Honda to suspend work at UK plant for two months

The recession in the auto sector is spreading thick and fast in the UK and the whole of Europe. The latest signs of this is Honda Motor deciding to suspend production at its plant near Swindon, UK, for two months. The plant would be closed through February and March next year. Some of the 4,800 staff at the site will work on maintenance during the period while others will work on training initiatives.

All staff will receive full basic pay during the downtime.

The company said the suspension will help it reduce production by 61,000 vehicles on top of cuts previously announced worldwide in the year ending March 2008. Honda cut its worldwide sales forecast by the same number last month. The shut-down at Swindon will result in 21,000 fewer vehicles being produced while lower production at one of its factories in Japan would reduce output by a further 40,000 cars.
 
A statement from the company read: ''Honda today announced a plan to adjust automobile production at its UK factory in Swindon for the current fiscal year in response to a dramatic change in the global market.

Honda's move comes after a series of production cuts across most of Britain's car industry. Honda Motor's actions follows in the footsteps of Nissan, Ford, BMW, General Motors and Toyota, which have all carried out or are planning to stage temporary shut-downs of UK production plants.

The Society of Motor Manufacturers and Traders UK has reported a 23 per cent month-on-month decline in sales from October and has revised its overall predictions for total 2008 sales down to 2.15 million – a 10 per cent drop on last year's figures.

Earlier this week, the UK Car Association asked authorities for a multi-billion pound bailout package, which is under consideration. In the meantime, the situation is deteriorating rapidly with all UK car manufacturers struggling with cash flow as no one is buying cars. In a rare case, one dealer was heard making a ''buy one new car and get one free'' offer.

Industry men say that this was by far and away the worst trading conditions which the industry has seen for many years and there are serious concerns that a large number of car retailers and car manufacturers can go out of business.