Flexible Manufacturing is a Competitive Weapon for Honda

In the auto industry, the race belongs to the swift, and also the flexible.

Honda is driving home this point with several chess moves among its growing number of North American factories. Honda is ramping up production of cars that are in demand, while turning down the volume on trucks, which aren't.

The Detroit 3 are doing the same thing, but Honda is different in that its plants are flexible enough to build either one, or both. Switching causes less trauma and expense than the domestic U.S. automakers.

At an industry conference in New York last month sponsored by Bel Air Partners, industry gadfly Jerry York gave Honda rare praise for flexible manufacturing, which York called "tomorrow's war" in the auto industry.

"They (Honda) have total model flexibility. They can go from building 100 percent Accords on Friday, to 100 percent Civics on Monday. Their only limitation is the response time for ordering vehicles," York said. York is the CEO of Harwinton Capital. He is also an advisor to billionaire investor Kirk Kerkorian, and a former CFO of Chrysler.

Honda announced this week that its plant in Lincoln, Ala., will start building V-6 versions of the Accord sedan and the Ridgeline pickup in 2009. The plant already builds the Odyssey minivan, the Pilot SUV and V-6 engines. The Accord will be its first car model since the plant opened in November 2001, but the factory is flexible enough to accommodate it, the company said.

Meanwhile, Honda will increase production of four-cylinder Accords in Marysville, Ohio, and four-cylinder engines in Anna, Ohio. Four-cylinder engines are in greater demand, as U.S. customers want better gas mileage.

Earlier this month, Honda started building the four-cylinder Honda Civic sedan at a new factory in Greensburg, Ind. That plant eventually will be able to build 200,000 vehicles a year.

Before the Indiana plant opened, Honda sold about 300,000 Civics in the United States in 2007, almost all of which were built in North America, not counting about 32,000 imported Honda Civic hybrids, according to AutoData. In 2008, Honda Civic sales were 258,188 through September, plus 32,575 hybrids. That was an increase for the conventional model of 11.7 percent from the year-ago period.

Honda probably doesn't need all 200,000 Civics a year from Indiana, on top of the 300,000 it can already build in North America. But having the additional plant allows Honda to phase out Civic production at other plants, and/or to phase in new models to be named later, said Honda spokesman Ed Miller.

The point is, unlike most Detroit 3 plants, the Honda factories are built from the ground up, to build more than one product.