Honda cuts production by 50,000 units in U.S. and Japan
Honda is planning to slash another 50,000 units from its global automotive production in 2009. This is the third round of production cuts that Honda has announced so far, with the last cut being over 100,000 units produced in North America. This time, the drop will also hit Honda's home market of Japan where the Yachiyo facility will produce 21,000 fewer Kei cars than first planned. In addition, plants in Ohio (down 14,000 total units) and Alabama (down 6,000 units) in the United States and in Ontario, Canada (down 9,000 units) will also reduce their output.
Honda currently projects it will sell 1.264 million units this year in North America, a figure that's 12% lower than the initial forecast of 1.468 million vehicles. Despite this drastic downturn in sales expectations, Honda currently has no plans to reduce its workforce in either Japan or in North America.
[Source: Automotive News - sub. req'd]
Reader Comments (Page 1 of 1)
Gav 9:06AM (1/28/2009)
Honda are also cutting production in the Uk in a big way.
http://news.bbc.co.uk/1/hi/business/7833280.stm
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Kumar 9:54AM (1/28/2009)
It's bad for the business, but good to see more car companies trying to be more proactive.
Reminds me of the year Chrysler tanked (2005 I think). They had a great year before, but demand dropped a lot while they kept making cars instead of paying the idle union workers. We all know the result, lots that were loaded with cars noone needed/wanted, they discounted a ton, and resale values plummeted.
Hopefully the rest learned from that catastrophe.
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P.V. 9:57AM (1/28/2009)
It's a sign of the times, I guess. At least Honda is cutting production rather than jobs (to the same extent) or brands. This way they can avoid needing a bailout.
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Sean 10:11AM (1/28/2009)
Or they can just threaten to leave if the Japanese government doesn't screw with the yen again to protect their profits... oh wait.
Richard S. 8:49AM (1/30/2009)
Problem for Honda is that their main markets of North America, Japan and Europe is in the toilet. Sales are down by almost half overall in these markets.
This will seriously test Honda's commitment of no layoffs (at least for permanent employees). Running factories at much lower utilization rates will crimp profits for them.
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