October 14, 2008

State of Alabama
Press Release: Alabama Department of Commerce

Honda To Move Production Of V-6 Accord Sedans To Alabama

 
By Dawn Kent-The Birmingham News

The Honda Accord V-6 sedan will join Alabama's auto assembly lineup next year as part of the Japanese automaker's latest plan to keep its factories humming during an industrywide sales slump.

Honda on Monday announced the move, which will mark the first time the Lincoln plant has produced passenger cars. Production of the V-6 Accord will shift from a Honda plant in Ohio to Alabama by mid-2009, allowing the Ohio plant to produce more of the 4-cylinder Accord.

Also on Monday, Honda said it would suspend production in Lincoln on Fridays during November and during the week of Thanksgiving in response to sluggish demand for the Odyssey minivan and Pilot sport utility built there.

But the plant's 4,500 employees were in a celebratory mood because of the Accord news, which is a stabilizing factor for Honda's Alabama operations and will require a $60 million investment in additional tooling.

"There was a lot of applause," said Mike Oatridge, the Lincoln plant's vice president for business operations. "People have been watching the news and watching the stock market fall. We know that the market is not good, that these economic conditions in North America are very, very unstable. This announcement really showed even further confidence in the Alabama plant and the Alabama work force."

In its latest sales report, Honda said it has sold 313,228 Accords so far this year. While the vehicle's September U.S. sales dipped 36 percent from the year-ago period in what was a terrible month for the overall industry, year-to-date sales are about 4 percent ahead of last year.

The V-6 Accord, however, is not as popular as the 4-cylinder version of the vehicle. Of the total Accords sold so far this year, about 70,000 of them were V-6 sedans.

Still, Honda employees were elated by the news, said Tracy Shaddix and Hank Kuykendall, who both work in frame assembly on Line 1 at the Lincoln plant.

"Almost daily, you pick up the paper or watch TV, and other automakers are shutting down plants," Shaddix said. "This boosts our morale. We just had the Ridgeline announcement and back to back, here comes the Accord, one of the best-selling vehicles there is."

Earlier this year, Honda said it would shift production of its Ridgeline pickup from a plant in Canada to Alabama early next year. The move will free up space to build more of the hot-selling Civic sedan in Canada and keep workers busy amid the slower-selling vehicles in Lincoln. The Accord move is expected to have the same effect.

Both moves are an example of Honda's flexible manufacturing systems, which allow the automaker to respond quickly to changing consumer preferences. Such flexibility is especially useful in the current market, where consumers are fleeing trucks and sport utilities for smaller, fuel-efficient cars.

And while Honda is doing better than many automakers, it has not been immune to the sales slump. Last summer, the Lincoln plant said it was trimming output of Odysseys and Pilots by 10,000 vehicles.

Another Alabama automaker, Mercedes-Benz, is trimming output at its assembly plant in Vance, as recent months have seen a spate of bad news for the state's once-booming auto industry. Monday's announcement about the Accord moving in provided a sorely-needed boost for that sector.

"In this very volatile economy, this move by Honda stabilizes its Alabama work force," said Alabama Development Office Director Neal Wade. "It also says a lot about the work force in Alabama and what that plant has been able to do in terms of productivity. It certainly has caught Honda's attention that this is a good place to consolidate four of their production lines."

Industry watchers had expected Honda to add another vehicle in Lincoln, but that speculation was focused on the Acura MDX sport utility, now built in Canada. The Accord was a surprise.

Next month's production cutbacks in Lincoln will trim output by about 8,000 vehicles and are a direct response to the slow market, Oatridge said. The plant also plans to trim output by an additional 14,000 in February and March, but that will happen because the lines will be shut down to add new tooling to accommodate the Accord.

During the down time, employees will have the option of taking vacation days, coming to work to perform non-production duties or taking time off with no pay and no penalty. In February and March, however, some employees will be required to report to work to help with the tooling installation.



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