THAI FLOODS: Honda's US unit details output slowdown
As flooding in Thailand continues, a number of Honda suppliers in Asia currently are unable to maintain parts production which is disrupting the flow of parts to production operations in North America, the automaker's US unit said.
To "better manage the available parts supply in North America and globally", from tomorrow (2 November) the automaker will "temporarily adjust" production at its six Honda four-wheel vehicle plants in the US and Canada.
"Currently, it is anticipated that this situation will require adjustments for the next several weeks," American Honda said in a statement.
It said car production would be at approximately half of the original plan until 11 November with subsequent adjustments to be announced "as they are determined based on the parts supply situation".
All Saturday overtime work has been cancelled in November and a non-production day scheduled for Friday, 11 November.
Honda added that its planned December on-sale date for the redesigned US-made 2012 Honda CR-V small SUV "could potentially be delayed by several weeks". The on-sale date will be announced soon, it said.
The UK-built European market CR-V is not due out until around the end of next year.
In 2010, 87% of Honda and Acura brand vehicles sold in the United States were produced in North America. Most parts and materials for these are purchased from suppliers in North America but a few critical electronic parts are sourced from Thailand and other regions.
"Honda is working closely with its suppliers in Thailand and throughout its global network to re-establish the flow of parts for the products made in North America," the automaker said.
"As in the past, Honda remains focused on minimising the impact to its [workers] and their families and plans no layoffs at any of its North American facilities. Non-production days will continue to be treated as 'no pay, no penalty', meaning employees can report to work, use a holiday, or take the day off without [pay] or penalty.
The latest development is an additional blow to Honda's US unit whose redesigned 2012 Civic, launched earlier this year, has been harshly criticised by consumer media, including influential Consumer Reports, which dropped the latest model from its 'recommended' list.
A fall in Honda's US sales in the fiscal second quarter, global results for which were announced on Monday (31 October) was the "worst quarterly drop"... on record" [back to 1991], according to Edmunds.com analysts. US sales in the quarter were off 20.8% to 252,355 units, their data showed.
The automaker said the March Japanese earthquake and the strong yen were among the reasons its automobile unit sales, sales revenue, operating profit and net profit were all down sharply year on year in both the second quarter and first half.
The Thai floods have also halted Honda vehicle production there. Japan's Nikkei business newspaper on Monday reported the plant - the 'mother factory' for certain models also built by Honda Siel in India - could be down for as long as six months.