Honda and Toyota plan to cut back production or adjust overtime at several North American plants because of labor disputes that have snarled shipments at 29 ports on the West Coast.
Honda, starting Monday, will reduce production at plants in Ohio, Indiana and Ontario as the labor tension has slowed delivery of “critical parts to keep the production lines running smoothly and efficiently,” Honda spokesman Mark Morrison said today.
Parts such as electronics and transmissions are in low supply, Morrison said
“At Honda, we have been working to maintain the flow of parts to our North American plants, including utilizing alternative means of transportation, in the effort to maintain production for our customers,” he said. “Despite our best efforts, however, the prolonged slowdown at the port operations will soon begin to impact some of our North American production operations due to parts shortages.”
Honda has been using air cargo and special truck shipments to receive vital parts since January.
On Monday, parts shortages at plants in Ohio, Indiana and Canada will begin to affect regular production.
Honda will adjust production at six plants:
- Honda Manufacturing of Indiana in Greensburg;
- Honda of America Manufacturing in Ohio: Marysville Auto Plant, East Liberty Auto Plant, Anna Engine Plant; and
- Honda Transmission Manufacturing of America in Ohio, Russells Point.
- Honda of Canada Manufacturing in Alliston, Ontario, also will reduce production, but Monday is staff holiday in Canada. No production was scheduled, Morrison said.
The automaker’s plants in Alabama, Georgia and Mexico have not been affected.
The slowdown is dependent on the outcome of the labor disputes at the West Coast ports, but Honda expects that the plants will have to adjust productionuntil Feb. 23, Morrison said.
Eighty percent of the parts used in Honda’s North American-built vehicles are domestic. The automaker works with more than 700 suppliers in North America.
“Shipments from Japan are relatively small compared to the amount produced domestically,” Morrison said.
While the labor battle impacts production, Honda plant workers will work on plant maintenance activities and other ongoing business, Morrison said. They can choose to report to work for full pay, used paid vacation time or take time off without pay.
Toyota's situation
Toyota’s North American plants are also making changes because of shipment delays. The automaker said it has adjusted overtime at some of its plants.
“In an effort to minimize production disruptions Toyota is expediting shipments by air -- a standard shipping method we use as needed. We continue to monitor the situation,” Toyota said in a statement.
A company spokeswoman was unable to say which plants will be affected, “as the situation is fluid.”
Subaru, which builds cars in Lafayette, Ind., also began airlifting its parts in January. Fuji Heavy Industries, which makes Subaru vehicles, said air delivery for parts may increase costs by 7 billion yen ($60 million) per month, Mitsuru Takahashi, Subaru CFO, told Bloomberg last week.
"We are not experiencing any delays to our production at the present or in the immediate future," a Subaru U.S. spokesman said in an e-mail today.
James McKenna, the president of the Pacific Maritime Association, told Bloomberg that delays at many of the ports are leading to a “coast-wide meltdown.” He called on the International Longshore and Warehouse Union to accept management’s second formal contract proposal since negotiations began last May, Bloomberg said.
