With no sales uptick in sight, and inventory mounting,Motor Co. Ltd. is cutting production in North America and for the first time offering voluntary buyouts to nearly all its 27,000 U.S. and 5,400 Canadian employees, a spokesman tells Ward’s.
Ed Miller says the auto maker also will take 13 non-production days at plants in the U.S. and Canada between May and July, eliminating 62,000 units from its schedule. For six of the 13 days, workers will have the option of using vacation days or staying home with no pay.
In Mexico, wherebuilds the CR-V cross/utility vehicle largely for export to the U.S., it reportedly will eliminate 13 days of production between May and September. A Honda Mexico spokesman tells the Associated Press none of Honda’s 1,800 Mexican workers will be furloughed.
Miller declines to detail the size of the separation packages Honda is offering U.S. and Canadian workers. The packages are available to those who qualify for retirement and some who do not.
Typically to qualify for retirement, an employee must be 55-years old with 10 years of service, he says.
Employee bonuses also are affected by Honda’s announcement. “We set our current expectations that bonuses will be greatly reduced or eliminated,” Miller says, adding the bonuses “tend to occur later in the calendar year.”
Honda will not cut the base pay of its North American hourly workers but is reducing compensation for all salaried workers, including top executives at its American Honda Motor Co. Inc. sales arm in Los Angeles, he says.
Last week, the Cleveland Plain Dealer reported on its blog that Honda has been storing as many as 10,000 unsold cars and trucks atMotor Co.’s shuttered Lorain, OH, plant.
Miller told the newspaper too much production in December and January was to blame for the backlog of Civic compact cars, Odyssey minivans and Acura MDX CUVs.
Honda in December announced it was cutting 119,000 units from its production plan before the end of the fiscal year, which ended March 31, to reduce inventories.