Congressman Supports Chapter 11: Honda Gives "No Comment"

November 17, 2008
At a recent Honda plant dedication, U.S. Representative Mike Pence (R-Indiana) claimed he felt that Chapter 11 is preferable for the struggling Detroit Big Three. Quoted in Automotive News, Pence claimed that "reorganization in Federal bankruptcy court happens all the time. Companies utilize it all the time and come out stronger and more whole in the end." In recent days, hotly contested additional assistance to ailing domestic automakers has polarized opinions across the political spectrum.

Honda was quick to point out that it does not side with Pence: Jeffrey Smith, assistant VP for corporate affairs at Honda, said his company does support "measures that would maintain the short- and long-term viability and stability of the auto industry." Just what those measures are is uncertain, and Honda is not clarifying. Recently, Honda CEO Takeo Fukui announced his company's support of the $25 billion loan guarantees that President Bush signed into law, but it's unknown how the company feels about additional assistance or buy-in to the $700 billion financial industry assistance package.

Fukui was at the plant dedication, where he (tongue-in-cheek?) commented that "at Honda we always understand challenging times represent opportunity." The Greensberg, Indiana, plant will begin producing four-cylinder Honda Civics next month, and marks Honda's fifth manufacturing facility in North America.

Hinting at Honda's stake in the Big Three's woes, Smith commented that automotive manufacturing in the U.S. is a closely enmeshed industry, with suppliers often serving multiple brands. And if suppliers go down, Honda and other foreign makes could be left in the lurch as they scramble to find new sources of parts and pieces with which to assemble it cars. "We are all better off if we have a strong auto industry," claimed Smith.--Colin Mathews

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