First participation in the TT. race and won
the Sixth Prize (125cc); established American
Honda Motor Company, Inc.

The Suzuka Factory started production
(world’s largest motorcycle plant).

Won victories in all classes contested in the
T.T. races (125cc, 2 50cc, 350cc); established
European Honda Motorcycle Trading GmbH

APPENDIX 1: CIIRONOLOCY OF THE LIFE OF SOICHIRO HONDA 205

1963
196;

1966

1967

1968
1969
1970

1971
1972

1973

September

March
Ian uary

May

in Hamburg, \Vest Germany, and assumed
its presidency.
Sports car 8500 was introduced.

[7-1 racer (1,;oocc) scored Honda’s first auto
Victory in the Mexican Grand Prix.

\Von all five 5010 World Championships in
motorcycle Grand Prix races (50cc, 125cc,
250cc, 350cc classes); first time one company
won them all.

Introduced lightweight passenger Car model
N360.

Honda Motorcycle production total reached
10 million units.

Introduced passenger car Honda 1300.
Established antipollution engine project.
Introduced passenger car Honda Life (36occ).

Introduced passenger car Honda Civic
(1200ce) with CV CC engine.

Retired as Honda president to become su—
preme adviser.”

Appendix II

 

 

American Honda Products*

Motorcycles: QA-So
MR— so
2— so
XR—7s
CT-7o
ATC--7o
CT-go
ST—go
ATC—go
XL—7o
XL- 1 oo
TL—l 2 5
XL—l 2 5

*As of 2/21/75.

Mva75
XL-175
CB—zoo
XL—z 50
MT-zgo
'I'L—z 50
CR—z 50M
XL—350
CB—36o
CL—36o
CB—400F
CB—gooT
CB-s 50

APPENDIX 11: AMERICAN HONDA PRODUCTS :07
MT-l 25 CB-7go
CR—i 25M CL-IOOO
CB-1 25$

Automobiles: Civic Sedan (standard)

Civic Sedan (automatic)
Civic Hatchback (standard)
Civic Hatchback (automatic)
Civic (five-speed)
Power Products: EM -400 generator

E—ooo generator
13-1300 generator
E-zgoo generator
ISM—3000 generator
B—7; outboard motor
(3—659 all purpose engine
G-65RD all purpose engine
(1-429 all purpose engine
G-42RD all purpose engine
G—28D all purpose engine
GS-6; all purpose engine
F-zS Rototiller

HONDALINE PRODUCTS:

Helmets: 1/2 shell, full face
(hare-children, stag—adults
both 1/2 shell, hawk-full-
face)

Motocross Equipment: mesh jerseys
nylon jerseys
pit crew jerseys
leathcr pants
mx boots (both buckle and
laced boots)
mxz gloves
Riding Equipment: knit riding jerseys
Hang Ten t—sliirts
riding sweaters
nylon riding jackets (with or
without sleeve stripes)
with or without liner
touring suits (nylon)
enduro suits (nylon)

HONDA: THE l\IAN AND HIS l\IACHINES 208

gloves (street and gauntlet
styles)
touring boots (leather)
Accessories: leak detector kit (engine use)
dial indicator gauge
(engine use)
belt buckle

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