Page last updated at 07:56 GMT, Sunday, 1 February 2009

Honda's four-month break begins

Workers at Honda react to the decision

Honda has closed its UK plant in Swindon for four months.

This affects just over 2,500 of its 3,700 employees, who will receive their full basic pay for the first two months, but around 60% thereafter.

The shutdown is thought to be one of the longest in Britain's recent industrial history.

The move is in response to the downturn in the UK car market. On Friday, the Japanese car company said global third quarter net profit had dropped 89%.

Production staff, who install and upgrade machinery rather than make cars, will continue to work at Swindon during the shutdown.

Safeguarding jobs

Honda has said there are no plans for redundancies and that it intends to "safeguard employment" for workers who want to stay at the company.

Dave Hodgetts, senior director at the South Marston plant, said the company was not giving any guarantees but was "giving [its] best intentions".

"We will be trying to protect their jobs - that's our priority for the whole period," he said.

"After the four-month break, the plan is for all the staff to come back and their jobs will be secure," he added.

Former Honda employee Andy McGurk on re-training and leaving the firm

Mr Hodgetts added the company would be ordering parts for next month, an indication of its commitment to start production in June.

When staff return on 1 June, they will be making fewer vehicles as production, which was at around 240,000 vehicles a year, resumes at half that level.

Among those vehicles will be the Honda Jazz, a small car costing between 10,000 and 12,000, which Honda says is proving popular with cash-strapped consumers.

Honda, which employs 3,700 people in the UK and exports the Civic to 60 countries worldwide, has also cut 3,100 temporary jobs in Japan and reduced global production by 56,000 vehicles.

'Not utopia'

Staff will be paid during the closure, but when the plant reopens, employees will have to work unpaid overtime equal to the amount they have been paid for over the four-month period, a spokesman for Honda said.

CUTTING BACK

Aston Martin: Extended Christmas shutdown and 600 redundancies. Temporary three-day week began in January
Bentley: Worked a three-day week in October and longer Christmas break. Closing Crewe plant for seven weeks from the beginning of March
GM (Vauxhall): Extended Christmas closure and 40-day shutdown
Honda: Four-month shutdown between February and May
Jaguar Land Rover: Series of one-day shutdowns and production cuts late 2008 plus 450 redundancies planned
Mini: Christmas shutdown extended by 10 days. 300 agency staff let go and one week shutdown planned for February and two weeks in August
Nissan: Two-week shutdown late last year and 1,200 redundancies
Toyota: One of the night shifts suspended
Source: SMMT

Jim D'Avila, Unite the Union's officer for the South West, added that while it was good that workers were still being paid, if things got dramatically worse "companies like Honda will not be able to pay wages".

"[The closure] has been a long time coming...but we have been trying to minimise the financial hardship and protect as many jobs as we can."

Many workers will be cutting back, he said. "It's not utopia here...some will have to make financial adjustments to their budget. Some will get rid of cars, others will take a second mobile phone back or will take holidays in the UK instead of abroad."

But some workers might be better off, he said. "[Some] will go off and get casual jobs and in some instances their income will be greater than if they had worked the four months."

It is understood that more than 1,000 staff have signed up for a voluntary severance package and some have already left the business.

Paul Wiseman, a general associate in the engine plant, signed up for unpaid voluntary work at the Great Western Hospital.

He said: "Everyone is feeling a bit down as we're all facing four months off, and we're all a bit worried that it might be more.

"Honda is trying their best and there is always a fear that we could lose our jobs, but Honda have told their staff its future is in Swindon."

Profits plunge

Also on Friday, Honda said that its net profit for the three months to December plummeted 89%.

The company made a net profit of 20.24bn yen ($226m; 158m), far lower than the 200bn yen it made in the same period the year before, prompting the company to cut its annual forecast by more than 50%.

The group now expects net profit for the year to March 2009 to be 80bn yen, less than half its earlier forecast of 185bn yen.

Bentley, Vauxhall and Jaguar Land Rover have all stopped production or cut the working week as demand for their cars fall.

On Friday Rolls Royce confirmed that 241 people were being made redundant in Derby. While the redundancies had been announced in November, the exact number was not known until staff were briefed this morning.

On Tuesday, Business Secretary Lord Mandelson outlined a package of government support for the UK car industry potentially worth up to 2.3bn.


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