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Thursday, August 11, 2011
When Marsha Price's bosses at the Honda plant here announced plans to slow production in March, she was not worried.
"We've had downtime before and we've seen how flexible Honda is and how they flexed right back," she said.
Since March, the American Honda Company has experienced drops in sales from lack of inventory because plants like Honda Manufacturing of Alabama in Lincoln have had fewer parts from the tsunami- and earthquake-stricken Japan.
But now that suppliers in Japan have recovered from the March disaster, plants in the United States are all ramping up to full capacity again — and employees in Lincoln are ready and optimistic about the future.
"I think the associates are glad things are ramping back up," said Teresa Heath, employee at Honda Manufacturing. "I think everyone is ready to get back in the groove."
According to the July American Honda sales report, the company's sales dropped approximately 25 percent compared to the same month last year. The company posted similar double-digit drops in April, May and June.
Company officials have consistently pointed to a lack of inventory as the reason behind the drops in sales. However, with production increases this month, officials are now predicting a turnaround in sales numbers.
"We look forward to improved inventory levels in the coming months as most of our North American facilities begin to return to full production in August," John Mendel, American Honda executive vice president of sales, said in a press release.
Mark Morrison, spokesman for the Lincoln Honda plant, said Wednesday the plant would be back at 100 percent capacity by Monday after operating at 50 percent for the last few months. He added that Honda Manufacturing would actually be producing more vehicles per day next week than it did before the Japan disaster due to a $191 million investment by the company earlier this year to increase production at the plant. The investment, which created 40 jobs, was necessary in part so the plant could receive upgrades to add the Acura MDX in 2012 to the manufacturing line.
The $1.5 billion plant currently produces the Odyssey minivan, the Ridgeline pickup and the Pilot SUV.
Jeff Lanier of Birmingham, who mainly works in frame assembly at the Lincoln plant, said he, too, was not worried when Honda started cutting back on work hours. By May, plant production had been cut to just three days a week.
"Back when the recession hit in 2008, Honda took care of us," he said. "I had heard Honda never had a layoff."
Employing 4,000 people, Honda Manufacturing was committed to preventing layoffs, Morrison said. Instead of cutting jobs during the recent slowdown, Honda instead allowed employees to take vacation time or found other work for them to do, including assisting with cleanup efforts after the April tornado.
Natalie Howard of Anniston, who has assembled engines at Honda for nine years, decided to take some time off during parts of the slowdown. And like her fellow employees, she was not worried that her job might be in danger.
"I knew we were coming back and when we did, we would come back strong . so I took time off to relax," she said with a laugh. "Now I'm ready."
Honda plants across the country will be operating at full capacity within weeks, but, in the view of Dennis Virag, president of the Automotive Consulting Group, the increased inventory might not be enough to get the company out of its sales slump this year.
"With the current state of the economy, it will be more of a challenge for them than it was several months ago," Virag said. "With the credit debate and the way the stock market is now, it is a turbulent period ahead and with turbulence comes restraint on the part of consumers."
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