Honda "Wants" to be High Paying?


    Honda plans new Midwest auto plant

    More on Honda. Interesting strategy here. Where most companies try to be cheap and hire the lowest-cost employees possible, Honda is looking to do the opposite, in a way:

    “David Cole, president of the Center for Automotive Research in Ann Arbor, Mich., said the plant likely will be located in a rural area–where Honda has many of its North American operations–so that Honda will not have to compete with high-paying urban businesses, he said. “They want to be the highest-paying employer in the region, which enables them to cherry-pick the work force,” Cole said.”

    Toyota does the same thing, locating in rural areas. But think about the efficiency that must come from having the cream of the crop employees in an area? Maybe there is an alternative to this “race to the bottom” of low wages?

    Most manufacturers think of “labor” as a generic “resource”, where you want the cheapest ones possible. That's dehumanizing. That's an example of how you might say “Mass Production does not respect people.” (as opposed to the mistaken idea that lean doesn't respect people).

    The lean mindset teaches us to value “respect for people.” Look at Honda's approach or how super selective Toyota is when hiring. They don't want the cheapest people. They want people who can be part of a team and people who can help improve things. They're hiring people for their brains, that shows respect. I'm sure their plant will be more successful as a result.

    Honda won't be ready to jump and move next year to a state, or country, with cheaper labor. Good for them.

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    Mark Graban
    Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


    1. “They want to be the highest-paying employer in the region, which enables them to cherry-pick the work force,” Cole said.”

      I’m not sure I buy that. By definition, the rural area has a much smaller workforce to ‘cherry pick’ from. The cream of a labor pool of 100.000 has got to be much sweeter than the cream of a labor pool of 5,000.

      I think it has more to do with the typical rural work ethic versus the urban one; and with the fact that the workers will not have options. It’s either work for Toyota or Honda, or go back to the farm

    2. Toyota is super selective. The president of Toyota said something to the effect of, “First develop people. Then develop cars.” Clearly, he puts people before the product, which shows that Lean is about the people, first and foremost, because they build/maintain/improve the system.

    3. When Toyota can choose 2,000 employees out of 63,000 applicants (San Antonio), that’s the creme of any crop.


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