Japan disaster forces Honda Cars to halve PHL operations

Honda Cars Philippines Inc. (HCPI) on Monday bared plans to cut its assembly operations by half starting this month with the shortage of parts and components from Japan affecting its Philippine factory. “Honda will closely monitor the situation and strive to resume normal production operations [at] the soonest [possible time]," the Philippine subsidiary of Japan’s second largest automaker said in a statement. Vehicle assemblers expect the effects of the earthquake- and tsunami-triggered disaster in Japan to hit them, as the devastation has halted the operations of Japanese manufacturers of vehicles and spare parts. A number of vehicle assemblers in the Philippines source their spare parts from Japan. A trade official thus suggested last week that vehicle assemblers source more car parts from the Philippines. "Most of our Japan-based suppliers are making progress to restart production, and many either have or are ready to resume parts production. However, there are a few suppliers that have yet to resolve the challenge to resume their production," the company said. "In those cases, Honda is working with its suppliers to help re-establish their operations, while evaluating other possible sources for those parts in the supply chain. Please understand that Honda is making every effort to work toward a full recovery as quickly as possible," Honda Cars said. Ford wants reforms US automaker Ford Motor Co., on the other hand, is urging the Philippines to put in place stable policies and lower the cost of doing business in the country, or lose its position as a regional hub for vehicle assembly. Randy Krieger, president of the US subsidiary, Ford Group Philippines, raised those issues at a press conference over the weekend, while making it clear the company has no plans of ceasing operations in the country. Ford Philippines exports its Escape and Focus models to other subsidiaries in Indonesia, Malaysia, and Thailand. It also exports Mazda3 to Thailand. However, the company said it will move the production of its next-generation Focus to Thailand. "Production cost in the Philippines is significantly higher than in Thailand because of a smaller domestic sales base, high power costs, and limited availability of auto parts. With free trade within ASEAN, it’s difficult to export from the Philippines," Krieger said. — With Paterno Esmaquel II/VS, GMA News