Honda’s Production Cuts In Crossover Vehicles
The Japanese automaker, Honda Motor Co. announced that it will cut production of some of the light trucks and crossover vehicles in coming days in the U.S. Hurt by the sky-high price of gasoline and consumer demand shift from larger vehicles, the automaker decided to cut the production of both the Odyssey minivan and Pilot by 10,000 units at its Lincoln assembly plant in Alabama.
The production cut will take place from August through October. In order to match production with consumer demand, Honda will close the Lincoln plant for two days on August and will cut second shift production at the plant every Friday in August through October. In the first half of this year, Honda built a total of 158,316 Odysseys and Pilots, down 2.4 percent from the same period in 2007.
However, Honda spokesman David Iida said, “Honda is not immune to the shift in the market,” “We don’t want inventories to get too high.”
Iida said, Honda wants to keep Odyssey and Pilot inventory between a 60-day and 45-day supply respectively. As of July 1, it had a 78-day supply of Odysseys and a 99-day supply of Pilots.
The company said during the production cut, the automaker will not layoff workers, instead, Honda will use the time for employee training. The workers can choose to either unpaid time off or use paid vacation leave.
The automaker is also planning to consolidate the production of Honda Ridgeline at the Lincoln assembly plant. The brand is currently built is Alliston plant in Ontario. The Ridgeline’s production will start in early 2009.
Besides, Honda will increase output of the Honda Civic compact at its plants in East Liberty, Ohio and Alliston.
