Subaru Cuts Indiana Production During Legacy, Outback Recall

May 16, 2016

Credit Subaru of Indiana Automotive

Subaru is cutting back on production and overtime at its Indiana factory to free up parts for a major recall.

The Japanese car-maker has to fix a steering problem in more than 50,000 new vehicles made recently at its only plant in North America.

The Lafayette factory employs more than 4,000 workers -- and thanks to the recall, as many as 3,000 of them may miss out on daily and Saturday overtime for the next few weeks.

Factory vice president Tom Easterday says that'll free up parts to repair steering issues in 2016 and 2017 Legacy and Outback models made at the plant between Feb. 28 and May 6.

"So any parts that were scheduled to be used for the overtime production, those parts will now be shipped directly to the dealer to help out with our customers that would need to have the part changed," he says.

That means less production and lower inventory until mid-June, which could affect sales. But Easterday hopes they'll recoup the loss -- and let workers do the same -- later this year.

"We'll probably be making that overtime up, most likely, in August, September, October timeframe," Easterday says.

That's around when the plant will boost production. They'll make more Outbacks on the line that's currently making Camrys through a joint venture with Toyota -- a partnership set to end this month. The plant will also start making 2017 Subaru Imprezas in November.

Last year, the company announced plans to hire 1,200 workers to cover the increase. Easterday says they've hired about a thousand so far, with the rest coming next month. He says the recall shouldn't affect that process.   

CLARIFICATION: Subaru is temporarily reducing the amount of overtime available to employees, not reducing the overtime pay rate.