Detroit model is outdated: veteran auto exec

TOKYO (Reuters) - As a young engineer at Honda Motor Co Ltd in the early 1970s, Shoichiro Irimajiri recalls thinking the Japanese carmaker could never hope to rival the might of Ford Motor Co.

In 1973, the Detroit giant shipped three dozen of its Galaxie sedans over to be fitted for Honda's CVCC engine system to clear new emissions regulations in the United States.

"I took a spin in that car and thought to myself, 'We could never build anything like this,'" Irimajiri, now co-chairman of Japanese parts maker Asahi Tec, told Reuters, remembering the exhilarating ride of the high-powered machine.

"For me, the Big Three were at the pinnacle of the industry, somewhere above the clouds."

It didn't take long for Irimajiri to change his mind.

Dispatched to Ford for four months for the CVCC project the following year, he noticed something odd. His counterparts in Dearborn, Michigan seemed to know less than the Honda team, who were schooled in the complete engineering process -- from the drawing board to the testing ground.

At first, he assumed he was meeting only junior staff, but his conviction grew as he got to know engineers higher up the ranks.

"That was 1974, when I started to think we had a shot at beating them," said the 68-year-old Irimajiri, a well-known, long-time industry insider who also had a stint on the board of top U.S. supplier Delphi after leaving Honda in 1992.

"And, when I became head of Honda's U.S. manufacturing operations 10 years later, we were on an equal footing, with the Accord on the bestseller list.

"The Big Three lost the leadership status 20 years ago."

As U.S. lawmakers prepare to discuss a possible multi-billion dollar bailout of cash-strapped General Motors, Ford and Chrysler LLC, many seasoned industry hands like Irimajiri are questioning their future in the long haul.

Irimajiri, known in the United States as "Mr Iri," and once courted to join GM as a top executive, believes the U.S. business model, and even its societal structure, is not geared toward making it as a successful carmaker in what is a brutally competitive business with many strong rivals.

The main obstacle, he says, is a pervasive mentality that engineers and factory workers are second-class citizens. That damages motivation on the ground, where much of the difficult work takes place. Not so in Japan, he says.

"Detroit has some great technology, but there's a big difference between the way technology is defined in the U.S. and in Japan," he said.

"In the U.S., it's all about the invention, the patent. But in reality, there are many stages: innovation, application, and applying the technology in an actual, winning product with feedback from consumers. The latter stages, for an American, is grunt work. And that's where they lose competitiveness."

Irimajiri has seen it happen at Rover, the defunct British carmaker in which Honda once had an equity stake.

Visiting its outdated factories in his role as a Rover director, Irimajiri encountered the notion again and again that plant workers were at the bottom of the food chain.

"I knew then that there was no hope. It wasn't a question of one or two companies -- it was the society as a whole that thought that way. And before you knew it, the British auto industry had faded away."

Irimajiri hasn't given up on the U.S. Big Three.

The auto business isn't rocket science, he says; all it takes is one hit product to turn the company around, and the patience to see the entire, often tedious process through.

"Mazda did it with the Familia (Mazda 323), Chrysler with the minivan and Honda with the Odyssey. You create one bestseller and the whole company gains momentum, your brand image improves and dealers get healthy. If a company focuses on that, it still has a chance," he says.

As for the competition, Irimajiri fears the management-focused mentality is creeping into Japanese society, jeopardizing the country's prowess as a manufacturing nation.

"The basis of the Japanese manufacturing model is that even if each individual isn't the brightest engineer, in teams they can do great things.

"That kind of work ethic is losing its appeal as society becomes more Americanized, and that worries me."

(Editing by Ian Geoghegan)