Honda Is Cutting Back on Accord Production
Reflecting the toll the Gulf War and the sluggish U.S. economy are taking on the auto industry, Honda Motor Co. said Tuesday it is cutting back production of its top-selling Accord model.
It marks the first time Honda has had to reduce production at its Marysville, Ohio, assembly plant, which builds about two-thirds of the compact Accords sold in this country.
The company said it would cut first-quarter production a total of about 3%, or 25,000 cars, that would have been built at the Marysville plant and factories in Sayama and Suzuka, Japan, which also produce for the U.S. market.
The company said it expects the U.S. market, which saw an overall 5% sales decline last year, to remain in a slump this quarter. Accord sales totaled 417,179 in 1990, making it the best-selling car in the United States for the second year in a row. But sales deteriorated toward the end of the year, slipping 29% in December.
Separately, union leaders said Chrysler Corp. was slashing production of its popular minivans--another first--due to weak sales. Chrysler wouldn’t confirm or deny the report.
The falloff in sales of such popular models as the Accord and the Plymouth Voyager and Dodge Caravan minivans underscores the severity of the auto sales slump that began when Iraq invaded Kuwait on Aug. 2 and has deepened after the outbreak of war on Jan. 16.
“The reductions in production are due to the projected weakening of the automobile market in the U.S., caused primarily by economic factors including war in the Persian Gulf,” Honda said from its Tokyo headquarters.
None of Honda’s U.S. workers will be laid off by the reductions. Honda spokesman Jeff Leestma said the Marysville plant had been running at 103% of capacity for the past three years. The cuts will reduce Marysville production by 50 cars a day, from 1,550.
Automotive News, a trade publication, said this week that Honda dealers are beginning to cut back on their orders.
Tim Andrade, new-car sales manager at Foreman Honda in Los Angeles, said sales have been sluggish since the start of the Gulf War.
“We had a four-day period over the 14th, 15th, 16th and 17th where we went without selling a single car,” Andrade said.
Afflicted with even worse sales trouble than Honda, the Big Three U.S. auto firms temporarily laid off about 33,000 auto workers this week and shut down 15 U.S. and Canadian car and truck assembly plants.
The Canadian Autoworkers Union said Chrysler plans to shut down its Windsor, Ontario, minivan assembly plant for the week of Feb. 18 because of slow sales. Chrysler minivan sales tumbled 21% in December due to increased competition and the soft market.
“This is a real surprise,” said Ken Lewenza, vice president of the union’s Local 444. “We were used to a six-day operation during the whole of 1990 and we expected to continue. We just didn’t think this would happen--our sales dropped really quickly.”
If the Windsor plant closes, it will be the first sales-related cutback since the minivans went into production nearly seven years ago. The company also builds minivans in St. Louis, Mo.
