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No. 2 executive talks about cars, work force, future
By Tracy Turner
Columbus Dispatch
Published on Wednesday, Sep 03, 2008
As Honda of America rolled out its highly anticipated 2009 Acura TL sport sedan, an entry-level luxury vehicle that got a makeover, Richard E. Colliver, the No. 2 executive in North America, helped with the introduction.
His presence demonstrated Honda's view that central Ohio is an important part of the company's future.
Colliver, whose formal title is executive vice president of automobile sales, had these thoughts:
Q: Honda's sales have been strong despite the poor economy. Has the company felt the downturn?
A: We're not immune to what's going on in the industry. We've had to adjust production because of the light truck sales where we've seen declines but not as bad as some of the others in the industry.
Q: How has Honda adapted?
A: We anticipated that we were going to be in a higher-gas-price, lower-fuel-economy market. And our business plan we put together last November stressed that we needed to go back to the basics of the strength of our brand, which was the fuel economy, the cost of ownership and value of our product. Because of the availability of products like the Civic, the Fit
and the Accord, we were perfectly positioned to address the market as the oil prices started ramping up.
Q: Did Honda anticipate how devastating the credit crunch would be to the economy and result in banks tightening access to loans, including auto loans?
A: No, we didn't see it coming to be as bad as it is. But having been in the finance business, and seeing what was being done on real-estate loans and even some auto loans, I knew that the odds of that imploding was coming. When I was in Japan at headquarters in October, all the high-ranking finance people wanted to talk about was the availability of financing and how the subprime market could potentially impact our business.
Q: Ohio has seen a rapid drop in automotive jobs, with Honda being one of the few employers that held steady. What's the outlook for Honda?
A: Our employment base is going to be stable. Because of the Indiana plant, we've had to make some adjustments to (expand) some of our facilities, which has required us to add a few people. Our suppliers have had to add people, so overall, we estimate that's resulted in over a billion-dollar impact to Ohio. Ohio's really the center of the heartbeat of Honda manufacturing in North America.
Q: Are there any new models or expansion plans that could bring more jobs and increase the headcount in central Ohio?
A: We're not announcing any new models or changes right now in Ohio. We've shifted production to increase production on Civics and more fuel-efficient vehicles, but right now, we don't have any plans to bring any additional models.
Q: Honda has plans to introduce a hybrid-only model that will be built in Japan. What are the prospects for Honda eventually building hybrids in the U.S. and how might Ohio figure into that process?
A: You can never say never, but right now, this is a brand new global model that's going to be distributed all over the world, with the planned production around 200,000. We have a saying at Honda that with a new car, there is a mother ship, which basically means where it's designed and developed and originally built. And that mother ship is in Japan for this car.
Q: What is Acura's niche in the luxury market and how do you respond to critics who say the brand doesn't have a clear enough identity?
A: We've had some issues over the past about getting the resources and the right product for the market at the time, but I'll say this: The future for Acura is very clear for us and where we want to take it. We know what the next five- to six-year product plan is. As we redefine what the next generation of these models are going to be, it's going to take us into the top-tier luxury segment.
Q: Honda never got into the larger SUV V-8 engine market. Are you now glad the company made that decision, considering the market declines for those vehicles?
A: We feel like maybe we were smart and lucky. We felt a lot of pressure when the large truck got to more than 50 percent of the market, with a large percentage of those with V-8 engines. But our plan was to stay with our core direction of where we wanted to grow, and building fuel-efficient cars that were reliable. Now they are saying the market is coming back to us.
Q: Any more green cars coming down the line?
A: Our global strategy for the hybrid is to grow that segment significantly. We're anticipating 500,000 units a year. In addition to the new global hybrid that we will introduce next spring, we'll also announce that we're going to bring in a model based on the CR-V.
Q: Any parting thoughts?
A: The people in Ohio should feel comfortable with Honda. We've made major investments here and we're here to stay. We're going to continue to grow our business and we have a huge contingency of research and development here that are involved in developing new products for us. The work ethic of the people in the Midwest was a strong reason why we built plants here. We're bullish on the future of Ohio.
As Honda of America rolled out its highly anticipated 2009 Acura TL sport sedan, an entry-level luxury vehicle that got a makeover, Richard E. Colliver, the No. 2 executive in North America, helped with the introduction.
Get the full article here.
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