BIRMINGHAM, AL – With fuel prices rising,of America Mfg. Inc. is beginning to rethink its stance on the issue of on-site suppliers at its vehicle assembly plants.
Charles Ernst, vice president and plant manager atMfg. of Alabama LLC, says just because the auto maker has not established a supplier park yet “doesn’t mean it is something we shouldn’t consider.”
When planning began for Honda’s newest North American plant in Lincoln, AL, fuel prices ranged from $0.90-$1.05 a gallon, Ernst says at a manufacturing conference here.
Honda's Lincoln, AL, assembly plant.
“But now with fuel prices up, I know I’m hearing from my purchasing and logistics side that we’re being hit with some fuel surcharges from some of our trucking firms – and of course that wasn’t in the budget,” he says.
One possible glitch to establishing supplier parks at its North American plants would be Honda’s somewhat vertical integration. For instance, it casts its own engine blocks and heads and performs suspension subassembly in-house.
“Logically, if anything would come out of that then I’d have to find another use for (our workers) to keep them gainfully employed,” says Ernst of Honda’s 4,400 strong staff.
Meanwhile, Ernst tells Ward’s Lincoln could produce Honda’s new Ridgeline compact sport/utility-pickup if demand were to increase rapidly.
Ridgeline currently is built solely at Honda’s Alliston, Ont., Canada, plant, but Alliston and Lincoln both produce the Pilot SUV and Lincoln took over production of the Odyssey minivan from Alliston last year.
“Theoretically, we could probably build any number of the Honda products that are made in North America on our line,” says Ernst. “The question becomes, is it efficient and cost effective? Probably not. But in the light-truck line we try to make it as common as possible between us and Canada, so if we need to shift volume around for some reason we can do that.”
Although admitting it wouldn’t be easy to the accommodate Ridgeline, Honda’s largest vehicle to date, Ernst says “the basic infrastructure is there” at Lincoln.
He says Lincoln has an advantage over Alliston when it comes to assembly line pitch, as there is more clearance on Lincoln’s assembly lines between the front and rear-ends of vehicles than there is at Alliston.