Honda staff set to return to work

Thousands of staff will resume production at the Honda car factory at Swindon in Wiltshire tomorrow after a four-month shutdown at the plant.

The workers have agreed to a 3 per cent pay cut for the next 10 months, while managers are having pay reduced by 5 per cent in the face of the big downturn in new-car sales.

As many as 1,300 workers at Swindon have taken voluntary redundancy, reducing the workforce to 3,400.

Staff got full pay for the first two months of the shutdown and around 60 per cent for the last two months.

Although the return to work is welcome news, the plant will be turning out far fewer cars this year, despite the popular Honda Jazz supermini starting production at Swindon from September.

Honda had hoped to produce 228,000 vehicles at Swindon this year. But last November this figure was reduced to 175,000 when it was decided that production would stop in February and March this year.

In mid-January, Honda said the shutdown would last through April and May as well, and the 2009 production figure has now been set at just under 113,000.

With production halted, Honda has spruced up the Swindon plant, stripping and rebuilding assembly lines and redecorating throughout.

Honda new-car sales in the UK dipped more than 16 per cent in April 2009 compared with April 2008 and sales for the first four months of this year are down more than 34 per cent.

But the restart of production comes at a time when there is a glimmer of hope amid the motor industry gloom.

Last week, the Government announced that the "cash for bangers" car-scrappage scheme had been an initial success, with 35,000 new cars being ordered since the initiative was first announced on April 22.

Nationally, new car sales have fallen 28.5 per cent in the first four months of this year. But it is possible that the scrappage scheme could, at the very least, halt the rate of decline.

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