By Dawn Kent-The Birmingham News
LINCOLN - Like puzzle pieces and Lego blocks, the interlocking, interchangeable parts of Honda's global operations offer flexibility, and that trait is currently on display at the Japanese automaker's Alabama assembly plant.
Over the next year, the facility in Lincoln will double the number of vehicle lines it produces, adding the Ridgeline pickup and Accord V-6 sedan to a lineup that now consists of the Odyssey minivan and Pilot sport utility.
It's a major undertaking that is requiring extensive preparation, as employees learn the ins and outs of the new vehicles, practice building test models and train to use equipment that's been plucked from Honda plants elsewhere.
"We will be a very busy place," said Mike Oatridge, vice president at the Lincoln plant.
Busy is a scarcely-used word in the slumping automotive industry these days, as companies around the world are slashing output and, in some cases, shuttering plants, to match sluggish demand for their products.
Honda has not been immune to the crisis. The Lincoln plant has scaled back production, along with Alabama's other two auto assembly plants, Mercedes-Benz in Vance and Hyundai in Montgomery.
But Honda's plan to bring in more vehicles has been a bright spot in the otherwise dreary climate. The moves will free up manufacturing space for the automaker to build more popular vehicles elsewhere, while also keeping up production levels in Lincoln.
Now, Honda builds Odyssey minivans and Pilot sport utilities at the Lincoln plant, and sales of both vehicles have suffered this year. While both the Ridgeline, now built in Canada, and the V-6 Accord, now built in Ohio, will help keep the 4,500 local workers busy, it's the sedan that will really help the plant spread its wings.
Diversified:
First of all, the V-6 Accord keeps the plant from being a facility that only produces light trucks. It's also one of Honda's global products, which means it's designed once, manufactured in multiple facilities and sold as basically the same version around the world.
By contrast, the Odyssey, Pilot and Ridgeline are all local models, meaning that they are primarily designed and built for the North American market.
"We had no global models ... if the entire global truck market was depressed, we had no flexibility outside these walls," Oatridge said. "We were on an island before, and we're not anymore. We have further heightened our ability to react to whatever the market brings us."
Honda studied all of its vehicle lines before settling on moving the Ridgeline and V-6 Accord to Lincoln, Oatridge added. The company is always considering such scenarios, and the process is made easier by Honda's goal of being able to build any product at any plant at any time.
"It's like putting together the pieces of a puzzle, a puzzle that keeps changing," he said.
Honda's auto assembly plants are laid out in a similar fashion, with jigs, dies and other equipment that can be easily moved if the company decides to shift production of a certain vehicle.
Oatridge jokes that it's kind of like Legos, but the flexibility that the setup offers to Honda, particularly in an industry downturn, has serious implications.
Keivan Deravi, an economics professor at Auburn University at Montgomery, said Honda's flexible manufacturing systems help it respond quickly to changing consumer demand.
Fuel savings:
In recent months, high gas prices sent consumers scurrying away from light trucks toward smaller, more fuel-efficient cars. By moving the Ridgeline and V-6 Accord to Lincoln, Honda is setting itself up to build more of the hot-selling Civic sedan in Canada and more of the popular 4-cylinder Accord in Ohio.
"These people are in it for the long run, they're basically maximizing flexibility to maximize profit," Deravi said, adding that other automakers with less flexibility aren't faring as well in the current crisis.
That crisis is the first real storm for Alabama's automaking industry, which supports more than 134,000 jobs. The state's sector came of age during an upswing in the typically-cyclical industry, and business recruiters say they aren't slowing down, despite the pains of the bottom end of the cycle.
Ted vonCannon, president of Birmingham's Metropolitan Development Board, said Honda's plans speak volumes about its confidence in its Alabama work force, and there are other opportunities on the horizon for the auto sector in the metro area.
For example, he said, an MDB representative was a part of an Alabama delegation that traveled to Germany last week to court supplier business tied to a new Volkswagen auto assembly plant planned for Chattanooga. Existing auto suppliers in the Birmingham area are hoping to gain new business from that project, he said.
"When times are hard, there seems to be a tendency to say, `We've got to cut.' But if there's ever any time we need to double up and really go after business and jobs for our citizens, it is right now," he said.
Testing:
Honda's $1.4 billion Lincoln plant is now building test versions of the Ridgeline and is scheduled to start turning out production versions of the pickup in January. Meanwhile, the V-6 Accord's move to Lincoln is expected to be complete by mid-2009.
On a recent day at the plant, preproduction versions of the Ridgeline were moving along the assembly line, and workers gathered around to observe and participate in different processes as part of their training.
At one point, they lifted the in-bed trunk onto the vehicle with a makeshift hoisting tool, since that piece of equipment had not yet arrived from Canada. Some then moved in to drill the trunk into place, while others snapped pictures to document the process for reference.
Some employees also have been traveling to Canada to help build the Ridgeline, and they'll also go to Ohio to learn more about the V-6 Accord. Back in Lincoln, they're using the onsite Alabama Industrial Development Training facility, which Honda officials say has been a valuable tool in adding models to the assembly line.
AIDT Director Ed Castile said the agency has designed a custom training process around Honda's needs and would do the same if other state automakers take on a similar project. There has been speculation that Mercedes will add a model at its assembly plant in Vance.
"We're there to back up and shore up and fix or fill in whatever adjustments need to be made in the skill base," Castile said. "We're there to help them, and if Mercedes were to do something like that, we'd be there, too."
For all of the flexibility offered by Honda's products and plants, Oatridge said the automaker's employees are the key piece of the puzzle.
"If it wasn't for the flexibility of our people, the other two wouldn't matter," he said.
And while the Ridgeline and V-6 Accord are welcome additions to Lincoln's assembly lines, Oatridge also expressed confidence in the products that put the plant on the map. Some families will always need the space and utility provided by the Odyssey and the Pilot, and their sales will rebound, he said.
"You can't put six kids in a Civic."