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Fri, May 30, 2008 - Page 10 News List

Honda moves big models to US plants

LESS IS MOREAs Americans opt for fuel-efficient cars, Japanese makers are outshining their US rivals because of their reputation for offerings that guzzle less gas

AP , TOKYO

Honda will meet growing US demand for small cars while maintaining North American jobs by moving production of two bigger models from Canada to Alabama, chief executive Takeo Fukui said yesterday.

Honda Motor Co’s Pilot sport utility vehicle and Ridgeline pickup, now rolling off its plant in Ontario, Canada, will be produced in Alabama, allowing the production of the Civic sedan to be raised in Canada, he said.

“Gas prices continue to rise and the demand for cars with good mileage is growing,” Fukui told reporters at a Tokyo hotel. “Efforts are under way to increase the local production of the Civic.”

Even the usually booming Japanese automakers are sensing the pinch from a US economic slowdown and soaring material costs, including steel. But the Japanese are holding up better than their US rivals because of their reputation for fuel-efficient offerings.

General Motors’ top managers are working on additional restructuring measures to deal with a declining US auto market and an accelerated shift from trucks to more fuel efficient vehicles, a person familiar with the plan said on Wednesday.

Such a move would come on top of thousands of job cuts at GM over the past three years, mainly through buyout and early retirement offers.

Ford said earlier this week that it is planning layoffs of salaried employees by August as part of a restructuring in the face of slumping sales and record-high gas prices.

Honda’s production changes won’t create — or cut — any jobs in North America. But Fukui noted it would maintain sales momentum.

“And the point is we won’t have to reduce employment,” he said.

Honda will create US jobs when its plant to build Civics opens in Indiana later this year. That plant is expected to add about 2,000 jobs.

Fukui said Honda’s Fit subcompact is also emerging as a hit in the US.

Still, overall US auto sales are expected to drop to around 15 million vehicles this year — down from 17 million as recently as 2005.

For last month, General Motors, Ford and Chrysler all saw double-digit US sales declines compared to a year earlier. But Honda, along with Nissan Motor Co and Toyota Motor Corp, reported year-on-year gains.

Relatively new auto plants are flexible in production, allowing models to be switched to respond to shifts in demand. At some plants, the same assembly line can produce different models, one after the other.

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