By on March 27, 2011

As early as a week from now, Honda’s  North American production in Ohio, Alabama, Indiana, Canada and Mexico will be affected by the Japanese parts paralysis. Bloomberg talked to Natsuno Asanuma, Honda’s spokeswoman in Tokyo. She said workers will be informed once Honda has decided on a production plan.

The Columbus Dispatch reports from Ohio that “temporary interruptions” will begin there on April 4, and that Honda “does not yet know how much of its production may be halted, the duration or how the changes may affect employees.”

Honda gets more than 80 percent of its U.S. sales from vehicles made at North American plants, the highest proportion among Japan’s carmakers. This does not shelter the production from parts outages in Japan. In Japan, Honda’s supplier base is one of the hardest hit.

“This is just a beginning,” Mitsuo Shimizu, an equity analyst at Cosmo Securities Co. in Tokyo told Bloomberg. “More companies will be forced to suspend production. ” One does not need to be a sage to come to that conclusion.

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15 Comments on “Parts Paralysis: Honda U.S., Canada, And Mexico To Be Next...”


  • avatar
    Syke

    Right now, we’re chuckling at the bike shop. Last year, Honda moved Gold Wing production from Marysville, OH back to Japan. They’re now introducing the heavily refreshed 2012 Wing. Whether we’re going to get any is a whole ‘other question.

  • avatar
    Norma

    1. I don’t know what will happen tomorrow, but I think Honda says production in N. America remains normal until April 1st, therefore, it will not be affected next week. What happens next is anybody’s guess.
    2. I think it was previously reported that: “[Honda] will resume production at its motorcycle-manufacturing Kumamoto Factory on March 28.”

  • avatar

    Buy American.  Simple as that.

  • avatar
    OldandSlow

    Just because you are buying a vehicle from the Detroit 3, it doesn’t mean that all of its parts are sourced from North America.

    I remember the ruckus on some forums when GM put a Chinese engine and a Japanese transmission in their Chevrolet Equinox.
     
    http://wot.motortrend.com/gm-putting-chinese-engines-in-its-compact-suvssince-2005-247.html
     
    Ford uses Kumho tires that are made in China on their low-end F150.

    • 0 avatar

      All GM 6cylinder engine production is in Australia nowhere else. Previously that plant GMs 4cyl engines for world supply. The American car is US assembled only.

    • 0 avatar
      kevy69

      GM Canada builds V6 and V8 Engines

      http://www.gm.ca/inm/gmcanada/english/about/Overview/operations_ste_cath_Glendale.htm

      Manufacturing Facilities – St. Catharines Powertrain, Glendale Ave.
      Location:

      General Motors of Canada Limited
      570 Glendale Avenue
      St. Catharines, Ontario

      Description:

      The St. Catharines Engine Plant machines parts and assembles GM’s famous Vortec brand of engines. The plant currently assembles 4.0L, 5.3L and 5.7L V8 GEN III Engines. 3.6L and 2.8L HFV6 Engines. As well, specific engine components such as aluminum blocks, cast-iron blocks, cranks, heads, rods and cams are also manufactured.

  • avatar
    BuzzDog

    Not only is the solution more complicated than saying we should “buy American” (due to numerous Japanese parts in “American” cars), even if were that simple I’m afraid the dealers of U.S.-built vehicles would screw things up in the long-run.
     
    If – and I repeat, IF – there were an ample and ready supply of U.S.-built vehicles built without Japanese parts, here is my opinion of what would play out: Instead of using this opportunity to build long-term relationships and goodwill by selling U.S.-built vehicles to former import buyers at a fair price, past experience suggests that dealers would instead turn to price gouging, claiming that “supplies are low.” Then, when supplies of Japanese vehicles and parts stabilize, those who bought U.S.-built vehicles during the shortage will find that their trade-in value is relatively low, because the original price paid was too high, and because used vehicles will be competing with a pent-up demand for Japanese vehicles. So a possible long-time buyer of American vehicles will again be lost forever, because they “simply don’t hold their value.”
     
    Yes, it’s the simple law of supply and demand, but it illustrates how our addiction to short-term profit may be killing any hope for long-term, sustainable growth and profitability of the domestic vehicle industry.

    • 0 avatar
      geozinger

      I’m guessing you weren’t buying cars during the Voluntary Restriction Agreements era. I can remember Japanese car dealers adding things like $150 pinstriping jobs and $800 sunroofs as mandatory dealer options to their dealer stock. Back in the early 80’s, if you wanted a new Tercel (or other cars, my brother bought a Mitsubishi Colt for $800 over dealer list in 1980), that’s what it was going to take to get one.
      What makes you think that Japanese dealers won’t get out their long knives, especially when there’s BIG money to be made?

    • 0 avatar
      BuzzDog

      Oh, yes, I was buying cars back then. And you’re right, the Japanese dealers were gouging customers right and left.
       
      But there is a huge difference between the Japanese dealers of the 1980s and the domestic dealers of the 2010s: Japanese cars back then were in short supply AND of perceived higher quality; domestic vehicles in my hypothetical scenario would be in short supply, but not of perceived higher quality. In other words, buyers would choose the domestic product as a substitute – because there are limited choices. Unless these buyers are treated well, there’s little or no chance they will return. It doesn’t do our domestic industry any favors.

  • avatar
    mhadi

    No more instant gratification… upto recently (last 30 years), it was normal to wait for something if you wanted it. The Mercedes S123 had a two year waiting list in the early 1980s I believe.
    I predict those who want a Japanese or European car will not “buy American” simply because they cannot get their car tomorrow – they will learn to wait a few months.

  • avatar
    joe_thousandaire

    Bertel – I would love to see a post about that parts crisis as it applies specifically to the domestic automakers, I’ve heard only whats been in the MSM (Chevy Colorado plant shutting, Ford paint problems) but I’m really wondering if U.S. manufacturers will come out as ‘winners’ in this crisis, or if everyone loses. Any information that you or the B&B might have on specific U.S. part supply problems beyond mere speculation would be of great interest.

    • 0 avatar

      I don’t know. All I know has been written here. Whenever I find out more, it will be written here. If even the Japanese manufacturers have no clear picture, how should I? Currently, the Japanese have visibility as far as the tier 1 suppliers go. Further on, no idea. There are small machine shops in Japan that deliver a high precision part to a tier 2 supplier who supplies a tier 1 supplier. The machine shop could be at the bottom of the sea. If Japan doesn’t know how many people have died (currently, they know 10,000 for sure and 16,000 “missing”) how should they know which widget will go missing?
      Any hard and reliable information won’t be found on a free site. It would be worth my considerable weight in gold.

      All I know is that the parts paralysis will be like the flu. Indiscriminate, widespread, causing sniffles to some, death to others, will affect the frail more than the robust, could turn into a pandemic or just into a spike of sales of NyQuil.

      What is telling is that the first to get hit in the U.S. was a domestic manufacturer. Who would have thought that red and black paint becomes scarce? Prepare to be surprised.

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