Honda to Cut North America Assembly as Parts Supply Dwindles

Honda Motor Co., which makes more than 80 percent of the automobiles it sells in the U.S. at North American plants, plans to reduce output on the continent starting tomorrow as parts supplies from Japan dwindle.

Employees were told today that the Tokyo-based company will cut production temporarily by varying levels at factories in the U.S., Canada and Mexico, said Ron Lietzke, a spokesman based in Marysville, Ohio. Honda doesn’t know how long the reductions will be needed, he said.

“It’s a fluid situation,” Lietzke said. The company relies on Japan for “a small number of critical parts,” including some needed for engines and electronics, he said, without being more specific.

The magnitude-9 quake and tsunami that struck Japan on March 11, leaving more than 27,000 people dead or missing, has temporarily hobbled auto and parts production there, with Honda, Toyota Motor Corp. and Nissan Motor Co. idling most factory lines. Honda previously suspended orders from U.S. dealers for Japanese-built Honda and Acura models because of the temporary shutdown of two auto-assembly plants there.

The company declined to say how much North American production would be lost as a result of the cuts. As shifts are canceled or reduced, workers may do non-production assignments with pay, use vacation time or take time off without pay and without a penalty to their monthly attendance bonuses, Lietzke said.

Download: ESI's Prestowitz Discusses Japan's Supply Chain Role


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