Car giant Honda today announced it is to axe nearly 500 jobs and close one of its two production lines at its Swindon plant as sales in Europe continue to struggle.
The move, which will also reduce its three shifts to two, is the latest blow to workers at the plant. Last year nearly 600 jobs were axed as it struggled against the global car sales downturn.
Honda today blamed poor sales growth for the latest job cuts, which are expected to affect 340 workers. Unions said a further 160 jobs now filled by agency workers were also being axed. The plant employs just under 3,000 people.
While UK car sales accelerated by 10.8% last year, those in the European Union fell by 1.7%. Around 90% of Honda Swindon's output goes to the European market. The plant, at South Marston on Swindon's outskirts, is its main production site for Europe.
Production at the plant has declined steadily over the past few years. This year it is expected to produce less than half its capacity of 250,000 vehicles.
Honda Motor Europe senior vice president Ian Howells said: “Over the last 12 months, we haven’t seen the growth we’d anticipated.
“With no increase forecast for the next couple of years, we must scale our manufacturing activity accordingly.
“However, with the restructuring we’re taking today, and our new model plans, we remain confident in the long-term future of our Swindon plant.
“Our Swindon operation continues to be the hub for our European car manufacturing activity.”
Honda said since 2011 it had invested more than £250m in the plant for the new Civic, new CR-V and new diesel engine production line.
Car manufacturing started at Swindon in 1992. The plant builds the Civic, Civic Tourer, CR-V and Jazz models, mainly for the UK and European markets, although some cars are exported to the Middle East, Africa and Australia. From next year, the plant will also produce the new Civic Type R
Unite union spokesman Jim D’Avila told the BBC today’s announcement from Honda was “very sad news”, adding: “This blow today will be very, very deeply felt”.
Tony Murphy, national officer of union Unite, added: “These job losses are a devastating blow, not just for these workers but for the thousands more across the industry whose work is dependent on the Honda plant.
“Decent, skilled jobs are being lost today and investment is being withdrawn, which is ringing alarm bells and putting the remaining workforce in fear for their future.”
Honda said moving production to one line would “improve production flexibility and efficiency”.
While the Swindon plant has the capacity to build 250,000 cars a year, last year it made just 140,094 – a decline of 25,000 on the previous year. The forecast for this year is about 120,000.
Honda’s first car plant, which was opened in 1992, can produce 150,000 cars a year operating on a two-shift basis. It currently produces both the CR-V and Jazz models.
The second car plant was added in 2001 to increase the total capacity to 250,000. It also marked a significant milestone in the company’s growth plans for Europe. It currently produces the new Civic model. It will now be mothballed and Civic production shifted to Plant One.
The company is to enter into consultation on the proposed job cuts.
The plant also produces engines for its made-in-Swindon cars at the South Marston plant. Around 500 people work on engine production, producing petrol and diesel engines in a three-shift pattern.
Engine production at South Marston started in 1998 – two years before full car assembly.
Since then Honda has invested more than £1.5bn in the 370-acre site, which began life as a pre-delivery inspection site for imported cars.
Both the town’s MPs, Robert Buckland (South Swindon) and Justin Thomlinson (North Swindon), pledged to help those affected by the job cuts through concerted action with business organisations such as Forward Swindon, the Department for Work & Pensions and Swindon Council.