U.S. West Coast port dispute costing Honda 25,000 vehicles

Sat Feb 21, 2015 2:01pm EST
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WASHINGTON Feb 21 (Reuters) - Honda Motor Co on Saturday praised an agreement to end a labor dispute at U.S. West Coast ports but said shipping delays will cost the company about 25,000 vehicles this month.

Shipping companies and the International Longshore and Warehouse Union reached a tentative deal on Friday after nine months of negotiations. Union ratification of the agreement will end a dispute that has affected trade between Asia and 29 U.S. West Coast ports.

Honda had been using air shipments from Japan to get some parts to its North American assembly lines and company spokesman Mark Morrison said it would continue doing so while port operations are ramped back up.

"We are pleased to hear the news that a tentative agreement has been reached and are hopeful the ports will resume normal operations soon," Morrison said. "Next week our auto operations in Ohio will be back to full production beginning Tuesday."

Honda factories in Indiana and Canada will be operating at lower production levels through March 2, he said.

The company had estimated its five North American plants had lost production of 20,000 vehicles between Feb. 16 and 23 and expected to lose another 5,000.

Honda said many workers at the plants affected by the parts shortages kept busy working on maintenance or other projects. Depending on how long the disruptions continue, Honda workers could choose between reporting to work for full pay, taking paid vacation time, or taking time off without pay, the company said.

Honda noted that about 80 percent of the parts used in its North American-made vehicles are produced in the region. (Writing by Bill Trott; Editing by David Holmes)