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Honda may leave Japan

24 December 2008 08:37 (UTC +04:00)

Baku. Nijat Mustafayev â€“ APA-Economics. Japanâ€™s No.2 automaker Honda Motor Co. President Takeo Fukui warned of the yenâ€™s sharp appreciation, saying further rises by the currency would hollow out Japanâ€™s auto industry through lost jobs and a shift of manufacturing, research and other activities overseas.
According to him, the automaker would be forced to bring more production overseas if the dollar persisted below 100 yen.
To cope with the yenâ€™s surge beyond 100 to the dollar, Honda is cutting domestic production and jobs, Fukui said, and the automaker may have to shift not only production bases overseas but also other activities like research and development if the yen stays above 90.
These moves would "accelerate the hollowing out of Japan," he said. "But this is what a company should do" to survive such a situation.
Honda is cutting about 1,200 nonregular jobs at its domestic production bases by early February from around 4,500 in late November.
"If we go beyond, we would simply have to transfer more production overseas, cut more temporary workers and even start laying off permanent jobs," he said.
"If things do not change, the number (of temporary jobs) will fall to around zero," Fukui said.
Honda is projecting its global vehicle sales to fall 7 percent from a year earlier to 3.65 million units in fiscal 2008.
It had earlier planned to boost sales to over 4.5 million units in fiscal 2010. But given the current business environment, Fukui said, "The scenario has changed totally."