Why Honda is in more trouble than you think...

[A Horse With No Name]

Interesting article in car and driver...

http://blog.caranddriver.com/why-honda-is-in-even-more-trouble-than-you-think-deep-thoughts/

To many observers, Honda appears to be going through the corporate equivalent of a mid-life crisis. Supply problems from the effects of the Japanese earthquake and tsunami and flooding in Thailand, along with less-than-complimentary write-ups on the new Civic by Car and Driver, Consumer Reports, and others, are bearing the brunt of the blame for the slump in calendar-year 2011 sales. Further issues: Acura’s inability to attain tier-one luxury-car consideration or status among consumers, Honda’s attempt to build a pickup truck, and the firm’s precipitous sales decline in its home market of Japan.

But even though it will raise the ire of Honda executives and brand loyalists alike, the company’s problems aren’t simply the aftereffects of the world’s climate gone mad or a substandard take on a bestselling vehicle.

It’s worse than that.

There is good reason to consider Honda to be in a similar place as General Motors was in, say, January of 1981. We need to preface this by saying the business and product environment of 31 years ago couldn’t be more different from the climate in which the Japanese company seems to be struggling today, but the parallels with what is happening to Honda now are all too familiar to students of The General’s decline.

In May of 2009, Jim Collins, an author who contributes to the Harvard Business Review and other business journals, published How the Mighty Fall. In the book, Collins describes the five stages of demise in the world of modern business. They are:

Stage 1: Hubris Born of Success

Stage 2: Undisciplined Pursuit of More

Stage 3: Denial of Risk and Peril

Stage 4: Grasping for Salvation

Stage 5: Capitulation to Irrelevance or Death

[daves87rs]

Have a hard time seeing this...

[riviera74]

Have a hard time seeing this...

Nobody saw GM heading to the troubles they had in 1992, much less BK in 2009. Indeed, if you told anybody in 1981 that GM would have those events happen in the next 30 years, you would have been laughed out of the room.

[A Horse With No Name]

think people 9inside Honda are more worried than you might think.

[daves87rs]

Have a hard time seeing this...

Nobody saw GM heading to the troubles they had in 1992, much less BK in 2009. Indeed, if you told anybody in 1981 that GM would have those events happen in the next 30 years, you would have been laughed out of the room.

I did- you could really see the crap product through the 80s. My neighbors were swearing off GM products left and right. Mind you mind you my dad worked for GM, and our old blue full size Chevy van almost made him swear off GM products himself......

I highly doubt they would have been laughed out of the room...at least with people that knew better. Both Honda and Toyota had dealerships planted in GM's home state and business was picking up...

While Honda may have it a little rough, their products are still holding up well....a HUGE difference from GM at that time.

[Drew Dowdell]

Have a hard time seeing this...

Nobody saw GM heading to the troubles they had in 1992, much less BK in 2009. Indeed, if you told anybody in 1981 that GM would have those events happen in the next 30 years, you would have been laughed out of the room.

By 1992, GM already had, in no particular order:

The original Cavalier

The X-bodies

The 4100

The 350 Diesel

The Cimmarron

The less than successful initial launch of the W-body.

The disastrous downsizing of the E-bodies.

A 5 year lag on the Mini-van

Chrysler just released the LH cars while GM was just filling out the rest of the W-body line.

The Camry that made the Camry the Camry was released in 1991 and blew away what GM was putting out in comparison.

If you couldn't see it coming in 1992... well... then you need better glasses.

[daves87rs]

Have a hard time seeing this...

Nobody saw GM heading to the troubles they had in 1992, much less BK in 2009. Indeed, if you told anybody in 1981 that GM would have those events happen in the next 30 years, you would have been laughed out of the room.

By 1992, GM already had, in no particular order:

The original Cavalier

The X-bodies

The 4100

The 350 Diesel

The Cimmarron

The less than successful initial launch of the W-body.

The disastrous downsizing of the E-bodies.

A 5 year lag on the Mini-van

Chrysler just released the LH cars while GM was just filling out the rest of the W-body line.

The Camry that made the Camry the Camry was released in 1991 and blew away what GM was putting out in comparison.

If you couldn't see it coming in 1992... well... then you need better glasses.

Pretty much this....

[David]

This is so true about Honda, They have issues that might not be possible to fix until they clean house on management.

This was the same problem at GM. A horse with blinders on will not see the danger till it is over.

Edited June 11, 2012 by dfelt