Honda and parts suppliers in Clark and Champaign counties have stalled production due to a labor dispute dragging on at shipping ports along the West Coast.
The automaker faces a parts shortage due to the labor dispute, slowing production at Honda facilities in Marysville, East Liberty and Anna, as well as in Greensburg, Ind., and Canada.
The slowdown has already had a major impact on local parts suppliers, including KTH Parts Industries in St. Paris. The company manufactures auto body frames, and its production schedule is designed to make parts just in time for Honda production. KTH is also a major employer in the region with 926 full-time employees and more than 200 temporary workers.
“It’s devastating,” said Art Liming, executive vice president and plant manager at KTH. “Anything that happens there immediately affects us.”
The slow down is a fluid situation due to the uncertainty at the West Coast ports, said Chris Abbruzzese, a Honda spokesman.
“But based on what we know now, we anticipate that each plant will need to adjust production on multiple days between Feb. 16 and Feb. 23,” Abbruzzese said.
Honda is one of the region’s largest employers, with more than 13,000 workers in Ohio, including more than 1,450 employees from Clark and Champaign counties.
Workers have been notified, and the company will assign duties for those who wish to show up for work, Abbruzzese said. Workers can also use paid vacation time or take time off without pay depending on the duration of the shortage. Most of the missing parts include electronics and some larger assemblies like transmissions.
Production at Honda’s Ohio facilities will be shut down on Feb. 23 and will run at only about 50 percent through this Friday, Abbruzzese said.
Honda’s slowdown is the result of a labor dispute between port operators at 29 West Coast ports and the International Longshore and Warehouse Union. Officials from the ILWU declined comment because a federal mediator asked both sides to refrain from discussing the case.
“The union remains focused on reaching a settlement as quickly as possible with employers,” said an ILWU statement on its website earlier this month. “Talks to resolve the few remaining issues between the Longshore Union and Pacific Maritime Association are ongoing.”
The labor dispute has stretched on since negotiations that began in mid-May, said Wade Gates, a spokesman for the Pacific Maritime Association, which represents the port operators. The sides are negotiating a single contract that covers more than 13,000 longshoremen.
The maritime association has agreed with union workers on issues like health care and pensions, but has accused dock workers of slowing work as the negotiations stretched on, Gates said. The most significant issue remaining, he said, is a dispute over how an arbitration system that is used along all of the ports should operate.
“We’re still at the table and working hard, but our primary concern has always been avoiding any disruptions at the ports.” Gates said. “When the union began their slowdowns four months ago it really began to hurt a lot of companies.”
A recent report from the National Retail Federation showed a prolonged dispute could cost the U.S. economy as much as $2.5 billion a day.
KTH hasn’t seen a similar slowdown in production since an earthquake and tsunami hammered Japan, damaging that country’s auto industry in 2011, Liming said. The slowdown at KTH is expected to last at least through this week. Workers at KTH were given the option to work or take time off.
“We’ll be facing that again most days this week because the volumes are about half,” Liming said. “Next Monday will be the same and we’ll just wait to hear whether the situation gets better or worse.”
Several other Clark County companies also provide parts to Honda, including Parker Trutec, Yamada North America Inc. and McGregor Metalworking Companies. Officials from those firms couldn’t be reached for comment Tuesday.
In the meantime, Honda has been using a combination of air cargo and special truck shipments to obtain key parts, company officials said.
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