Honda cuts North American production again by 119,000 vehicles

No. 2 Japanese automaker lowers production by another 119,000 vehicles as demand weakens; no worker layoffs.

Honda Motor Co. said Thursday it will further cut vehicle production in North America as it adjusts to plunging automobile demand.

Tokyo-based Honda (HMC) is reducing production by another 119,000 vehicles for its fiscal year ending March 31, bringing expected production for the fiscal year to 1.3 million units.

Honda spokesman Ed Miller said the cuts will take place at five of Honda's seven plants in the U.S. and Canada. Employees at the plants will be given other tasks or can take paid or unpaid vacation time, he said. No layoffs will result from the cuts, he said.

Falling sales

Honda, the second-largest Japanese automaker, has been hurt by the global auto industry downturn, a product of slowing economic growth and tight credit markets around the world. Earlier this month, the automaker said its U.S. sales fell 32% in November and 5% for the first 11 months of the year.

The company's latest production cuts come on top of previous reductions of 56,000 vehicles for North America announced earlier in the fiscal year. Last month, Honda said it was cutting production in Japan and Europe by 61,000 vehicles.

Affected plants

Miller said production will be cut by 18,000 vehicles at Honda's plant in Lincoln, Ala.; by 58,000 vehicles at its plants in Marysville and East Liberty, Ohio; by 37,000 vehicles at its operations in Alliston, Canada; and by 6,000 vehicles at its recently opened plant in Greensburg, Ind.

U.S.-traded shares of Honda fell $1.55, or 6.7%, to $21.45 in morning trading amid uncertainty over the fate of a federal rescue of the U.S. auto industry. The Senate failed to pass a proposed bailout package Thursday.

Source : CNNMoney
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]