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Honda production is disrupted by another natural disaster

Flooding in Thailand is causing another parts shortage for the automaker, which has been recovering from a similar disruption from the Japanese earthquake and tsunami in March.

November 01, 2011|By Jerry Hirsch, Los Angeles Times
  • Cars were submerged in floodwaters at a Honda factory north of Bangkok last month. Honda will reduce the output at U.S. factories this month.
Cars were submerged in floodwaters at a Honda factory north of Bangkok last… (Christophe Archambault,…)

Just as Honda Motor Co. was recovering from a production disruption and inventory shortage caused by the Japanese earthquake, it has been hit with another natural disaster: flooding in Thailand that is causing a parts shortage.

Honda said it will slash production at its U.S. factories by half through Nov. 10 and close its factories for a day Nov. 11. It also has cut all overtime production for November.

About 87% of the Honda and Acura automobiles that the automaker sells in the U.S. are assembled here.

Most of the parts come from North American suppliers, but Honda said it also buys "a few critical electronic parts" from Thailand and other regions of the world.

Honda said it is working with suppliers in Thailand and elsewhere in its network to resume production of the parts it needs for its North American factories.

Honda said it will try to help out its U.S. factory workers by counting any "non-production days" as "no pay, no penalty" days. That means Honda employees can report to work, use a vacation day or take the day off without compensation or penalty.

Honda's U.S. sales have slid 6% to almost 860,000 vehicles so far this year. Its share of the U.S. market has slid to 9% from 10.6%. The decline was partly the result of the shortage of vehicles caused by the parts disruption from the Japanese earthquake and tsunami in March.

Meanwhile, Honda said that its net profit for its second quarter, which ended Sept. 30, fell 56% to 60.4 billion yen ($788 million). Revenue slid 16% to 1.885 trillion yen ($24.6 billion).

jerry.hirsch@latime.com

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