Honda's Fukui Steers Car Maker Off Staid Track
12-07-2004, 08:02 PM
#1
Senior Moderator
Thread Starter
Join Date: May 2003
Location: Better Neighborhood, Arizona
Posts: 45,641
Received 2,329 Likes
on
1,309 Posts
Honda's Fukui Steers Car Maker Off Staid Track
http://online.wsj.com/article_email/...bqyEm5,00.html
By NORIHIKO SHIROUZU and JATHON SAPSFORD
Staff Reporters of THE WALL STREET JOURNAL
December 7, 2004; Page B1
Last August, Honda Motor Co. Chief Executive Officer Takeo Fukui invited a group of investors, analysts and journalists to the car maker's test track north of Tokyo for a fast product demonstration. Very fast.
Mr. Fukui zoomed around the track in a Honda-powered Formula One racing car at speeds up to 180 miles per hour. He then hopped aboard a roaring racing bike for another couple of laps. After that, he switched to an eerily quiet scooter powered by fuel cells.
"Make driving fun," the 60-year-old Mr. Fukui said after his performance. "That's what Honda needs to do."
That's not all Japan's third-largest car maker needs to accomplish, says Mr. Fukui, who is shaking up Honda since taking over as CEO last year. He says Honda has become too staid, too risk averse, and too much like Toyota Motor Corp., without its competitor's scale or massive bank account. "I want Honda to give off the smell of danger -- danger that says you simply don't know what we might do next," he says.
Honda hasn't pulled off such surprises in recent years, but Toyota has, he says, pointing to the introduction of the Toyota Prius, an efficient, gasoline-electric hybrid sedan launched in Japan in 1997. The second generation Prius is now a hit in the U.S. and is burnishing Toyota's image as an environmentally progressive auto maker.
In the early 1990s, Honda tried a hybrid system but gave up. It wasn't until late 1999 that it came out with a hybrid car. "We should own green technology," Mr. Fukui says. The company's hard-driving founder, Soichiro Honda, pushed advancements such as the fuel-efficient CVCC engines of the mid-1970s and electronically controlled VTEC engines in the 1990s that boosted performance and conserved fuel while reducing emissions.
In an effort to regain a leadership role in environmentally friendly autos, Honda recently opened a research and development center in Japan to produce technology over the next 10 years that will allow it to double the efficiency of a conventional gasoline-fueled vehicle without relying on expensive batteries or hybrid gas-electric systems. Among Mr. Fukui's goals is a gas-powered Accord that gets 50 miles per gallon -- double the 25 miles it gets today.
Honda is pouring money into efforts to advance fuel cell technology, such as solar panels that produce hydrogen from water. The goal is to create a solar-powered hydrogen fueling station small enough to be installed in a customer's home. That way, owners of fuel cell cars could fill up with hydrogen produced without natural gas or other fossil fuel energy.
Mr. Fukui's boldest dream is his effort to build aircraft powered by Honda. At a business jet convention in Las Vegas in mid-October, Mr. Fukui disclosed that a joint venture jet-engine company between Honda and General Electric Co. was negotiating with several business-aircraft manufacturers.
The Honda jet engine HF118 is the product of an 18-year effort to create, in Mr. Fukui's words, a "Honda Civic of the sky." Last year, the company successfully tested a Honda-designed aircraft equipped with Honda jet engines designed to be 30% more fuel efficient than conventional small business jets. "Toyota couldn't match that even if they threw money at it," he says.
He says Honda should spend more on research and development, even though it already spends 5.5% of overall revenue on R&D compared to 3.9% for Toyota.
Mr. Fukui cites as his model the German luxury car maker BMW AG. "It's a small company that sells maybe about one million cars, and yet they have a strong presence in the marketplace no one else can really match," he says.
But Honda isn't like BMW in important ways. It relies heavily on sales of just a few models in highly competitive, mass market segments, including the Honda Civic small car and the mid-sized Accord. The most recent Civic has failed to sell according to the company's expectations, denting Honda's profit and fueling Mr. Fukui's resolve to shake up the company. Sales of the redesigned Accord, launched in the fall of 2002, are also showing signs of a slowdown.
Mr. Fukui blames several factors for the Civic's weak performance: not enough new technology, a plain exterior, and cost cutting that eliminated one of the car's features -- the so-called double wishbone suspension on the front -- in favor of a cheaper alternative. That move eroded the Civic's sporty image among younger buyers. The redesigned Civic is due next fall with a new chassis and more style, executives say. "This time we have a youth focus," says Dan Bonawitz, a senior Honda marketing executive in the U.S.
Despite Mr. Fukui's fear that Honda may be losing its youthful zeal, industry experts says the auto maker has room for growth. "Honda is a company that builds cars just so that they can sell their engines," says Michael Robinet of consulting firm CSM Worldwide in Farmington Hills, Mich. "They make motorcycles, mopeds, lawn mowers, aircraft engines, boat engines. You name it. If Honda sets a target, there is almost no doubt in my mind they are going to be able to do it."
Mr. Fukui's call for Honda to become less risk averse runs counter to the style of Koichi Amemiya, the powerful 64-year-old executive vice president who has long controlled the company's North American operations -- the source of more than two-thirds of Honda's global profit.
Now, Mr. Fukui is moving to make changes in Honda's North American leadership. On Nov. 30, Honda announced that Tom Elliott, Mr. Amemiya's long-time top lieutenant in the U.S., would retire next year and be replaced by John Mendel, formerly chief operating officer of Mazda Motor Corp.'s North American unit.
Messrs. Amemiya and Elliott "have become God-like figures that are rather too intimidating for young product planners and engineers to challenge," Mr. Fukui says. "If those two executives weren't there, young engineers might pick up fights and quarrel with management, like I used to do when I was a young engineer, and make an impact on product."
Mr. Amemiya says he wouldn't describe himself or Mr. Elliott as "God-like," but they are knowledgeable about the market. "We have been doing this for a long time, almost 20 years," he says. "Tom and I do have a better command of what the American consumer wants."
It isn't clear how Messrs. Fukui and Amemiya will coexist. Mr. Amemiya in April relinquished his position as chief executive of Honda's American sales unit in Torrance, Calif., to a younger executive, although he retained his title as president of Honda North America, Honda's legal, auditing and public relations unit.
Mr. Amemiya could agree to return home and retire next year. Some company insiders say he is angling to be named chairman of Honda, a position unfilled since Yoshihide Munekuni retired in June. In the meantime, he continues to wield significant influence and insists he and Mr. Fukui "see eye-to-eye on the future of Honda."
By NORIHIKO SHIROUZU and JATHON SAPSFORD
Staff Reporters of THE WALL STREET JOURNAL
December 7, 2004; Page B1
Last August, Honda Motor Co. Chief Executive Officer Takeo Fukui invited a group of investors, analysts and journalists to the car maker's test track north of Tokyo for a fast product demonstration. Very fast.
Mr. Fukui zoomed around the track in a Honda-powered Formula One racing car at speeds up to 180 miles per hour. He then hopped aboard a roaring racing bike for another couple of laps. After that, he switched to an eerily quiet scooter powered by fuel cells.
"Make driving fun," the 60-year-old Mr. Fukui said after his performance. "That's what Honda needs to do."
That's not all Japan's third-largest car maker needs to accomplish, says Mr. Fukui, who is shaking up Honda since taking over as CEO last year. He says Honda has become too staid, too risk averse, and too much like Toyota Motor Corp., without its competitor's scale or massive bank account. "I want Honda to give off the smell of danger -- danger that says you simply don't know what we might do next," he says.
Honda hasn't pulled off such surprises in recent years, but Toyota has, he says, pointing to the introduction of the Toyota Prius, an efficient, gasoline-electric hybrid sedan launched in Japan in 1997. The second generation Prius is now a hit in the U.S. and is burnishing Toyota's image as an environmentally progressive auto maker.
In the early 1990s, Honda tried a hybrid system but gave up. It wasn't until late 1999 that it came out with a hybrid car. "We should own green technology," Mr. Fukui says. The company's hard-driving founder, Soichiro Honda, pushed advancements such as the fuel-efficient CVCC engines of the mid-1970s and electronically controlled VTEC engines in the 1990s that boosted performance and conserved fuel while reducing emissions.
In an effort to regain a leadership role in environmentally friendly autos, Honda recently opened a research and development center in Japan to produce technology over the next 10 years that will allow it to double the efficiency of a conventional gasoline-fueled vehicle without relying on expensive batteries or hybrid gas-electric systems. Among Mr. Fukui's goals is a gas-powered Accord that gets 50 miles per gallon -- double the 25 miles it gets today.
Honda is pouring money into efforts to advance fuel cell technology, such as solar panels that produce hydrogen from water. The goal is to create a solar-powered hydrogen fueling station small enough to be installed in a customer's home. That way, owners of fuel cell cars could fill up with hydrogen produced without natural gas or other fossil fuel energy.
Mr. Fukui's boldest dream is his effort to build aircraft powered by Honda. At a business jet convention in Las Vegas in mid-October, Mr. Fukui disclosed that a joint venture jet-engine company between Honda and General Electric Co. was negotiating with several business-aircraft manufacturers.
The Honda jet engine HF118 is the product of an 18-year effort to create, in Mr. Fukui's words, a "Honda Civic of the sky." Last year, the company successfully tested a Honda-designed aircraft equipped with Honda jet engines designed to be 30% more fuel efficient than conventional small business jets. "Toyota couldn't match that even if they threw money at it," he says.
He says Honda should spend more on research and development, even though it already spends 5.5% of overall revenue on R&D compared to 3.9% for Toyota.
Mr. Fukui cites as his model the German luxury car maker BMW AG. "It's a small company that sells maybe about one million cars, and yet they have a strong presence in the marketplace no one else can really match," he says.
But Honda isn't like BMW in important ways. It relies heavily on sales of just a few models in highly competitive, mass market segments, including the Honda Civic small car and the mid-sized Accord. The most recent Civic has failed to sell according to the company's expectations, denting Honda's profit and fueling Mr. Fukui's resolve to shake up the company. Sales of the redesigned Accord, launched in the fall of 2002, are also showing signs of a slowdown.
Mr. Fukui blames several factors for the Civic's weak performance: not enough new technology, a plain exterior, and cost cutting that eliminated one of the car's features -- the so-called double wishbone suspension on the front -- in favor of a cheaper alternative. That move eroded the Civic's sporty image among younger buyers. The redesigned Civic is due next fall with a new chassis and more style, executives say. "This time we have a youth focus," says Dan Bonawitz, a senior Honda marketing executive in the U.S.
Despite Mr. Fukui's fear that Honda may be losing its youthful zeal, industry experts says the auto maker has room for growth. "Honda is a company that builds cars just so that they can sell their engines," says Michael Robinet of consulting firm CSM Worldwide in Farmington Hills, Mich. "They make motorcycles, mopeds, lawn mowers, aircraft engines, boat engines. You name it. If Honda sets a target, there is almost no doubt in my mind they are going to be able to do it."
Mr. Fukui's call for Honda to become less risk averse runs counter to the style of Koichi Amemiya, the powerful 64-year-old executive vice president who has long controlled the company's North American operations -- the source of more than two-thirds of Honda's global profit.
Now, Mr. Fukui is moving to make changes in Honda's North American leadership. On Nov. 30, Honda announced that Tom Elliott, Mr. Amemiya's long-time top lieutenant in the U.S., would retire next year and be replaced by John Mendel, formerly chief operating officer of Mazda Motor Corp.'s North American unit.
Messrs. Amemiya and Elliott "have become God-like figures that are rather too intimidating for young product planners and engineers to challenge," Mr. Fukui says. "If those two executives weren't there, young engineers might pick up fights and quarrel with management, like I used to do when I was a young engineer, and make an impact on product."
Mr. Amemiya says he wouldn't describe himself or Mr. Elliott as "God-like," but they are knowledgeable about the market. "We have been doing this for a long time, almost 20 years," he says. "Tom and I do have a better command of what the American consumer wants."
It isn't clear how Messrs. Fukui and Amemiya will coexist. Mr. Amemiya in April relinquished his position as chief executive of Honda's American sales unit in Torrance, Calif., to a younger executive, although he retained his title as president of Honda North America, Honda's legal, auditing and public relations unit.
Mr. Amemiya could agree to return home and retire next year. Some company insiders say he is angling to be named chairman of Honda, a position unfilled since Yoshihide Munekuni retired in June. In the meantime, he continues to wield significant influence and insists he and Mr. Fukui "see eye-to-eye on the future of Honda."
12-07-2004, 08:55 PM
#2
Originally Posted by Ken1997TL
Mr. Fukui blames several factors for the Civic's weak performance: not enough new technology, a plain exterior, and cost cutting that eliminated one of the car's features -- the so-called double wishbone suspension on the front -- in favor of a cheaper alternative. That move eroded the Civic's sporty image among younger buyers. The redesigned Civic is due next fall with a new chassis and more style, executives say. "This time we have a youth focus," says Dan Bonawitz, a senior Honda marketing executive in the U.S.
12-08-2004, 10:11 AM
#3
Changin bulbs since '73
iTrader: (1)
Join Date: Dec 2001
Location: Chi-town burbs
Age: 51
Posts: 8,111
Likes: 0
Received 12 Likes
on
4 Posts
this is a great article. This guy has vision!! Hopefully he can navigate honda in the right direction. Acura needs some spice!! for that reason honda does, too. I remember when acura was saying there is no market for a coupe bu the G35 shows (and the 330ci) for that reason....build it and they will come. If you half ass it you can't expect things to be peachy and you will get away with it. There are waaay too many choices, you have to build stuff that will appeal and have staying power. If you make a great car people WILL buy it!!
12-08-2004, 10:44 AM
#4
Homeless
Join Date: Feb 2003
Location: Northern DEL-A-Where?
Age: 51
Posts: 9,210
Likes: 0
Received 0 Likes
on
0 Posts
Mr. Amemiya says he wouldn't describe himself or Mr. Elliott as "God-like," but they are knowledgeable about the market. "We have been doing this for a long time, almost 20 years," he says. "Tom and I do have a better command of what the American consumer wants."
12-09-2004, 04:21 PM
#6
Senior Moderator
Thread Starter
Join Date: May 2003
Location: Better Neighborhood, Arizona
Posts: 45,641
Received 2,329 Likes
on
1,309 Posts
Originally Posted by Python2121
this article is pretty weak
speak softly and carry a large stick, which is not what they are doing
speak softly and carry a large stick, which is not what they are doing
12-09-2004, 07:07 PM
#7
Originally Posted by Ken1997TL
Keep in mind that he hasn't been the CEO for very long. The first of his ideas are probably only now being put to work.
Trending Topics
Thread
Thread Starter
Forum
Replies
Last Post
Mugen TSX
Eastern Canada
0
09-01-2015 11:11 PM
Mugen TSX
Eastern Canada
0
09-01-2015 11:05 PM
