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Honda May Ship Through Mexico

Japanese automaker says it is seeking ways to avoid parts shipment delays such as those caused by last month's shutdown of ports on the West Coast.

November 07, 2002|From Times Staff and Wire Reports

Honda Motor Co. said Wednesday that it may begin transporting some imported parts through Mexico to avoid production disruptions such as those caused by last month's shutdown of U.S. West Coast ports.

Honda, which ranks fifth in U.S. vehicle sales, also wants permission to speed U.S.-bound parts shipments so it has more inventory if a similar bottleneck occurs.

The Tokyo-based automaker, projected to make 1.22 million passenger cars and light trucks at North American plants this year, lost 25,000 units of production after shipments of minor parts such as water hose clips, bolts and screws were stuck at West Coast ports.

The company is considering steps to keep future distribution snags from closing plants, said Dan Bonawitz, Honda's vice president for corporate planning and logistics.

"We're working with [U.S.] Customs right now on fast-tracking border crossings or port entries, so we're in the early stages of that," Bonawitz said in an interview in Las Vegas.

"We also look at options like bringing more in through Mexico. We brought in one ship there this time," he said.

Honda makes 80% of the cars and trucks it sells in North America at local plants that get 95% of their parts from local suppliers.

The automaker's factories rank among North America's most efficient, in part because they rely on "just-in-time" deliveries of components and keep relatively small inventories.

Last month's 10-day lockout of West Coast dockworkers forced several automakers to charter air-cargo carriers to fly in some parts shipments and led to brief shutdowns at Honda plants in the United States and Canada; a Northern California auto plant shared by Toyota Motor Corp. and General Motors Corp.; and Mitsubishi Motors Corp.'s Illinois plant.

Honda's U.S.-traded shares fell 31 cents , or 1.7%, to $17.79 on the New York Stock Exchange. The stock has fallen 13% this year.

Torrance-based Toyota Motor Sales America, the largest import brand and fourth-biggest car company in the U.S., used ports in Mexico during the lockout for a small amount of cargo but there is "no consideration of any permanent diversion. Our backlog ... is all caught up," said spokesman Mike Michels.

Hyundai Motor America, the South Korean car importer based in Fountain Valley, is not considering use of Mexican ports, either, spokesman Mike Anson said.

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