Honda to cut 800 UK jobs on falling European demand

Fri Jan 11, 2013 7:08am EST
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By Rhys Jones

LONDON (Reuters) - Japanese carmaker Honda (7267.T: Quote) plans to cut around 800 jobs at its plant near Swindon in southwest England due to falling demand for its vehicles across mainland Europe.

The company, which makes the Civic, Jazz and CR-V models at the South Marston plant near Swindon, said on Friday it would enter into formal consultation with staff over the cuts which would likely take place in the second quarter of 2013.

Carmakers are trying to scrap underused factories and cut surplus jobs that are fuelling losses in Europe as demand for cars in major markets like France and Germany flounders.

Honda employs some 3,500 staff at the South Marston plant, which produced around 150,000 vehicles last year. The plant has the capacity to make 250,000 cars annually.

Last year Honda expected a surge in demand and hired 500 workers and invested 267 million pounds ($430 million) in the Swindon plant.

However, the expected increase in demand failed to materialise, with Honda's sales in mainland Europe, especially Spain and Greece, falling by around a million in the past year.

Ken Keir, Honda Motor Europe's executive vice president said the company needed to "realign the business" but was committed to Britain for the long-term.

"These conditions of sustained low industry demand require us to take difficult decisions. We are setting the business constitution at the right level to ensure long term stability and security," said Keir.   Continued...