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Economy

US port dispute forces Honda, Toyota to cut production

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Cargo clogs a U.S. West Coast dock.   © Reuters

NEW YORK -- A labor dispute at ports on the West Coast drags on, with cargo piling up on docks and stymying a big chunk of America's maritime trade. And the fallout is now rippling to Japanese automakers that operate in the U.S.

     Delays on the docks are disrupting Honda Motor's supply chain for Japanese-made transmissions and electronic parts. Local inventories of these components are shrinking.

     The automaker on Monday started easing back production of the midsize Accord and compact Civic for a week at three assembly plants in the U.S. and Canada amid delays in receiving needed autoparts shipments. With some production lines completely shut down, the plants are operating at lower rates.

     Weekly output will be trimmed by some 20,000 automobiles. The company will decide within the week whether some measures will remain in place next week and beyond. Honda built a total of 1.66 million vehicles in the two countries last year.

     Toyota Motor, too, has taken similar steps. Output has been scaled back and overtime suspended. "Depending on the inventory of components, we will adjust production," says a company official.

     Fuji Heavy Industries has decided to avoid the clogged docks altogether. The manufacturer of Subaru cars has taken to the skies, flying in Japanese-made transmissions and other parts. The company is chartering four or so aircraft daily, at a cost of as much as 7 billion yen ($58.6 million) a month.

     Roughly 40% of U.S. imports come through ports on the West Coast. Dockworkers and the group representing 29 ports have been engaged in prolonged contract talks, with workers accused of engaging in slowdowns.

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