May 11, 1999
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| May 11, 1999 | atimes.com | |
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| Japan Economy Honda to invest 36 billion yen in efficiency drive By Kae Inoue Bloomberg News Tokyo - Honda Motor Co., Japan's third-largest automaker, said it will invest 36 billion yen ($300million) over three years in its two biggest factories in Japan as part of a global plan to boost productivity. The announcement came a day after Honda said it will spend $460 million in North America. That includes $400 million to build a minivan and sports utility vehicle factory in Alabama, $30 million to upgrade its Ohio engine plant and $30 million to increase output at its plant in Ontario, Canada. The maker of Accord and Civic sedans said it will shut oneof three lines at its Suzuka factory in Mie prefecture, westernJapan, by March 31, 2002, and will upgrade the Suzuka factory andthe Sayama factory in Saitama prefecture, bordering Tokyo. While Honda expects to post record earnings for the year ended March31, in part from selling more profitable cars in the U.S., saleshave fallen in Japan. ''Our goal is to create a more efficient and flexiblecorporate structure,'' President Hiroyuki Yoshino said at a pressconference. ''These new mid-term plans in Japan and the Americaswill lead to new manufacturing systems throughout our global operations." Honda expects to reduce energy consumption by 15 percent atthe Suzuka and Sayama plants by March 2002, while maintainingoutput capacity. Yoshino didn't say how much money the automaker expects tosave as a result of the changes. ''It's difficult to answerbecause how much we can save will depend on which models and howmany of them we make." Honda aims to make the four lines at Suzuka and Sayamaflexible enough to be able to make most of the carmaker's models. Honda currently makes nine models at the Suzuka plant,including the Integra and Civic sedans and the Stepwagon minivan.At Sayama it produces the Odyssey minivan, Prelude coupe andLegend luxury car, among others. The company has two other plantsin Japan. Honda will reduce the number of shifts at the Suzuka plantto eight from nine, moving affected employees to other duties. Ashift normally includes 700 workers, said Honda spokesman Takeo Okusa. Honda's domestic sales plunged 23.4 percent last month, thebiggest sales drop in Japan among the nation's five majorcarmakers, the Japan Automobile Dealers Association said. That compares with a combined 11 percent decline from Aprillast year for Japan's 11 automakers, as concern over the weakeconomy kept buyers out of showrooms, JAMA said. A combination of weak sales in Japan, trade friction and thestronger yen have prompted Japan's four largest automakers -Toyota Motor Corp., Nissan Motor Co., Honda and Mitsubishi MotorsCorp. - to build more assembly plants overseas in recent years. Honda said yesterday it will spend $400 million to build aminivan and sport-utility vehicle factory in Alabama - its fifthproduction facility in North America. The automaker will build the light trucks and engines inLincoln, about 40 miles east of Birmingham, starting in 2002,employing about 1,500 workers. Honda will build its Odyssey minivan at the plant but wasless specific about plans for a sport utility. While there are nocurrent plans for an Acura luxury model in Alabama, ''I can't saythat wouldn't change,'' said Thomas Elliott, executive vicepresident of Honda's U.S. business. The automaker will spend $30 million at its Ohio plant toincrease engine output to 1.01 million units a year from 900,000units by spring of 2001. It will spend another $30 million at its plant in Alliston,Ontario, to boost auto output to 330,000 vehicles a year from290,000 vehicles by spring of 2001. The Canadian plant will alsostart making SUVs (sport utility vehicles) with 40,000 units ayear at some point over the next three years, Yoshino said.''We predict demand for light trucks will continue to grow in North America,'' said Yoshino. Honda's share of the light truck market is about three percent,while its share of passenger vehicles is about nine percent in NorthAmerica, he said. Honda's U.S. sales rose 7.4 percent to 1.01 million1999 from the year-earlier period. Honda will maintain its production capacity in Japan at 1.25million units and plans to export 250,000 vehicles a year for thenext three years. | |||||||||
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