...down it's Marysville, Ohio plant in 2009. Going to transfer all manufacturing of cycles to Japan. I know many readers of this board would prefer a American made product, i.e. a HOG. Honda will no longer be able to claim that it's cycles are made in USA. B-man
A disturbing trend, indeed. This is hardly isolated to motorcycle production. The current business situation gives advantages for moving the plant to the Kumamoto, Japan plant rather than in Ohio for 44,000 large Gold Wing touring and VTX cruiser motorcycles built last year and employs 450 US workers who mostly assemble kits of parts made overseas and shipped to Ohio for assembly.So where are the profits, the investment dollars and research dollars spawned from purchase of US-assembled foreign owned products being spent? After all, Japan is a lot closer to China than the US is. http://www.usatoday.com/money/autos/2008-02-27-honda-motorcycles_N.htmHonda's U.S. market share for large street motorcycles fell in 2007 to 14.2 percent from 15.1 percent a year earlier, according to data released last week by rival Harley-Davidson.Sure, the workers are being re-assigned to the auto plant, but that is due to strong (for now) sales of those products. When China is buying more Hondas, and the US consumers get no further IRS "spend me" checks in the mail and stop buying so many Honda cars, what happens then? True growth would have seen associates hired to fill those jobs with no layoffs at the motorcycle plant.http://www.bloomberg.com/apps/news?pid=20601101&sid=aQ_m9xVmH5_U&refer=japanSOtHonda said motorcycle production at Marysville and at the Hamamatsu plant in Japan will be consolidated at an expanded plant in Kumamoto, Japan.This move allows us to improve the competitiveness and appeal of our products by applying the latest technologies and production systems at one efficient location," said Akio Hamada, president and chief executive of Honda of America.The Japanese plant will have a capacity of 600,000 motorcycles a year. Capacity at Marysville is 75,000.No decision has been made about what to do with the Marysville plant.The Motorcycle Industry Council estimates that 1.11 million motorcycles were sold in the USA in 2007, down from 1.19 million in 2006. Council spokesman Mike Mount noted, however, that motorcycle sales steadily increased for 14 years leading up to 2006, which was the best year for sales in 30 years.Honda says it holds about 25% of U.S. sales of motorcycles, all-terrain vehicles and scooters.
http://boards.fool.com/Message.asp?mid=26435504"Interesting video on Ford's super efficient Brazilian plant. It would be a model for North America, but the UAW finds it unacceptable.I suspect (but don't know) that we'll see more plants built off shore and more plants closed in North America over time, partly due to this...um...lack of common ground."http://info.detnews.com/video/index.cfm?id=1189 You mean like these guys, non-union and built the premier Honda GoldWing in Ohio. But since China is a lot closer to Japan, US sale-spawned profits and investment dollars are finding their way back to Japan. And this is labors fault?http://boards.fool.com/Message.asp?mid=26435558How about a different twist, if only in part?There is an economic & industrial reality that US industry expanded in the 1950's and '60's. This created both the largest collection of wealth building industries & companies of the modern era. It also spawned the greatest spending group, the humongous Baby Boomers. That funded the huge affluent middle class in America, the target of many of those new industries. While pan Europe, Japan, China and Russia struggled with leveled cities, bombed out factories and just rebuilding (often with American contractors, our seed money and US-made equipment) infrastructure to support moderate living and necessities, our standard of living, our universities, our health care all soared. Productivity of the US worker is still world leading, albeit growth has slowed of late. And new economies, energy supported economies in South America, developing nations like Vietnam and India where labor is un-naturally low, now challenge our companies to remain domestic in focus.Even our banking industry will falter when the wealth generation is off-shore.It seems the only title US citizens can still lay claim to is soldier and consumer. Even our countrymen on this board seem to agree on that. So is this the future of this country? - soldiers, investors and WalMart greeters?IS that the future you want for your children? You better have them taking Chinese, Hindu or Russian language then. It's a long commute too. HOGr
Honda may have red-lighted, jumped the gun even, on moving manufacturing back to their home island. Shipping those big bikes back here, their main market for them, will be costly in this day of sky-rocketing oil prices. During the 1990s, cheap energy made outsourcing manufacturing to lower labor content facilities very profitable. When oil was cheap, it was easily justified to send materials halfway around the world for construction, and then send the finished product back to consumers. As oil increases in price, it is hard to justify the transportation of goods to overseas producers. Of course many of the Goldwing parts came in totes and were merely assembled in Ohio, so the only difference is shipping the assembled product where most of the loose parts and subsystem assemblies once logged passage.Most recently the Chinese economy benefit from producing outsourced goods. Products and materials have moved to China to be put together where they are then shipped all around the world. Oil’s recent move to $100 per barrel makes outsourcing no longer as profitable or profitable at all. Since most of Chinese production is for goods that will be sold on foreign soil, their near term manufacturing outlook is not too rosey, at least until our Congress here gives Chinese consumers a $600 tax break!
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