4th March 2013

 

I recently visited Honda, which currently employs 3500 workers at its large industrial site in Swindon, to discuss the impact that the European economic downturn is having upon its operation. This was especially poignant in the wake of Honda’s announcement to reduce its workforce by 800.

 

Honda UK has been a real success story for manufacturing in the South West. Last year the company announced that they would be investing £267m in upgrading the Swindon site to build the new Civic & CR-V models alongside a new 1.6 litre diesel engine. Sadly though the company has been hit by a large drop in European demand, and with 50% of all factory production being earmarked for the continent, this has meant less cars being sold, and so less cars need to be produced.

 

Honda's factory could produce up to 250,000 vehicles a year but is only expecting to make 150,000 in 2013. The staff reductions will seem especially unfair considering the good sales growth experienced in the UK market and good profits around the world. The problem is that the Swindon facility builds cars for the ‘European’ region so that as the Eurozone slides into recession then it is Honda in Swindon that feels the impact.

 

Although I applaud the company’s commitment to production in Swindon, and the way that it has engaged with the Unions over its voluntary redundancy initiative, I can hardly welcome the news that the work force as a whole is facing such uncertainty.

 

Let us hope that growth returns to the continent and that Honda is in a position to once again expand its production, take on more workers and enjoy a sunnier future, because at present the economic climate is certainly overcast.

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