It has been reported today that the Japanese car manufacturer Honda are planning on cutting eight hundred jobs at its Swindon based plant after a substantial slump in demand for the vehicles. The economic problems in Europe have meant that Honda’s sales have suffered, especially in countries such as Spain, Italy and Greece where sales have decreased by around one million units.
Honda has been making cars in the UK since 1992, and only recently announced that it was planning on increasing production after investing three hundred million pounds. But as the increase in demand didn’t happen they have now reported a huge loss, and are planning to scale back production to 150,000 units a year. Executive vice president of Honda Motor Europe, Ken Keir said “Sustained conditions of low demand in European markets make it necessary to re-align Honda’s business structure. As such, Honda of the UK Manufacturing (HUM) will enter into formal consultation with its associates to consider these changes and the proposal that it will reduce the workforce by 800 associates by spring 2013.”
Understandably, many employees at the Honda plant are shocked by the news, and the Unite national officer Tony Murphy has said that they will help in the fight against compulsory job cuts. He said: “This is a hammer blow to UK manufacturing and to Swindon where Honda is a major employer. The reality is that over 1,000 jobs are going at Honda – It’s a disaster for manufacturing in the UK and for local economy. It’s a tragedy for our members and their families. There’s no doubt these cuts will have a significant knock-on impact on the supply chain, and on local shops and services.”
It will be interesting to see how the redundancies will affect sister industries of car manufacturing such as motor trade insurance. It will also be interesting to see how the sales of Honda vehicles will alter throughout the next year, ultimately changing the face of the UK car manufacturing industry.