Japanese automaker Honda was hiring American workers for its first plant on US soil. “It was a bit of shock that Honda decided to come to Ohio,” says Vining, now a chief engineer at Honda’s Marysville auto plant.
Vining, who was working for a small engine manufacturer, says getting a job at the new Honda plant felt like the opportunity of a lifetime. “Honda was a household name,” he says. “We recognized it for its quality and reasonable price.”
President Donald Trump sees that as a problem. In May, he declared imported auto parts and vehicles a national security threat and threatened to slap up to 25% tariffs on them.
That has left the future of Japan’s auto industry on American soil looking uncertain. As Trump and world leaders descend on Osaka, in Japan, Thursday for the G20, tariffs and the trade war with China will be high on the agenda.
But this isn’t the first time Japanese motor brands have been threatened by a trade war. In the 1980s, the United States also hit Japanese automakers with tariffs designed to bring motor manufacturing back to America.
Those measures only helped Japanese brands like Honda thrive.
Made in Japan
When Honda arrived in the United States, the “made in Japan” label was tarnished by bad memories of World War II and associated with poor quality workmanship, due to low levels of economic development in Japan in the post-war years.
“[Japanese automakers] had to overcome a lot of prejudice and mockery,” says Wanda James, author of “Driving from Japan: Japanese cars in America.”
During the 1950s, however, quality Japanese products such as the Minolta and Pentax cameras entered the United States market, shifting American attitudes.
By deliberately attempting to disconnect motorcycles from the counterculture image embodied by acolytes of the Harley-Davidson brand, the campaign created a new market, selling Hondas as a lightweight, lower-cost option to people who had never before thought of buying a motorcycle.
Oil crisis … or a blessing?
As Americans started seeking smaller, more fuel-efficient vehicles, Japanese car makers had an advantage over gas-guzzling US brands.
“That’s what sold a lot of the US public to the Japanese brands to this day,” says David Emerling, the director of the Center of Automotive Research (CAR) in Ohio.
Honda bosses decided to expand the business and, in 1975, Shige Yoshida, then vice president of American Honda, was dispatched to scout out a location for an automobile plant. The goal was to source parts locally and make products suited to local consumers.
Yoshida says Honda Motor chose Marysville owing to the friendly, hardworking locals, presence of a testing track in East Liberty, Ohio, and a favorable investment climate.
As the plant prepared to open, Yoshida, now age 87, started visiting auto factories in Detroit to get a feel for how Americans operated. “I really liked how people-oriented one manager I met seemed,” says Yoshida. “He walked through the production aisles greeting and smiling at everyone.”
Later in the 1980s, Yoshida welcomed US automakers to visit the Honda plants in Marysville. The collaboration, he says, was a good thing for the industry.
“Everyone saw Honda as an advantage, not a threat,” says Emerling. “Because they knew that job creation in a very rural state in Ohio would have an immense impact on the economy.”
Trade war of the 1980s
After President Ronald Reagan took office in 1981, the United States began pressuring Japan to open its market to American companies and reduce the trade imbalance between the countries — much as Trump today is trying to reduce the trade deficit with China, now the world’s second largest economy.
To avoid the quotas of the 1980s, more Japanese automakers decided to move manufacturing on to American shores and establish alliances with domestic car makers.
Faced with import restrictions, Japanese automakers also pivoted to selling more lucrative, luxury vehicles, such as the Honda Acura and Toyota Lexus, which competed with the medium-sized cars that had traditionally been the bread-and-butter of American brands.
New automotive reality
Fast forward 12 years and Japanese manufacturers are once again under the gun. But while Trump is threatening tariffs to boost the US economy, experts say the President’s tactics could actually deal a devastating blow to American consumers and workers.
“With history as a guide, a tight quota on Japanese auto produced cars or auto parts will hurt not just American consumers, but also American firms,” says Thomas J Prusa, an economics professor at Rutgers University. “That’s because many American jobs are tied to the supply chain that comes from Japan.”
It’s not just jobs that are at risk.
Currently, Japanese automakers fund research into manufacturing and advanced technologies such as artificial intelligence in tech hubs such as Silicon Valley. Tariff costs could squeeze budgets for such initiatives, says Manny Manriquez, general director of the Japan Automobile Manufacturers Association USA.
“The US auto industry can’t function and thrive if it’s cut off from international trade,” adds Manriquez. “Trade restrictions and continued uncertainty will not just weaken the entire automotive industry, they could result in lost opportunities for the US.”
The company added that it hopes trade negotiations can be resolved quickly.
Made in America
Since setting up shop in the United States, Honda has crossed many milestones.
Since being hired in 1979 as the ninth production associate for the ground-breaking Marysville motorcycle plant, Vining has witnessed Honda evolve.
He has worked in everything from manufacturing to information technology. He has seen the company grow from making motorcycles to engines, to setting up research and development facilities.
Vining says in upholding both Japanese and American ideas in Marysville, Honda merged two cultures.
“In the beginning, we talked about the Japanese culture and we also had an American way of doing things. But what we found is that we created what we called the ‘Honda way,'” says Vining. “It became the best of the American and Japanese ways.”
CNN’s Natalie Leung, Jason Kwok, James Griffiths, Brett Roegiers, Mohammed Elshamy and Brad Lendon contributed to this report. Edited by Jenni Marsh in Hong Kong and Mark Thompson in London.