HONDA

No tiers, no unions, lots of flexibility

* Honda workers can beat the pay of those at the Big Three because they play by different rules.

Once a symbol of low-wage foreign competition, Honda of America Mfg., based in Marysville, Ohio, now faces intense low-wage competition from the heavily unionized Big Three automakers.

But this Americanized company from Japan isn't considering the two-tier wage structures adopted at Dayton's auto plants and in other U.S. cities where the stated goal was to pare labor costs.

`We have never even entertained the thought of a tiered-wage system,' said Tim Garrett, vice president of administration of Honda of America Mfg. `I don't think that is an image or an idea that we really would look at as being viable within our operation.'

Common parking lots and cafeterias, empowered worker teams and a lean management structure attest to Honda's approach: equality of treatment and teamwork among its production workers, who are called `associates.'

The $22.77-an-hour average compensation received by those associates is more than three times the $7.50 an hour of many Dayton area autoworkers at the bottom of two- and-three-tiered wage structures enforced under contracts reached between companies and unions.

A Honda associate's $47,367-a-year total compensation includes a base wage of $19.60 an hour or $40,768 a year. In addition, each associate can earn an annual attendance bonus of $2,080 and gain sharing of $4,519.

Honda associates also receive fully paid medical plans, including such plans for retirees, plus benefits that include a pension and a savings plan with limited matching contributions by the company.

But Honda's executive compensation doesn't compare with the top executives at the Big Three.

"We don't have anyone making $9 million a year," chuckled Roger Lambert, Honda's senior manager of communications. "We don't have anyone close. The difference between a production associate's rate of pay and what they gain to make an executive's rate of pay is nowhere near what you find in Detroit." (General Motors former chairman John F. Smith Jr.'s compensation was about $9 million, according to 1995 filings with the Securities and Exchange Commission.)

Honda employs more than 12,000 associates at its four manufacturing plants in Ohio - the Accord sedan and coupe plant and motorcycle plants in Marysville; the engine plant in Anna; and the Honda Civic sedan and coupe, and Acura CL coupe plant in East Liberty.

Unlike many companies where some workers receive premiums above base pay, at Honda welders, painters, assemblers and other production associates get the same wages and eligibility for bonuses.

And without union work rules to restrict job flexibility, Honda can move its workers around more.

`So within any given department, we can rotate associates to different lines, different areas," Garrett said. "They gain the experience and that gives them the opportunity to do something different. It also helps us to work with associates who may be having difficulties with a particular process.'

Garrett noted that labor costs are but one component of Honda's overall cost structure and that increased worker flexibility and efficiency can help offset labor costs and keep the company competitive.

"There is a distinct advantage to flexibility," he said.

The operation, which began with motorcycle production in 1979 and added automobiles in 1982, also emphasizes job security - a fundamental concern that often motivates workers to join unions.

"We've never laid off," Garrett said. "Never. And even back a few years ago when our production dropped due to market conditions - dropped in the 10 to 12 percent range - not only didn't we lay off during that period of time, it was not even a point of discussion."

Associates' base pay is raised twice a year, Garrett said.

`There has never been a period of time when we have not increased base pay,' he noted.

But Honda of America, as a newer automaker in the U.S., has some advantages over its Big Three competitors.

"Some companies have a young labor force and don't have to pay the health care costs that a GM does," said David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan's Transportation Research Institute. "And the newer automotive companies like Honda or Toyota can be much more selective in the people they choose for jobs.

"Honda hires no one that had a poor attendance record at other jobs, and they have certain skills the company is looking for," said Cole, a regular consultant to GM. "And a younger work force is more flexible and not as set in its ways like the labor force GM has. That's a huge advantage when it comes to productivity and ultimately making a profit."

Honda declined a request to tour one of its plants and to interview its associates.

A 1995 survey of Honda associates suggested that not every worker is happy with conditions at the plants. The survey is an exhibit in a federal lawsuit filed by several women alleging sex discrimination. The lawsuit is pending in U.S. District Court in Dayton.

About 55 percent of workers surveyed gave a `favorable' response when asked if Honda was a good place to work and provided good pay and benefits. They responded most favorably to teamwork at Honda.

But only 30 percent responded favorably to management and just 39 percent gave favorable responses about two-way communications at the company.

The survey offered these as `typical comments' from associates:

* `We have grown too fast and not allowed for our middle management the time needed to develop, mature."

* `Promotions are done by who your buddy is rather than who is most qualified.'

* `I feel that above all (Honda) is a good place to work, if you work hard and care about your job. But at times they forget that people have families and they expect you to put your job above your family.'