Honda Extends Furloughs To Several Thousand Salaried Employees In The U.s.

This will effectively expand cost-cuting measures that initially affected only production workers.

"In addition to the impact of COVID-19 on the marketplace, stay-at-home orders in many cities and states prevent consumers in a number of markets from purchasing new vehicles. As a result, Honda must continue to suspend production in order to align product supply with a lack of market demand," the automaker said in a statement.

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The Japanese company said it is making "temporary adjustments to its production and business operations in North America" in the form of furloughs and the extension of shutdowns at plants in Mexico.

More specifically, Honda said it is extending the production suspension for its automobile, engine and transmission plants in Mexico through April 30. This decision is aligned with the already announced production suspension in the U.S. and Canada through May 1.

What’s new is that the majority of Honda’s salaried and support associates in the U.S. will be furloughed for a two-week period. This is a relatively rare solution as many carmakers preferred to cut executive salaries and lay off factory workforce instead.

According to a company spokesman who talked to Bloomberg, Honda will continue to pay for furloughed employees’ medical care and other benefits. Furthermore, they will be eligible for state unemployment benefits.

Honda employs about 31,000 people in the U.S., some 16,900 of which have already been furloughed – most of them hourly workers at auto parts and vehicle assembly plants. About three-quarters of Honda’s workforce is involved in manufacturing, with the remainder having finance, sales and research-and-development roles.

Most of the white-collar staff will be furloughed, starting with California on April 17 and other locations from April 19.