When financial journalist Jeffrey Rothfeder set out to understand why globalization has failed, he got pulled into the story of Honda, a company that has thrived as a multinational. In more than 60 years in business, Honda has never lost money. Its profit margins are the highest in the industry and its factories among the most productive. Rothfeder talked with The Washington Post about “Driving Honda,” in which he explores the enduring culture established by company founder Soichiro Honda, a perfectionist who embraced mistakes as a way to learn and improve. He also goes inside Honda’s plant in Lincoln, Ala., a model of flexible manufacturing. The following was edited for length and clarity.
How did this book come about?
I didn’t think I’d be writing about Honda or even a specific company. What interested me more was the issue of why globalization is failing, because for two decades now it’s been the guiding principle that runs U.S. economic policy — that there is going to be free trade and we’ll lose the borders and there’s no difference between General Electric here and General Electric in China. And essentially globalization was going to lift all boats economically.
But it isn’t working out the way people had hoped. Most multinational companies do not make money in their globalized operations. Classically, General Electric will say that they make more than 50 percent of their revenue outside the U.S., but they are losing money in many parts of the world.
Why Honda?
Because it is one of the few multinational companies that has succeeded at globalization. Their profit margins are high in the auto industry. Almost everywhere they go — over 5 percent profit margins. In most markets, they consistently are in the top 10 of specific models that sell. They’ve never lost money. They’ve been profitable every year. And they’ve been around since 1949, 1950. And it’s a company that really does see the world as its market and thinks very hard about what it takes to be successful at that.
Everything it does — from corporate culture to its operational principles to the way it globalizes — was different from any other company I’ve ever looked at.