Honda to Cut Production and Worker Pay...
The production downsizing will be achieved by closing down the factories in Indiana, Ohio, Alabama, Mexico and Canada for 13 non consecutive days, between May 1 and July 31, to reduce the inventory of unsold vehicles. As a result, workers will not receive pay for six out of the 13 days. In addition, salaried workers' compensation will be reduced in the new fiscal year that started today.
Honda has also offered buyouts and early retirement incentives to most of its 32,400 workers in the US and Canada, but did not give any details about their program. Honda spokesman Ed Miller said that his company told workers to expect bonus payments to be reduced and even eliminated this year.
The Japanese manufacturer also did not give any details regarding its sales and production forecasts for the new fiscal year, but it is likely it will focus mostly on the new Insight hybrid, who strangely enough, according to Honda, it could have sustained production on its own.
Last week, the company said, according to Motor Authority, that it struggles to satisfy consumer demand for the hybrid models, as out of the 600 units/day output, at least half is destined for the United States market.
At the time, bringing production of the Insight to North American plants was out of the question, due to the lack of suppliers there. It would now seem that Honda's cost cut plans were also a part in this decision.