Thailand Floods Disrupt Honda's North America Production

Starting Wednesday, the company will cut its vehicle production by 50% at all six of its plants in Canada and the United States for at least one week.

Honda will slash production at its North America plants by 50% starting Wednesday as suppliers in flood-ravaged Thailand are unable to deliver parts.

"A number of Honda suppliers in Asia currently are unable to maintain parts production, which is disrupting the flow of parts to our production operations in North America," the company said Monday.

Most of the parts for Honda and Acura vehicles are sourced from North American suppliers, but "a few critical electronic parts" come from Thailand, the automaker said.

Starting Wednesday, the company will cut its vehicle production in half at all six of its plants in Canada and the United States for at least one week.

"It is anticipated that this situation will require adjustments for the next several weeks," said Honda spokesman Ed Miller.

"Subsequent adjustments will be announced as they are determined based on the parts supply situation," he added.

The release of the 2012 Honda CR-V could potentially be delayed by several weeks, the company said.

No layoffs are planned at any of Honda's North American facilities as a result of the disruption, the company added.
The Honda Civic is one of the best-selling cars in Canada and the United States.

Honda, like other automakers, already was struggling to crawl back from the devastating earthquake and tsunami that struck Japan in March and caused extensive damage to its industrial base.

Earlier on Monday, Honda said net profit for the fiscal first half plunged 77.4% year-on-year, as it grappled with the impact of the earthquake and a strong yen.

The automaker also held off giving an earnings forecast for the year ending March 2012 as it continued to assess the impact on its operations of Thailand's worst flooding in decades.

Toyota also has announced it will scale back production because of the Thailand flooding, including temporarily cancelling overtime and Saturday production.

Unusually heavy monsoon rains have flooded large swathes of northern and central Thailand over the last three months, leaving at least 381 people dead and damaging millions of homes and livelihoods.

Copyright Agence France-Presse, 2011

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