Honda to axe 800 jobs with first UK cuts in 20 years

Workers on the Honda CR-V production line at the Honda Plant in Swindon (PA)

Japanese car giant Honda is to cut 800 jobs at its UK factory after a slump in demand across Europe.

Workers at the firm's plant in Swindon, which employs 3,500, were told the grim news as they arrived this morning.

Honda, which has been making cars in the UK since 1992, has never had job losses before in this country, but it said demand for cars in Europe, including Spain, Italy and Greece, had fallen by a million in the past year.

The company gave the statutory 90-day notice of consultation and said it would seek to avoid compulsory redundancies.

Ken Keir, executive vice president of Honda Motor Europe, 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.

"Honda remains fully committed for the long term to its UK and European manufacturing operations. However, these conditions of sustained low industry demand require us to take difficult decisions.

"We are setting the business constitution at the right level to ensure long-term stability and security."

Honda said individual discussions will be held with workers at the Swindon factory following the announcement, while union officials have been briefed about the plans.

Around 150,000 cars were built last year in Swindon, which has an annual capacity of 250,000.

A third of the cars are sold in the UK, with the rest being exported to 26 countries, mainly in Europe.

Honda builds the Jazz, Civic and CR-V models in Swindon and has grown in size since it first started manufacturing in the UK, investing more than £2 billion.

The Society of Motor Manufacturers and Traders (SMMT) reported earlier this week that sales of new cars in the UK topped two million last year, the best since 2008.

Honda announced a £267 million investment programme at Swindon last September, creating 500 new jobs because of an expected increase in demand as well as a new diesel engine line.

Business Secretary Vince Cable visited the plant to mark the news.

Honda said the expected increase in demand had not happened so it now predicted that annual production would remain at 150,000 for the next three years.

A Department for Business, Innovation and Skills spokesman said: "This will be a bitter blow to the workforce and the local area and we will be working with local partners to minimise the impact of the job losses. Times are tough in the European market but the automotive industry remains a major success story for the UK. Over the last two years global manufacturers including Nissan, JLR and BMW have invested £6 billion in the UK, safeguarding and creating new jobs."

Unite national officer Tony Murphy 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 the 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.

"Unite will oppose any compulsory job losses. We expect Honda to negotiate meaningfully with the union in order to mitigate the impact of these cuts. Unite will be meeting with our local union reps in the coming days to discuss the company proposals."

Unite said more than 1,100 jobs will be lost as the company recently announced 325 job cuts to temporary workers at the Swindon site.

The announcement was made to the staff - referred to as associates - by Dave Hodgetts, managing director of Honda UK sales, at the plant in Swindon late last night.

He said the process of telling the workers about the cuts started at the end of the late shift and had continued through the day shifts today.

"The reaction was quite sombre to be honest, very quiet, reflective," he said.

"I think it has been a bit of a shock and we're very disappointed ... to have to announce this today, but also we're obviously disappointed throughout the company that we haven't been able to maintain the levels of employment that we had last year.

"But this is really about protecting the jobs of the 2,700 people who will remain here beyond April."

Mr Hodgetts said the cuts to staff had come as a result of very low market demand, particularly in southern Europe, and the fact Honda will have to reduce production levels next year from 180,000 cars in the year to 150,000.

He admitted it had been a hard few years for the staff at the plant.

"I think we've had some particular difficulties over the last three or four years," he said. "Initially starting with the recession and where we had quite a long shutdown to reduce stocks that we had built up, but then we got back on to an even keel for a couple of years, and then we were affected 18 months ago by the Japanese tsunami, which was a very tragic situation, but also very much affected our supply chain, and that was followed on by the Thai floods situation, so we have just come out of all those disasters and now have to face a very big reduction in market demand."

Arriving at the plant, general associate Malcolm Hanley, who started working for Honda in 2007, said: "I'm gutted, it's my work and I don't know what I'm going to do. If I'm getting fired, where am I going to go? What am I going to do?

"I found out last night, about midnight. Everyone just went pale. Everyone thought it was all right, but that's the way it goes."

Colin Brain, who works at the engine site as a floating operator, said the announcement had come as a big surprise, particularly because it was not long ago that the company announced a new multimillion-pound investment programme.

"We heard last night, because we were on shift," he said.

"It was a bit of a shock. We don't really know what is going on at the moment, it's not really sunk in. We're going to try and do as best we can now, and hopefully get more questions answered today."

Mr Brain, who has worked for Honda for 15 years, added: "It seems like one minute they're your best friend and the next minute they don't like you very much. It's very strange, and they don't seem to tell you much until the very end, and it's been like that for the last three or four years now."

PA