It’s a knock for the UK car industry, which has been doing rather well in recent months. But Honda has announced the first cut to its employee numbers since it began manufacturing in Swindon back in 1992.
The plan, which is home to production for the Jazz, the Civic and the sportier CR-V models, currently employs around 3,500 people, and 500 of those were added just last year.
There will, as always, be a consultation period for the redundancies, and the firm has said that it wants to try and avoid any of them being compulsory. In a statement, the firm said: ‘Sustained conditions of low demand in European markets make it necessary to realign Honda’s business structure.’
To be fair to Honda, the eurozone crisis has been dragging on, and getting manifestly worse over the last 12 months – the firm pointed out that the annual demand for new cars in the bloc has fallen by a million units in the last year alone.
The Swindon plant is capable of producing a quarter of a million cars per year, but last year it produced just 166,000. That is an increase on the 97,000 that it pumped out in 2011, but that was a particularly bad year anyway.
Honda Europe's executive vice president, Ken Keir, said he expects no significant growth in the eurozone for three or four years, and added that making the redundancies announcement was 'one of the worst working days of my life.'
The Society for Motor Manufacturers and Traders – which last week revealed the best UK car sales figures for a decade – trotted out a statement from chief executive Paul Everitt. ‘Despite challenges brought by weak European demand, the longer-term prospects for the UK automotive sector remain good.’
And while we’re on redundancies, American Express announced on Friday that it is culling 5,400 posts throughout its global network by the end of this year. It has a total of 63,500 employees throughout the world, but is looking to cut costs after it took £370m in post-tax charges in Q4 last year.
It is not clear how many of them will be in the UK, but in a statement, the firm said that it will spread the cuts proportionally between its home US market and overseas markets.
Thankfully for the British economy, AmEx is one of the smaller operators, so hopefully there won’t be many jobs affected. And let’s keep our chin up about the cars: the UK has been doing really well in that field recently. Click here for an optimism fix.