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Honda to UK Part Sources: Lower Prices or Else!

6 June 2000

    London - On Monday, Honda warned its UK component suppliers that it will 
shift sourcing to other European areas if prices are not reduced by up to 30%.

    Minoru Harada, President of Honda Motor Europe, blamed Honda's European 
losses, on the strength of the British pound, versus the weak Euro dollar. 
The company aims to cut its $780 million per year components bill by 20%.  
Speaking at a press conference in London, Mr. Harada said: "We need to source 
more components from Europe because of the strength of the pound.  It would 
certainly be easier to do business if the UK signed up to the Euro." 

    Currently Honda divides it's European sourcing 75/25 in favor of the UK.  
He would like to split to be more equally divided between the UK and 
Continental Europe.  The comments aroused fears of possible heavy UK job 
losses.  However, Honda said that it remained committed to Britain and 
confirmed that its second Swindon plant is on schedule to open in September 
2001. 


MJR