Honda, Nissan to stop paying furloughed workers at US plants

Shiho Takezawa and Chester Dawson

Honda Motor Co. and Nissan Motor Co. will temporarily stop paying workers laid off from their idled U.S. plants as the coronavirus stifles demand for cars and trucks.

The two Japanese companies on Tuesday joined unionized Detroit peers in urging furloughed workers to apply for unemployment benefits from state governments. After shutting down their non-union manufacturing operations last month, Honda initially continued to pay workers their full wages while Nissan provided about 80%.

Nissan is laying off about 10,000 workers while Honda will stop paying roughly 14,400 U.S. employees through May 1.

It isn’t clear how much of a cut from their regular pay Honda and Nissan workers will see. Unionized employees of General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV receive state unemployment and supplemental benefits that make up about 75% of their pay, based on collective-bargaining agreements.

Furloughed workers at all 10 of Honda’s U.S. factories won’t receive wages from April 13 to May 1, making them eligible to get unemployment benefits from local authorities, said Teruhiko Tatebe, a Honda spokesman. The company has suspended output at its car and truck plants in Alabama, Indiana and Ohio since March 23.

The company, whose U.S. furlough plans were first reported by Japan’s Nikkei newspaper, declined to specify how many workers are affected by the production shutdown.

State Unemployment

Nissan is temporarily laying off about 10,000 workers at its auto-parts and vehicle-assembly plants in Mississippi and Tennessee, and asking them to apply for state unemployment until the facilities re-open in late April, company spokesman Lloryn Love-Carter said in an email. Nissan plans to restart vehicle assembly plants on April 27, she said.

Toyota Motor Corp. has continued to pay full wages to workers at its idled U.S. plants, but a spokesman said the company did require them either to take paid vacation or forfeit pay for one week in mid-April.

Millions of Americans are expected to file for unemployment for a third straight week when figures are released on Thursday, according to the median of estimates compiled by Bloomberg.