Honda Motor Co. said Thursday it will further cut vehicle production in North America as it adjusts to plunging automobile demand.

Tokyo-based Honda is reducing production by another 119,000 vehicles for its fiscal year ending March 31, bringing expected production for the fiscal year to 1.3 million units.

Honda spokesman Ed Miller said the cuts will take place at five of Honda's seven plants in the U.S. and Canada. Employees at the plants will be given other tasks or can take paid or unpaid vacation time, he said. No layoffs will result from the cuts, he said.

Another Honda spokesman, Ron Lietzke, said production will be scaled back at the company's engine plant in Anna, Ohio, and its transmission plant in Russells Point, Ohio.

Honda, the second-largest Japanese automaker, has been hurt by the global auto industry downturn, a product of slowing economic growth and tight credit markets around the world. Earlier this month, the automaker said its U.S. sales fell 32 percent in November and 5 percent for the first 11 months of the year.

The company's latest production cuts come on top of previous reductions of 56,000 vehicles for North America announced earlier in the fiscal year. Last month, Honda said it was cutting production in Japan and Europe by 61,000 vehicles.

Miller said production will be cut by 18,000 vehicles at Honda's plant in Lincoln, Ala.; by 58,000 vehicles at its plants in Marysville and East Liberty, Ohio; by 37,000 vehicles at its operations in Alliston, Canada; and by 6,000 vehicles at its recently opened plant in Greensburg, Ind.

Lietzke said the cuts at the Ohio auto plants would be completed by March.

U.S.-traded shares of Honda fell $1.68, or 7.3 percent, to $21.32 in morning trading amid uncertainty over the fate of a federal rescue of the U.S. auto industry. The Senate failed to pass a proposed bailout package Thursday.

Exxon's Production Falls as Profits Soar

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By Steve LeVine

ExxonMobil's (XOM) third-quarter earnings demonstrate the mixed universe occupied by Big Oil as a whole today—the company reported record profits but its lowest production volume in almost a decade. The Irving (Tex.)-based corporation says it earned $14.8 billion in the third quarter, an increase of 58% from the same period last year. Exxon is on track for a third straight year of record earnings—in both 2006 and 2007, the company earned some $40 billion. In each year, that was the most ever for any company on the planet.

Despite the breathtaking profit, however, the report weighed on Exxon's share price on Oct. 30. Exxon closed up 0.5%, at 75.05, after falling as low as 71.44 during the trading session. One of the main reasons was its reported production volume. The company produced just 3.6 million barrels of oil per day, an 8% drop from the same period last year. It's the lowest production since Exxon bought Mobil in 1999. Since then, Exxon's production has mostly fluctuated between 3.8 million and about 4.2 million barrels a day.

Some of the third-quarter drop was attributable to seasonal hurricanes, maintenance outages at Exxon facilities, and production-sharing contracts that reduce volume it receives when oil prices rise, but that accounted for just three percentage points of the 8% decline. The other 5% was independent of special factors. In prior quarters, the company has noted that it has considerable production increases coming online in the next two years. But the decrease seemed to worry Wall Street, nonetheless.

Stroking Investors

In an unusual statement in the earnings report, Exxon Chairman Rex Tillerson sought to calm any worries about the company's strength amid the global financial meltdown and reassure investors that the company's capital spending plans remain intact. Some smaller energy companies have trimmed capital spending as oil prices have plummeted from a high of about $147 a barrel during the summer to less than $70 a barrel now.

"Despite the continuing uncertainty in world financial markets, ExxonMobil has maintained a strong financial position," Tillerson said. "We plan to continue our disciplined capital investments with our full-year capital and exploration expenditures projected to be about $25 billion, consistent with previous guidance."

Revenue for the quarter was $13.7 billion, 34% higher than the same period last year. The company earned $2.59 a share excluding special items, or 20¢ higher than the $2.39 expected by analysts.