Thursday, June 4, 2009

Buy American. Buy a Honda?

Honda released it's latest car sales figures. The total car sales for May-09 were down by 48.9 percent from May-08. The US car sales were down 39.2 percent driven to some extent by much lower fuel prices from previous year (see chart).

Change in retail gasoline prices since May-08

These lower gasoline prices reduced demand for fuel efficient cars (this is a sad development because fuel prices will continue to rise). Combined with the current recession this resulted in a painful drop in sales for Honda.

So now we should expect to see massive layoffs, right? In fact layoffs at Honda have been insignificant, particularly in the US (mostly temp workers). Well that must be because they produce cars, boats, and lawnmowers in Japan with subsidized labor and ship them to the US, right? Wrong again. Here is the list of where Honda products sold in the US are made:
Honda of America Mfg. (HAM) Marysville Auto Plant - Marysville, OH
Accord Sedan
Accord Coupe
Acura TL
Acura RDX

Honda of America Mfg. (HAM) East Liberty Auto Plant - East Liberty, OH

Honda of America Mfg. (HAM) Anna Engine Plant - Anna, OH
4-cylinder engines for Accord, Civic, Element and Acura RDX
V-6 engines for Accord, Ridgeline, Acura TL and MDX
Brake components
Drive shafts

Honda Manufacturing of Alabama (HMA) - Lincoln, Ala.
V-6 engines

Honda Manufacturing of Indiana (HMIN) - Greensburg, Ind.
Civic Sedan
Civic GX

Honda Power Equipment Mfg. (HPE) - Swepsonville, N.C.
GC and GCV general purpose engines
Walk-behind lawn mowers
Snow blowers
String trimmers
Water pumps

Honda of South Carolina Mfg. (HSC) - Timmonsville, S.C.
FourTrax all-terrain vehicles (ATVs)
AquaTrax personal watercraft (PWC)

Honda Transmission Mfg. (HTM) - Russells Point, OH
Automatic transmissions
High precision gears
Four-wheel drive systems

Honda Precision Parts of Georgia (HPPG) - Tallapoosa, Ga.
Automatic transmissions

And yes, some manufacturing abroad:

Honda of Canada Manufacturing (HCM) - Alliston, Ontario
Civic Sedan
Civic Coupe
Civic Si
Acura MDX
Acura CSX (Canada market only)

Honda de Mexico (HDM) - El Salto, Estado de Jalisco
Automobile parts
Big Red multi-purpose vehicle (MUV)
Apparently GM and Chrysler have been manufacturing more parts and products abroad for sale in the US than Honda has. Hmmm. Looks like we rescued the wrong auto companies. But wait, Honda NA doesn't need to be rescued.

That means you can run a successful US car manufacturer using mostly US labor, keep it profitable, employ lots of people across the country, make fuel efficient cars, avoid major layoffs even in the worst of times, and no government rescue is required? What a novel idea.

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