Honda Puts Its U.S. Workers on Leave

Honda Motor Co had furloughed its workers at their plants in the United States on Tuesday. Their plants will be closed until May 1 following the rapid spread of the COVID-19 pandemic.

The Japanese automaker employs about 18,400 workers at plants in Alabama, Indiana and Ohio.

The company has put up to 10,000 of its U.S. workers on leave. This followed as COVID-19 slams into the auto industry, hitting stock markets and roiling the economy.

Teruhiko Tatebe, a Honda spokesman said, laid-off workers, won’t receive salaries from April 13 to May 1.  This makes them eligible to get unemployment benefits from local authorities.

Honda has suspended operations on March 23 but guaranteed salaries through Sunday. Also, the company will instruct the workers to apply for unemployment benefits from their local governments on Monday. These layoffs will add to the soaring unemployment numbers in the United States.

Moreover, operations at its Powersports plant in South Carolina which makes all-terrain vehicles or ATVs have been suspended since March 26.

The Japanese automaker has built 1.2 million cars in the country in 2019.

Honda Stocks Dived as Demand for Cars Plummeted

Demand for cars in the U.S. has plummeted amid the rising concerns on the virus including economic damage.

The United States is the world’s second-largest car market however some states have barred car dealers from selling new cars. Following the “stay at home” orders, automakers have faced a drop in sales. Honda’s sales in the U.S. tumbled 48% last month as well as dropped in stock trading sessions.

Last week, Nissan Motor Co said it would extend its production suspension within the U.S. up to late April. Toyota Motor Corp has also suspended its U.S. and Canadian production through April 17.

Honda is the latest automaker to make adjustments on their workforce. Nikkei reported earlier it is planning to furlough about 10,000 U.S. workers.

HMC fell into the red zone at the end of the last week, into a negative trend and dropping by -13.99. With this latest performance, HMC shares plunged by -22.96% in over the last four-week period. In addition, it sank by -22.81% over the last 6 months.  It also had a drop of -30.17% in the past year of trading. The company is -29.85% lower this YTD.