![Officially Official: 2011 Audi A1 finally arrives [w/video]](http://www.blogcdn.com/www.autoblog.com/media/2010/02/01-2011-audi-a1-630op_143x85.jpg)
Former Ford plant home to thousands of unsold Hondas
Being a Clevelander, I had already heard about what's going on at the site of Ford's former Lorain Assembly plant. At one time it was producing more than 10,000 vans and SUVs per month, but that number dwindled until eventually the plant was shuttered in 2005 and the property sold to the California-based Industrial Realty Group. We've heard the facility has since been rented out to a number of companies and we've even seen advanced driving courses being hosted on its expansive and now weed-ridden parking lot.
While slow sales once led to the Lorain plant's demise, the same situation today has given it a new purpose. Honda, which operates a number of plants in Ohio and takes full advantage of the state's existing network of rail lines, is renting the plant's parking lot to store up to 10,000 units of unsold inventory. The Japanese automaker, itself not used to having an overabundance of unsold vehicles on hand, has taken over the giant parking lot with a sea of Civics built in Ohio and Ontario, Acura MDX crossovers from Canada and Odyssey minivans from Alabama.
We've heard plenty of news reports about ports on each coast overflowing with unsold vehicles, but this is the first we've heard of a plant formerly owned and operated by a domestic being repurposed by an import automaker just for the use of storage. It's a sign of the times that companies are using creative solutions to get by, and this one ranks right up there.
[Source: Blog.Cleveland.com | Photo by Marvin Fong / The Plain Dealer]
Reader Comments (Page 1 of 2)
Aprime 6:42PM (3/16/2009)
Were the cars built out of iron-y?
Reply
jpm100 6:44PM (3/16/2009)
Represents a different philosophy.
US companies actually have roadblocks in the way of the union and dependent suppliers that stop them from scaling back. Otherwise they'd have the will.
The Japanese companies don't have those obstacles. So lack the ability or will to let go.
If this customer malaise persists for very long, the shoe will be on the other foot even with the Japanese government starting to funnel them money.
Reply
why not the LS2LS7? 6:56PM (3/16/2009)
Japanese companies (including at home) have similar issues. And they are stacking up cars around the world.
It doesn't save much money to just make 20% fewer cars per shift. You need to actually shorten the shifts (pay fewer hours). And even if you can manage that, you have supplier contracts which are negotiated quarterly that mean that you'll have parts showing up (and you paying for) even if you don't build anything out of them.
After stacking up cars for 90 days, both Japanese and domestic makers will have negotiated new contracts with each supplier which mean they can have fewer parts showing up and then it really starts making more sense to have big cutbacks and shutdowns.
refugee7 6:56PM (3/16/2009)
Yes, different philosophy. Most Japanese people stay with the same company their entire lives. Look at the 90s bubble burst in Japan and you will see many did not lose their jobs, they were trained to be more efficient and did various activities.
why not the LS2LS7? 8:01PM (3/16/2009)
refugee7:
Lifetime employment in Japan only applies to those who work at very top-end companies. It would apply to Toyota employees, but remember Toyota subcontracts out most of their work. And the companies that fulfill those subcontracts do not offer employment for life.
There are surely a lot of former auto-related workers out of jobs in Japan right now.
elprogramer 10:24PM (3/16/2009)
Excuse me? If General Motors say they're cutting engines or even scrapping the design entirely, it happens.
Suppliers don't just fly off the handle and Unions don't march around dictating policy, so I don't know what lies you've been listening to.
Farmboy 6:45PM (3/16/2009)
What a full staff of workers in the auto industry? Oh, wait...
Reply
Tricky dicky 6:51PM (3/16/2009)
wow if they made cars people want they'd be in better shape.
hyuck hyuck.
Reply
____ 7:30PM (3/16/2009)
what the hell is that supposed to mean?
Conundrum 10:01PM (3/16/2009)
@______...
Don't get around auto sites much do you? It was obvious sarcasm. But since you ask... Hondas US business is based on selling Accords and Civics and if they slump, Honda slumps. Honda sold more Civic/accords than Fit, S2000, Pilot, Odyssey, Element, Ridgeline, FCX, and All of Acura (TL, RSX, TSX, RL, MDX, and RDX) all combined. Same singleminded setup that the domestics continually get bashed for!
53,280 Civ/ Cords sold in Feb 2008
33,025 Civ/Cords sold in Feb 2009
20,255 Difference between 2008 and 2009
bssplayr 8:06AM (3/17/2009)
For years now, people have referred to the big 3 as building 'cars that nobody wants.'
It's a ridiculous statement, really - if nobody wanted them, why were they still selling millions of them every year?
This article just goes to show that EVERYONE is facing difficulty - but the Japanese brands have done a better job of covering it up. First we have Toyota, leading the world with recalls, and last week's article about covering them up; now we see that they are having just as much trouble selling them as anyone.
Luis 8:30AM (3/17/2009)
The problem with the Big 2.5 (2 1/4 now?) is that they were selling them with huge discounts. Very few people have ever paid MSRP for a hulking SUV from Ford or GM or Chrysler. "Employee pricing" has been around for years, not just this current recession. Honda and Toyota selectively offer discounts, and are less willing to tarnish their brands and re-sale values with such massive discounts. $1,000 - 1,500 is all you ever see on Toyotas and Honda doesn't offer rebates. Compare this to $5,000 PLUS employee pricing from the 2 1/4. Big Big Difference in perception of value.
Saturns held their value pretty well in the 90s when they stuck to the no-haggle price. Reputation in this regard means a lot.
chconline 6:52PM (3/16/2009)
You know, if they gave me a good deal, I would pick up a Civic Si today. Too bad they aren't. :P
Reply
superman211 11:31PM (3/16/2009)
Yeah, like 5K for a new one. Better that collecting dust!
chconline 12:37AM (3/17/2009)
Lol, even if they sold me one for $12k, I would pee my pants and be all over it.
why not the LS2LS7? 6:53PM (3/16/2009)
That's very creative. Now they just have to hope for a huge hailstorm and they can avoid having to shut down for 2 months to eat up this surplus.
Reply
jamie 7:01PM (3/16/2009)
The JIT manufacturing system has hit a snag. The customer is king, and without customers it doesn't matter how efficiently you can manufacture your product. Without customers your economic model is crap.
The only solution is to cut back shifts and close factories until the overstocked supplies run out. Unfortunately, that put the Tier 1 and Tier 2 suppliers at great risk of failure. They count on steady employment and production to eek by on. When the auto companies say, "That's enough", then the suppliers cringe, rollover and play dead. Unfortunately many of them will not survive the current dilemma.
GM. Ford and Chrysler are already cutting back everywhere they can. Toyota and Honda have responded in kind, but not sufficiently enough to stave off the biggest summer 'fire sale' you have ever seen. To put it bluntly, Toyota and Honda are cooked. Someone sat on the egg that the golden goose laid.
How soon before Toyota and Honda start heavy DISCOUNTING? They could end up being charged with DUMPING imports if that ever occurs. Trade wars just around the corner...Keep your eyes and ears open for the first volley.
Reply
Stéphane Dumas 8:11PM (3/16/2009)
and it's just the tip of the iceberg, I spotted this article from Automotive News
http://www.autonews.com/article/20090316/ANA03/903160330/1142 http://forums.motortrend.com/70/7517715/the-general-forum/toyotas-residuals-take-a-dive/index.html with heavy discounting, it might hurt more or less the resale value
IOMTT 7:11PM (3/16/2009)
Keep an eye out...cars are being stored in all kinds of places. I saw a bunch of Accords in a roped off portion of a small company's parking lot a month or so ago. I wonder what I could charge for space in my back yard? Too bad the HOA would probably not look too kindly on that idea!
Reply
IOMTT 7:22PM (3/16/2009)
Not sure if North American built Accords and Civics would be considered imports in regards to dumping. However, I believe you are correct regarding the supply chain involved. JIT principles are very sound, but the current situation will play havoc.
Reply