Honda will rise again this year, says ex-officer
Printer-Friendly VersionHonda Cars Philippines was hit by a perfect storm last year. There was the tsunami in Japan in March. There was the recall of more than 19,000 City, Jazz and CR-V units over a faulty power-window master switch in September. And then, of course, there was the factory-submerging flood in Thailand.
Curse of all curses, Honda was the only carmaker whose own manufacturing facility in the Ayutthaya province got inundated by floodwater, completely halting its assembly operations and drying up Honda’s supply well for the region (including, obviously, the Philippines). When November rolled around, Honda dealerships in the Philippines started to feel the pressure. They soon had to face the inevitable: the total cessation of supply.
Even the City--the one and only Honda model still assembled in Santa Rosa, Laguna--could not be produced, as parts had to be imported from Thailand. Auto parts makers in Thailand, like Honda, saw their factories going under the water.
HCPI had no choice but to postpone the planned November launch of the face-lifted City and the scheduled December introduction of the ninth-generation Civic. Actually, the new Civic was supposed to be our cover for our January/February 2012 issue. Honda had to cancel our cover story because it wasn’t sure whether the units would come from Thailand (long shot) or Japan (most likely).
And just when things seemingly couldn’t get any worse--at least from the motoring media’s vantage point--HCPI employees, including their long-time PR officer, announced their departure from the company.
We began to ask serious questions, none graver than this: Is Honda Cars Philippines folding up?
Ah, but nothing prepared me for the year-end blow to HCPI’s gut. On the very last day of 2011, I got a text message from Voltaire Gonzales, HCPI’s head of sales and corporate communications. He, too, was leaving the company he had faithfully served for 17 years. “I’m retiring,” he said. “Honda’s recovery is finally set. Now I can rest.” I wasn’t buying it. Like several of my colleagues, I suspected that he was walking away before things got really bad at Honda. I suspected that he was jumping ship before the torrent of misfortunes swallowed HCPI.
The numbers seemed to point at this grim conclusion. In 2011, Honda sold just 11,611 cars, down a whopping 30 percent from its 2010 sales total of 16,604 units. As a result, the carmaker dropped further down to fifth spot as Ford/Mazda overtook it with 12,915 units. If you were a Honda dealer (or customer, for that matter), you’d have to wonder what the hell was going on. Particularly when your sales personnel are just standing around the showroom with nothing to sell and do, essentially becoming sitting ducks for other surging brands to poach.
To my mind, Voltaire’s exit had to hurt the company more than any of the above-mentioned setbacks. Not only because it occurred at an extremely bad time, but more so because he was the one guy trusted by Honda’s dealership network to guide them out of the mess. It seemed as though he, too, had given up on the once-mighty Japanese brand.
And then Voltaire resurfaced and met me in person, explaining in detail why his departure wasn’t an indication of bad things for Honda and why the Honda faithful should be optimistic for 2012.
“Contrary to what many people think, I didn’t resign because things had gotten so bad and that I merely wanted out,” he began. “I simply availed of an early-retirement program that had actually been offered to us in January 2011, way before the tsunami in Japan.”
If he only wanted to quit, Voltaire said, he would have done so much earlier, when it was already apparent that Honda would have to deal with a migraine-inducing supply problem. That was in October. Instead, he buckled down and helped steer HCPI through what was definitely the biggest test in its corporate history.
“I rolled out a P3-million training program for our sales workforce so they’d have something productive to do and so they’d have something to hang on to while waiting for new units to arrive,” shared Voltaire. “We conducted workshops on various subjects, like social media, for instance. We also subsidized part of the sales force's salary. We really looked after our best and brightest salespeople. So they stayed.”
The critical period, Voltaire added, was November to December. He had to allay the fears of his sales team while he himself waited for something concrete to assure them with. And when he finally got that assurance, he promptly relayed it to them.
“Honda is on its way to recovery,” Voltaire happily announced. “In 2012, you will see the arrival of new Honda models, and our supply will begin to normalize.”
Honda started the year with the launch of the face-lifted City two weeks ago. The production of the City in Santa Rosa is expected to resume in February. HCPI has made arrangements to import parts from China and India in the meantime.
Next up is the all-new Civic, which, for now, will be imported directly from Japan. Civic units from Japan have slightly different specifications than the ones to be assembled in Thailand.
Then will come Japan-made Accord and Jazz units. To keep the pricing of the cars coming from Japan competitive, Honda Motor Company is subsidizing them.
That’s it? No, there are two more aces up Honda’s sleeve.
“Honda is bringing in the Pilot and the Odyssey this year,” said Voltaire. “Nothing is definite yet, but it’s something to look forward to.”
As for the supply chain of Honda’s manufacturing hub in Thailand, Voltaire expects things to go back to normal in May at the earliest.
“I did not abandon the ship,” declared Voltaire, who is now using his newfound free time to be with his wife as she recovers from a life-threatening ailment. “On the contrary, I will miss out on the victory party when Honda gets back on its feet again in 2012. I can now walk away with absolute peace of mind knowing that I have helped pave the way for Honda’s comeback.”
That’s good news for both Honda dealers and customers--and maybe bad news for the competition.
