Japanese auto giants Honda and Toyota are weighing potential shutdowns of their US manufacturing facilities in response to proposed new tariffs, putting hundreds of thousands of American jobs at risk.
The two automakers, which sold over 3 million vehicles in the US last year, currently operate 18 plants across 13 states, directly employing more than 55,000 American workers. Honda runs 8 facilities with approximately 21,000 employees, while Toyota operates 10 plants with roughly 30,000 workers.
The impact of potential closures would be devastating for local communities, particularly in smaller counties where these facilities represent a major portion of the workforce. In Scott County, Kentucky, Toyota's Georgetown plant employs nearly one-third of the county's total labor force with 9,950 workers. Similarly, Honda's Greensburg, Indiana facility accounts for 18.5% of the county's workforce.
Analysis suggests that plant shutdowns would trigger massive unemployment spikes - up to 30 percentage points in some regions. Beyond direct job losses, closures would create a ripple effect throughout the supply chain and local economies. Parts manufacturers, service providers, and retail businesses that depend on auto worker spending would all face severe disruption.
Based on employment multiplier estimates from the Economic Policy Institute, the shutdown scenario could result in an additional 410,000 indirect job losses across the country. This would strain unemployment benefits and social services while reducing tax revenues at local, state and federal levels.
While permanent closures appear unlikely given the substantial investments in these facilities, even temporary shutdowns could inflict serious economic damage on workers and communities. The final outcome may depend on how the administration proceeds with its proposed tariff policies.