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Why Honda is the most innovative car company on Earth

Kai Ryssdal Aug 1, 2014
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Why Honda is the most innovative car company on Earth

Kai Ryssdal Aug 1, 2014
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At a groundbreaking for a Honda plant in Alabama, dignitaries were asked to start engines symbolizing the start of construction.

But nothing started.

“The Honda machine just put-putted,” says Jeffrey Rothfeder. “Things got tense, people looked around. The audience was thinking, ‘What kind of company are we bringing into our community?’ The CEO looked at the machine, rolled up his sleeves and started it up on his own.”

That scene starts off Rothfeder’s book “Driving Honda: Inside the World’s Most Innovative Car Company,” which outlines Honda’s core values, innovative culture and what makes the company tick.

As the book illustrates, things are done differently at Honda: Everything is built and assembled locally, CEOs are always engineers and the company is not concerned with being No. 1.

“[The founder] always pushed the company to be more than what it was, and so he just pushed them past motorcycles, past lawn mowers into making cars. Now they’re making robots, they’re making a jet that just flew for the first time,” says Rothfeder. “They keep testing themselves and keep pushing themselves further.”

In all these years, the company has never posted a loss.

“They want to succeed; they want to make a 5-6 percent profit margin, which is really high for the auto industry and they do that almost everywhere they go by simply providing the kind of cars people want at the right price point. If it means they’re No. 3 or No. 4, what’s the difference?”

Rothfeder says the company’s founder Soichiro Honda may not entirely recognize what Honda has become. “He’d recognize his company in terms of the culture and the way they innovate and the way they treat their workers; what he wouldn’t recognize is how complex machines had become.”

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