Soichiro Honda

Japanese businessman

• Born: November 17, 1906
• Birthplace: Iwata-gun, Japan
• Died: August 5, 1991
• Place of death: Tokyo, Japan

From the humblest of beginnings as a mechanic and with only the scantiest of formal education, Honda became an inventor, innovator, and manufacturer in one of the most competitive industries in Japan. The motorcycles and automobiles produced by the company that bears his name are sold throughout the entire world and are known for their reliability.

Early Life

Soichiro Honda (soh-ee-chee-roh hawn-dah) was born into the family of a blacksmith. Bicycles were only then gaining popularity in Japan, and Soichiro’s father, Gihei, expanded the family business by purchasing used bicycles in Tokyo and then repairing them for resale. From his earliest years, Soichiro helped out with his father’s business and gradually became adept at mechanics. At the age of fifteen, he was sent as an apprentice to an automobile repair shop in Tokyo. It was not long before Soichiro, still a teenager, had developed his skills to the point at which he was able to build his own racing car; it was the beginning of a lifelong fascination with automobile and motorcycle racing. He not only built but also drove racing cars and in fact set a Japanese speed record in 1936 that remained unbroken for many years.

In the meantime, from the age of twenty-one, Honda was in the auto repair business for himself in the city of Hamamatsu. In the decade of the 1930’s, Honda’s career led him in several directions, from creating a successful car repair shop to experimenting with inventions (including cast metal spokes for a wheel). At the age of thirty-one, he returned to part-time study at the Hamamatsu High School of Technology, though he never received a diploma, because he failed to take the examinations. Much later in his career, after his automobiles had gained international recognition, he would be awarded numerous honorary doctorates from universities in Japan and the United States.

During the war years, 1937-1945, Honda’s company, Tokai Seiki, prospered as military demands for the company’s products, including piston rings and metal aircraft propellers, accelerated. In the final year of the war, after the factory took direct hits in a bombing raid and was further damaged in an earthquake, Honda sold what was left of Tokai Seiki’s assets to Toyota.

Life’s Work

In October, 1946, after the end of the war, Honda established the Honda Technical Research Institute, the forerunner of the Honda Motor Company, in the city of Hamamatsu. The organization’s main project was refitting small wartime surplus engines to bicycles. This project soon led Honda to manufacture his own bicycle engines. The fuel-efficient models that he built sold well at the time, when the economy was still impoverished and when fuel was especially scarce and expensive.

In 1948, Honda teamed up with Takeo Fujisawa, an investor and businessman, to launch the Honda Motor Company, with Honda as the president. One year later, the twenty-man firm produced its first prototype. This “Dream Type D” motorcycle, boasting a 98 cc, two-stroke engine capable of a maximum output of three horsepower, went into full-scale production at a new factory in Tokyo in 1950. At that time there were about two hundred firms engaged in manufacturing motorcycles in Japan, but the Honda models quickly earned a reputation for sturdiness and reliability that enabled them to prevail over the competition. By 1952, at a time when the company was capitalized at only about forty-one million dollars, sales had reached about nineteen million, and the company controlled 70 percent of the domestic motorcycle market in Japan. By 1967, only four companies manufactured motorcycles in Japan, and Honda accounted for slightly more than half of the total production.

Honda contributed in a personal and direct way to quality control by frequently appearing on the factory floor, wrench in hand, to oversee operations. A bolt that had been tightened by a young factory hand, it was said, could always be tightened by two more turns when the company president took over. At the same time, Honda encouraged employee improvement of work-floor design and methods, a feature of the Honda style that became formalized in 1970 with “idea contests,” which occur every eighteen months and which conclude with daylong picnic celebrations at which workers present their ideas.

A trip abroad in 1951 proved to Honda that Japanese mechanical technology was woefully behind that of the West. He persuaded Mitsubishi Bank to extend a $1.25 million loan of scarce hard currency to his company to buy the most up-to-date machine tools available. He was convinced that the future success of his company depended on making a motorcycle that could compete successfully in the most demanding international races. After several presentable showings in European events in the late 1950’s, Honda’s racing machines won the first five positions in both the 125 cc and 250 cc class at the prestigious Isle of Man contests in 1961. By that date, Hondas had already achieved the distinction of being the largest selling motorcycles in the world. The establishment of the American Honda Motor Company in 1959 and Honda Germany in 1961 accelerated sales in the West. When Honda Motor opened Honda Benelux in Belgium in 1962 to assemble mopeds, it marked the first time that a Japanese manufacturer had directly invested in the establishment of a factory in an advanced Western nation. Twenty-five years later, Honda operated fifty plants in thirty-three countries around the world.

Honda delayed entry into automobile production in part because the government of Japan discouraged smaller companies from challenging the industry’s giants, Nissan and Toyota. Smaller firms such as Honda Motor were supposed to remain content with supporting roles. Honda, however, took an unusually aggressive posture in his relationship with government authorities, and by the early 1960’s his company could no longer be held back. In 1962, a lightweight truck was introduced, and in the following year a sports car made its appearance. Honda’s first lightweight passenger car was marketed in 1967. The big breakthrough, however, especially in overseas markets, came in 1973, when the Civic model was launched. Intended to compete in North America with Germany’s Volkswagen, this popular model possessed a compound vortex controlled combustion engine system, which gained a quick marketing advantage over the competition by being the first to meet the 1975 emission standards set forth by the United States Clean Air Act.

This stunning technical achievement, all the more noteworthy because it came at a time when the “Big Three” automakers of Detroit were pleading for a postponement of the implementation of the standards, was directly attributable to the emphasis placed on research and development by both Honda and his partner Fujisawa. This emphasis was formalized in the creation in 1961 of Honda R and D Company, with Honda as president. To ensure that independent-minded researchers be kept free from interference by the main company’s bureaucracy, Honda R and D was given an entirely independent and autonomous status the first such instance in the Japanese auto industry. Funding for the research operations comes from a guaranteed annual flow of 2.5 percent of all parent-company sales.

Another watershed event in the Honda Motor Company’s history, though it happened after Honda had retired from the presidency, was the establishment of a factory in 1978 to produce motorcycles in the United States. This move was followed four years later, in 1982, by the opening of an automobile assembly line in Marysville, Ohio. Despite many studies that warned that such a move, using American labor, would not be profitable, the venture proved to be a shrewd investment for Honda and a boon for the Ohio economy. Business analysts give the Ohio operation special credit for the way in which it managed to involve workers in the affairs of the company, a legacy of the Honda style. By the mid-1980’s, more than one-quarter of the Honda automobiles sold in the United States were being produced in the Marysville facility. Before long, the other two big Japanese auto manufacturers, Toyota and Nissan, followed Honda’s example by building their own plants in the United States.

In October, 1973, both Honda and the company cofounder, Fujisawa, retired. A longtime associate, Kiyoshi Kawashima, hired by Honda as an engineer in 1947, became president of the Honda Motor Company. Honda continued to take a role in company affairs with the title of “supreme adviser.” The early retirement of Honda and Fujisawa (Honda was only sixty-six years old, and Fujisawa was four years younger) was a striking exception to customary Japanese practice in which senior executives are often in their seventies or even eighties before stepping down. Honda explained the decision by saying that it was necessary to allow younger leaders the opportunity to explore new ideas and strategies unhampered by the tendency to defer constantly to the cofounders. Honda’s early retirement was seen by Japanese observers as one more example of his maverick style. Following retirement, Honda devoted much of his energy to two foundations: the International Association of Traffic and Safety Sciences (privately funded by Honda and Fujisawa), which conducts research and holds symposia on traffic safety, and the Honda Foundation (funded primarily by Honda himself), which was established in 1977 and is devoted to finding solutions to environmental problems created by modern technology. In October, 1989, Honda became the first Japanese automobile manufacturer to be named to the American Automotive Hall of Fame.

Significance

The Honda Motor Company is the only Japanese automobile firm that does not have any connection to a prewar auto manufacturer. The success of the company and its dozens of overseas affiliates is not entirely the result of Honda’s efforts. The company’s cofounder, Fujisawa, and Kawashima have made enormously important contributions. Still it is not surprising that the company bears the name of Honda, for his talents, both technical and entrepreneurial, and the bold racing-car-driver spirit that he projected, made indelible impressions on the Honda Motor Company. Perhaps the most important contribution he made was to impart an egalitarian spirit to his workforce in large measure by the example he set. He told a New York Times reporter,

The worst kind of president is the person who eats in fancy restaurants, smoking a fat cigar and thinking well of himself while employees work in a dirty factory with their hands dirty. If you’re like a god, people will respect you, but they won’t come close. So employees should feel that the president has made some mistakes.

Bibliography

Cusumano, Michael A. The Japanese Automobile Industry: Technology and Management at Nissan and Toyota. Cambridge, Mass.: Harvard University Press, 1985. Although primarily about Honda’s competitors, this scholarly study includes much valuable information and important statistical data about the Japanese auto industry in general.

Gibney, Frank. Miracle by Design: The Real Reasons Behind Japan’s Economic Success. New York: Times Books, 1982. Honda and his company are frequently discussed in this book, which is a major interpretive examination of Japan’s “economic miracle” written by an American scholar who was also for ten years the guiding force behind his own company’s swift expansion in Japan.

Kamioka, Kazuyoshi. Japanese Business Pioneers. Union City, Calif.: Heian International, 1988. In addition to general comments on characteristics of business and management styles in Japan, this book includes chapters devoted to eight corporate leaders of Japan, including Honda.

Kodansha Encyclopedia of Japan. New York: Kodansha International, 1983. Contains brief but valuable entries for Honda and for the Honda Motor Company.

Sakiya, Tetsuo. Honda Motors: The Men, the Management, and the Machines. New York: Kodansha International, 1982. This is a major source of information on both Honda and the Honda Motor Company. It manages to be both a very scholarly and a very readable business history. Contains numerous interesting photographs as well as a valuable fifteen-page chronology, which is made more useful by incorporating pictures of motorcycle and automobile models.

Sato, Masaaki. The Honda Myth: The Genius and His Wake. New York: Vertical, 2006. Sato, a prominent Japanese journalist who covers the automobile industry, traces the birth of the Honda Motor Company, including the roles of Soichiro Honda and Takeo Fukisawa in the firm’s development. He describes how a cult of hero worship for these two men eventually undermined the company.