Some of Honda's parts suppliers in Japan will resume production on Monday,
beginning the process of restoring auto assembly to more normal levels, the
company said yesterday.
The automaker had cut back to partial shifts at its Ohio assembly plants,
beginning two days ago, because of a dwindling supply of parts.
But even so, the parts factories will initially be running at about
50percent capacity, and shipments from Japan to the United States will take
weeks to arrive.
While the Honda-owned suppliers will restart operations, several outside
suppliers in Japan are still offline, said Ron Lietzke, a Honda spokesman.
"There are still many questions relating to the supply of parts
manufactured by other suppliers in Japan," the company said in a statement.
Honda suffered widespread damage from the March 11 earthquake and
tsunami, both to its parts plants and vehicle assembly plants. All of the
company's assembly plants will be active again by April 11.
At this point, most dealers selling Japanese cars in the U.S. say they
have enough inventory to meet their needs, despite the fact the disaster has
cut output by at least 400,000 vehicles.
"As it stands right now, you can still go to any dealership and get any
model you want," said Ivan Drury, an analyst with Edmunds.com, which provides
car-buying information to consumers.
The current disruption was such a freak occurrence that there is little
need to change the way Honda works with suppliers, said Peter T. Ward, a
professor of management at Ohio State University. He noted that the company is
known for the efficiency and flexibility of its relationships with suppliers.
"The risk is worth it when you think about how remote the risk is," he
said.
The slowdown in vehicle production is unlikely to hurt sales, said George
Augustaitis, an analyst with IHS Automotive. In the short term, he expects an
increase in selling prices for new Hondas. Once the supply disruption is over,
he thinks Honda will be able to catch up with its production goals by adding
shifts, as demand warrants.
"It could be a wash," he said.
Honda has about 13,500 employees in Ohio -- at assembly plants in
Marysville and East Liberty, an engine plant in Anna, a transmission plant in
Russells Point and administrative offices. In addition, the company is served
by more than 150 parts suppliers in Ohio who have more than 40,000 employees.
All of those locations and employees are affected by the cutbacks, which
stem from an interruption of the supply of parts from Japan.
More than 80 percent of the Honda vehicles sold in the United States are
produced in this country, and more than 80percent of the parts come from North
American sources. While only a small share of parts come from Japan, it only
takes one missing part to shut down an assembly line.
