Production Suspension Extended and New Federal Legislation ... - Honda

Production Suspension Extended and New Federal Legislation Provides Additional Resources for Associates

The COVID-19 pandemic has caused a steep decline in sales of our auto products. March auto sales dropped nearly 50 percent, even after a strong start to the month, and April auto sales are predicted to be much worse. Our powersports sales have also been affected; however, power equipment sales are only slightly reduced. Since we cannot produce what cannot be sold, we must continue our production suspensions as follows:

Auto, engine and transmission production is now suspended through May 1. Powersports (HSC) production is now also suspended through May 1. As a temporary measure, beginning on April 13, we will designate all non-production days as

No Work Available for non-exempt associates in these production facilities. All contingent associates should check with their respective agencies for treatment information. At this time, exempt associates will continue to perform their work, as previously communicated.

The sales decline has caused severe financial stress on our company. As a result, we must take emergency measures to manage costs as well as the cash flow needed to sustain our business operations.

We are taking these actions knowing that there are now emergency resources available to help associates. Recently, the federal government enacted the Coronavirus Aid, Relief, & Economic Security Act (CARES). This far-reaching legislation is designed to protect both workers and companies during the pandemic. There are three areas of the CARES Act that directly impact our company and our associates.

Income Replacement

Situation: The CARES Act contains two important items that address loss of income due to COVID-19related impacts:

One-Time Direct Payment. In the second half of April, the federal government will make direct payments of up to $1,200 per adult and $500 per child to qualified taxpayers. Therefore, a qualifying family of four could receive a payment of $3,400.

New Weekly Benefit. A new federal unemployment benefit of $600/week is available to workers who are (a) affected by a suspension or slowdown in business or (b) unable to work due to a direct impact of COVID-19 as an individual, which includes being quarantined, caring for a family member, closure of child's school or daycare, or inability to travel due to an emergency order.

Honda's Response: The new CARES Act benefit of $600/week, added to state unemployment benefits, will provide associates with substantial income replacement during any temporary production suspension, or suspension or reduction of other work. At the same time, it will provide Honda with much-needed cash flow relief during this time of greatly reduced sales.

Designating all non-production days as No Work Available beginning April 13 allows non-exempt production associates to access the new weekly federal benefit. In addition, non-production associates that have a reduction of work or a COVID-related reason that prevents them from returning to work may also be eligible to access this new weekly federal benefit following the expiration of any company leave benefits.

We realize that using the state unemployment infrastructure is new to many associates, so we have a team that is ready to support you in this process. Importantly, it will not change your standing as Honda associates. You will continue to receive Honda benefits.

To apply for this income replacement benefit, click here to find information for your state and the process to follow.

Healthcare

Situation: The pandemic is severely straining the health care system. Individuals are postponing preventative visits and elective procedures, both because of service availability and concern for contracting COVID-19.

Honda's Response: We are encouraging the use of our existing Teladoc program by waiving copayments for these services. These telecommunication doctor services may be very helpful during this time to reduce exposure to COVID-19 and help relieve a strained healthcare system.

Other CARES Act additions to Honda's healthcare plan are explained by clicking here.

401(k) Plans

Situation: The CARES Act allows for relaxed hardship withdrawals, loans and tax payments for "coronavirus-related" reasons.

Honda's Response: Honda's 401(k) Savings Plan has been amended in accordance with the CARES Act.

CARES Act impacts to the Honda 401(k) plan are explained by clicking here.

While it is each associate's responsibility to file a claim with your state, Honda is prepared to support your Honda-specific questions. We have a team of Honda associates ready to help. For Honda-specific information, call the new HR Hotline at 877-809-0051 or email HRHotline@hna.. Click here for additional FAQs.

Like all of you, we look forward to the days when our personal lives and our business can begin to return to normal. Clearly, that will take longer than expected but, together, we will overcome this challenge and get back to building products that bring our customers joy.

Shinji Aoyama Chief Officer of North America Region

Rick Schostek Executive Vice President & N.A. Risk Management Officer

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