Coronavirus and falling demand prompt the decision to close North American plants for six days.
Due to the growing Covid-19 pandemic in North America, Honda will stop production for six days at its plants in Canada, Mexico, and the United States. The closures will start on March 23 and will run through March 31. There will be good news for the roughly 27,600 affected workers, though, because the company will pay them in full during this period.
The company's statement indicates this plan is potentially subject to change. "As the market impact of the fast-changing COVID-19 situation evolves, Honda will continue to evaluate conditions and make additional adjustments as necessary," the Honda's announcement said.
Gallery: 2019 Honda Passport: Alabama Factory
During the shutdown, Honda will also perform a deep clean of the factories to prevent the spread of the disease when workers return.
In addition to the coronavirus, Honda also cites an anticipated decline in demand as a reason for closing the factories. If people are stuck at home, buying a new car probably isn't very high on their list of priorities.
The decision to close factories and continue to pay the workers sets Honda apart among automakers with factories in the United States as the businesses react to this medical crisis. FCA, Ford, and General Motors encourage some employees to work from home, but the plants remain open. The United Auto Workers negotiated with the companies and agreed to a "rotating partial shutdown of facilities, extensive deep cleaning of facility and equipment between shifts, extended periods between shifts, and extensive plans to avoid member contact."
Statement by Honda Regarding Production Adjustments to North American Auto Plants
March 18, 2020
Honda today announced that it would adjust production at all of its automobile production plants in North America, including the U.S., Canada and Mexico, due to an anticipated decline in market demand related to the economic impact of the COVID-19 pandemic.
Honda will suspend production for six days beginning March 23, with current plans to return to production on Tuesday, March 31. Honda transmission and engine plants in North America that serve Honda auto plants also will suspend production for the same time period. Honda will reduce production by approximately 40,000 vehicles during these six days.
As the market impact of the fast-changing COVID-19 situation evolves, Honda will continue to evaluate conditions and make additional adjustments as necessary. In undertaking this production adjustment, Honda is continuing to manage its business carefully through a measured approach to sales that aligns production with market demand.
During this time, Honda will continue full pay for all of its associates. Approximately 27,600 Honda associates in North America will be affected by this temporary suspension of production. In addition, Honda will utilize this time to continue deep cleaning of its production facilities and common areas to further protect associates upon their return to the plants.
This production adjustment also will allow Honda associates to better prepare and adjust family plans in relation to regional directives to close schools to stop the spread of the COVID-19 virus. This will enable working parents to determine how best to manage the needs of children staying home from school and other required lifestyle adjustments.
The affected auto plants include:
Marysville Auto Plant
East Liberty Auto Plant
Performance Manufacturing Center
Honda Manufacturing of Indiana
Honda Manufacturing of Alabama
Honda of Canada Mfg. – Plants 1 & 2
Honda de Mexico – Celaya Auto Plant
The affected powertrain plants include:
Honda Transmission Manufacturing of America (Ohio)
Honda of America Mfg. Anna Engine Plant (Ohio)
Honda Precision Parts of Georgia (Georgia)
Honda of Canada Mfg. Engine Plant (Canada)
Honda de Mexico – Celaya Transmission Plant (Mexico)