Honda to close Swindon factory for two months

The plant’s 4,800 employees will be laid off for the duration of the closure, although they will still receive basic pay

Honda Jazz. Photograph: Garry Weaser/Guardian

Japanese car giant Honda added to the economic gloom today, announcing it is to shut its UK factory in Swindon for two months in February and March next year in response to falling sales.

The plant’s 4,800 employees will be laid off for the duration of the closure, although they will still receive basic pay, the company said. Some will be employed in training and on maintenance.

But the plan alarmed the unions, which believe Honda had considered plans to make 1,300 people redundant but opted to close the plant for two months to avert job losses.

Unite regional officer, Jim D’Avila, said: “This is unexpected bad news. The Union, staff and the company need to work together to minimise any financial hardship and to find ways to protect pay and long-term job security.

“Unite has meetings scheduled with the company throughout December in order to seek a solution and end this uncertainty for staff.”

News of the temporary shutdown will increase fears the car industry may be forced to make employees redundant in the face of a worldwide slump in car sales.

In the US, the world’s largest market, General Motors and Ford are both appealing for government money in order to survive.

News of the layoffs at Honda comes after tens of thousand of UK job cuts were announced in the last few weeks.

A huge number of companies operating in a range of industries have outlined plans to cut jobs, including Rolls Royce, AstraZeneca, BT, directories company Yell, cable company Virgin Media and builders merchants Wolseley.

Car manufacturers have been hit hard by a sudden drop in sales around the world and most have responded by cutting production.

Earlier this month BMW said it would close its Oxford factory, which produces the Mini, for four weeks to cut production as sales fell. In September, UK sales of the Mini fell 40%.

Nissan, Toyota and General Motors and Ford have all announced temporary shutdowns at UK plants or have shed contract workers.

Honda, Japan’s second largest car manufacturer, said it will cut car production at Swindon by 21,000 vehicles during the period, following an earlier decision to reduce it by 10,000 earlier this year.

A spokeswoman for the company said: “Demand is slowing in western Europe and also in Russia and eastern Europe, so we have to adjust our inventory to appropriate levels.”

It will also make 40,000 fewer cars at one of its Japanese factories, bringing the number of vehicles produced in its domestic market down to 1.278m in the year ending March 2009.

Yesterday Honda said it is taking similar steps in the US, the world’s largest car market, reducing production at two plants in Alabama and Ohio.

Honda’s US sales fell almost 4% through October, compared with a decline of nearly 12% for Toyota and a 7% drop for Nissan.

• This article was amended on Friday November 21 2008. In the first version of this article published at 7.30GMT we stated that Honda would not be paying employees for the duration of the Swindon plant closure. Honda has clarified its position on this matter and employees will be paid. This article has been corrected.

James Robinson
Friday November 21 2008 12.15 GMT

Source: The Guardian