Honda's job cuts spark fears for UK car industry
Weak demand across Europe is blamed as company joins Rolls-Royce, Ford and Vauxhall in sending out distress signals
The outlook for UK car makers deteriorated further after Honda announced 800 redundancies at its Swindon plant, blaming weak demand across Europe.
A day after Rolls-Royce said its sales growth dived to 1 per cent last year – down from 31 per cent in 2011 and 150 per cent the year before – Honda said the slump in European sales had made it necessary to cut jobs for the first time since it came in 1992. The move would reduce its workforce in South Marston, near Swindon, from 3,500 to 2,700.
The plant, which produces the Civic, Jazz and CR-V models, made 150,000 cars in 2012, well below its capacity of 250,000. Its closure raised fears that there could be more redundancies to follow in the UK vehicle making industry, with Europe's beleaguered car at its lowest for nearly two decades and the market showing little sign of recovery.
Tony Murphy, the national officer of the union Unite, said: "This is a hammer blow to UK manufacturing… it's a disaster for manufacturing in the UK and for the local economy."
Paul Everitt, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: "There are difficulties in Europe, there is no doubt about it. But the market in the UK has held up reasonably well."
Ford announced plans in October to cut 1,400 jobs at plants in southern England, ending UK production of the famed Transit van. In the same month, Vauxhall's Ellesmere Port Factory moved more than 2,000 workers to a four-day week to help its owner, General Motors, looks for savings at its European operations.
Last week, GM, which owns UK-based Vauxhall, sent shock waves through the industry when it forecast European car sales will weaken further this year. In comments that raised fears the $510m (£318m) cost-cutting programme GM announced last year may not be enough, Dan Akerson, the chief executive, said: "We must scale our operations to meet expected demand… if we can manage our cost structure so we can reduce our losses by a third to a half this year, that would be a good first step to a goal of being profitable by mid-decade."
Across the UK, sales performed well last year, rising by 5.3 per cent to a four-year high of 2.04 million, and business is forecast by the SMMT to remain flat in 2013.
However, since the UK exports 82 per cent of its cars, the health of the domestic market has a relatively small bearing on the fortunes of its manufacturers, analysts say. Europe is a much more significant market, accounting for about half of Britain's exports, but sales across the EU fell by 7.6 per cent in the first 11 months of 2012, according to the latest figures from the European Automobile Manufacturers' Association (EAMA).
Car sales are weaker in Europe than the UK in part because of the eurozone crisis, which has hit demand in Southern European countries. France was also hit badly, with sales falling 14 per cent last year, prompting Peugeot to cut 10,000 jobs. UK sales have been boosted by demand that has built up in the past three years as Britons held on to their motors. But there is no such pent-up demand in Europe, analysts argue.
Honda staff were told yesterday about the prospect of the job losses as the company began a 90-day consultation period on the redundancies at Swindon, which sells 40 per cent of the cars it makes to the UK, and hopes to avoid compulsory redundancies.
"Sustained conditions of low demand in European markets make it necessary to realign Honda's business structure," a Honda spokesman said.
The company recruited 500 extra staff to the plant only a year ago.
In a further sign of strain, Rolls-Royce yesterday refused to give a figure for its UK sales growth for 2012, after trumpeting a year earlier that British revenues jumped 30 per cent in 2011.
Made in Britain
Aston Martin Gaydon
Jaguar Castle Bromwich
Land Rover Solihull and Halewood
MG Motors Longbridge
MINI Oxford and Swindon
Vauxhall/Opel Ellesmere Port
- 1 Scarlett Johansson new band 'already hit with legal complaint' from another The Singles
- 2 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 3 What color is The Dress, white and gold or blue and black? An eyewitness gives a definitive answer
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Husband and wife die holding hands within hours of each other after 67 years of marriage
Mohammed Emwazi: Nine things we know about Isis militant 'Jihadi John'
What color is The Dress, white and gold or blue and black? An eyewitness gives a definitive answer
'Jihadi John': Mohammed Emwazi – from British computer programmer to Isis executioner
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
This is what it's like to be dead, according to a guy who died for a bit
iJobs Money & Business
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...
£22,000 - £23,000: Beverley James: Are you looking for the opportunity to work...