• Dec 12, 2008
The dramatic drop in U.S. vehicle sales is not confined to just the Domestic automakers. Earlier today, General Motors announced an "unprecedented" cut in production for the first-quarter of 2009, and now Honda has followed suit, enacting a set of North American cuts of its own. While the 119,000 total vehicles is just short of half of what GM will drop, these cuts should still be viewed as rather drastic measures for the Japanese automaker, which builds about 80% of all Hondas and Acuras destined for U.S. consumption in North American plants, and had already lowered sales forecasts for 2009.

These production cuts will be achieved by slowing assembly line output and closing various North American plants for two days this month and up to a week in January, including at the Greensburg, Indiana plant that has yet to reach full capacity. Honda is not planning to lay off any workers at any of the affected plants.

[Source: Automotive News - sub. req'd | Photo: Dimas Ardian/Getty]


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  • 31 Comments
      • 6 Years Ago
      Makes no sense to build what you can't sell unless your objective is to create a huge unsold inventory that collects dust until it's eventually sold at a loss.

        • 6 Years Ago
        sounds like a plan
      • 6 Years Ago
      So let me get this straight..... They are not laying anyone off... Hmmmm isn't that somewhat like the job bank????
      So one other point... So they are going to slow production down here in the states... But didn't we read a story here on auto blog with inventory piling up at the shipping ports?? Keep importing but slow down the U.S. side.. How long will they pay those workers that are not working?????
      Things are really getting bad if even the almighty imports are hurting.. December sales are going to be worse than November. I have a friend that works at a BMW dealer and they only have 4 cars used and new out for the month!!!!
      • 6 Years Ago
      iQuack,

      That was the General's plan all along. This whole bailout game is merely a ruse. Unfortunately the suckers in Canada bought in to it and have offered them bucks to stay in business - and what do Canadians get for it? Nothing. No equity, no executive compensation cap, none of that. Figure that once Mr. Bush offers the US bailout then all the big wigs from Detroit and their corporate jets will end up in Oshawa and Toronto. No harm no foul.

      jb
      • 6 Years Ago
      @Jaime, how stupid can you be??? You blame Obama, really? A man that isn't even in power yet, when all of this is happening and you blame him? You want a polititian to point at, point at your good 'ole boy Bush and then you'd be heading in the right direction.
      • 6 Years Ago
      All I can take from these cuts is that you should go buy a car now if you want one. All the automakers are going to be doing huge production cuts to bring inventory in line with demand.
      Which means the glut is just about peaked now, and the deals are probably about as good as they'll ever get right now.
        • 6 Years Ago
        No kidding. First GM, now Honda.

        I wonder what specific cars are going to have their production lines reduced?
      • 6 Years Ago
      If they're not going to lay off workers what are they going to do? Pay them to not work?
        • 6 Years Ago
        I'm guessing that they wouldn't..

        unless they were union workers...
        • 6 Years Ago
        Why not, they can still afford to. Hell, they're gonna save $300m next year by not running in F1 so I'm sure some of that can go to pay workers. Must be nice. Somehow, the non-unionized workforce has much greater job security than those under the "protection" of the UAW. I feel for the Detroit workers.
        • 6 Years Ago
        I guess their " JOBS BANK " is OK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
      • 6 Years Ago

      happy_penguin said,

      If they're not going to lay off workers what are they going to do? Pay them to not work?


      No, no young grasshopper. They will be attending training courses to improve safety and quality. For new plants such as the one in Indiana you take this opportunity to give your associates refresher courses or just work on your weaknesses. The Japanese also offer them the choice of working or have the day off without receiving disciplinary action.
        • 6 Years Ago
        They should just make their employees work out all day to get them in peak physical shape.
        That way it'll be a healthcare cost-cutting measure in the long run, hahaha.

        Seriously though, if they split it halfway between quality improvement training and half with working out/sports it'd probably help costs in the long term, since most major corporations basically pay for all the healthcare their employees use instead of using a 3rd party insurer. They just hire a health insurance company to distribute and manage benefits.
      • 6 Years Ago
      Honda prides itself in never having layoffs in the U.S., so they are probably willing to suffer the cash burn in order to maintain that reputation.
      • 6 Years Ago
      Honda spent a lot of money training each assembly worker. They are not low-skill workers that can be laid-off and hired with ease. There are costs in training every single new worker and it takes time until the new worker get the hang of it and can achieve the productivity and quality work of more seasoned workers.

      At the same time Honda needs to adjust production to demand, so in the meantime these surplus workers will be further retrained with the hope that when demand picks up again, they will be put to good use.

      However I am sure if Honda sees a prolonged slump in demand and decide that these workers will not be needed they might resort to Big 3 style buyouts.
      • 6 Years Ago
      The guys at NYT are going 'HONDA IS CUTTING PRODUCTION??? BUT...BUT...IT DOES NOT COMPUTE!"

      Carlos
      • 6 Years Ago
      All of you are crazy, we all know the world is going to end in 2012 :p.
      • 6 Years Ago
      I wonder what happens when an automaker slows down the assembly line. Does that means they put more care into quality?
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