Falling European sales blamed for Honda's massive job cut

8:31am Friday 11th January 2013 in News By Leigh Robinson

800 jobs are to go at Honda's Swindon plant 800 jobs are to go at Honda's Swindon plant

Honda is to slash its workforce by 25 per cent in Swindon and as a result 800 people will be losing their jobs at the factory at South Marston. At the moment there are more than 3,500 people employed there.

The company, which provides vehicles solely for the European market, has been hit by low demand in Greece, Spain and Italy and Honda has had difficulty in selling their vehicles on mainland Europe. Ironically the UK market is buoyant and sales are doing well for Honda and other manufacturers.

Honda is now entering formal consultation with its workforce and the 800 redundancies will come from right across the board from the production line to the offices.

The workforce will be reduced by the end of April.

The 800 redundancies come less than a year after Honda recruited 500 new jobs to help build their two new cars in Swindon - the refreshed Civics and 4x4 CR-Vs. Added to that they are building a new diesel engine for their fleet of models.

But Honda says even though it is losing a quarter of its workforce it will continue building cars in Swindon for the forseeable future.

“While this is not good news for the company at the moment the decision to cut the workforce is to ensure the long term stability of its future business,” said Sam Tipper, speaking on behalf of Honda.

“Last year we celebrated 25 years in Swindon and I feel sure we will still be here in Swindon for the next 25 years.
“To date Honda has invested more than £2bn in the Swindon operation and only last September £267m was spent on modernisation of the plant here.”
To help them with their redundancies Honda will be working alongside the union Unite.

The factory will revert to two single shifts for production purposes. The number of cars to be built at the end of this financial year in March will be 171,000. Next year that figure will be reduced to 150,000.

Honda will be building a new Civic station wagon later in the year and the sporty Civic Type R probably in 2015.

Comments(36)

Tim Newroman says...
8:39am Fri 11 Jan 13

Fairly disastrous for Swindon, especially as the workers and families affected have little hope of finding similarly paying work... but I'm sure it was only a month or two ago that the Adver was trumpeting increased sales and everything being rosey at the Swindon Honda plant?

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A.Baron-Cohen says...
9:16am Fri 11 Jan 13

This is tragic news indeed for the families of the Honda employees.
This is bad news for the Swindon Economy.
However, this is a clear warning to all of us that what happens in the EU impacts us directly.
Leaving the EU would mean the closure of Honda and many other plants leaving millions unemployed........

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Tim Newroman says...
9:56am Fri 11 Jan 13

A.Baron-Cohen wrote:
This is tragic news indeed for the families of the Honda employees.
This is bad news for the Swindon Economy.
However, this is a clear warning to all of us that what happens in the EU impacts us directly.
Leaving the EU would mean the closure of Honda and many other plants leaving millions unemployed........
Everyone in Europe would stop buying the Honda vehicles they wanted just because they were made in the UK and we'd left the EU?

Do people in the EU not buy cars made in Asia, Japan or America?

Leaving the EU wouldn't make any difference to Honda's car sales in the EU.

Also, if EU demand is already low and responsible for job losses, it makes very little difference if we remain in it.

By the way, on balance I am actually for us remaining in the EU (with new caveats). It's just that the pro-EU argument that leaving would cause a collapse in exports isn't a very good one.

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AGINGER says...
10:03am Fri 11 Jan 13

The quicker that this company start to manufacture a truly basic motorcar which will suffice to convey us all to work and back the better,no fancy electronics,in other words . a peoples car, Diesel, Petrol or Electric but at a respectable price.
Many omnibuses run virtually empty,along bus lanes which have forced the regular traffic closer together head on wise,the cycle lanes are empty,oh what a beauty the planners have created all the way to the Supermarine Roundabout up the Highworth Road from Stratton.

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Always Grumpy says...
10:15am Fri 11 Jan 13

A.Baron-Cohen wrote:
This is tragic news indeed for the families of the Honda employees.
This is bad news for the Swindon Economy.
However, this is a clear warning to all of us that what happens in the EU impacts us directly.
Leaving the EU would mean the closure of Honda and many other plants leaving millions unemployed........
What complete and utter rubbish - as usual.

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RichardR1 says...
10:16am Fri 11 Jan 13

A.Baron-Cohen I fail to understand your comment about the EU, surely it's because of the instability and bad fiscal management in the EU that countries are unable to buy from us or anyone else.

If we left we could join EFTA and trade with Europe without hindrance and actually reduce the cost of British built cars as there would not be a 15% trading tariff imposed.

We could also develop trading in the 2/3rds of the world that isn't the EU, where all the emerging markets are.

Let us not forget we have a staggering £4bill a month trade deficit with the EU, but a £1 bill trading supplies with the rest of the world, which would grown exponentially without the constraints of the EU.

As for the loss of these jobs lets hope these families find some form of respite. Tragically there will be many more job loses in the short to medium term, with more and more part time working.

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southside7 says...
10:17am Fri 11 Jan 13

AGINGER wrote:
The quicker that this company start to manufacture a truly basic motorcar which will suffice to convey us all to work and back the better,no fancy electronics,in other words . a peoples car, Diesel, Petrol or Electric but at a respectable price.
Many omnibuses run virtually empty,along bus lanes which have forced the regular traffic closer together head on wise,the cycle lanes are empty,oh what a beauty the planners have created all the way to the Supermarine Roundabout up the Highworth Road from Stratton.
I agree. Kia have spotted this and are responding. The economic state we're now in dictates that practicallity and price are the main driver and Honda need to cotton on to this fast.

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StillPav says...
10:37am Fri 11 Jan 13

southside7: Do you have any evidence to back that up? A recent news item stated that UK new car registrations rose 5.3% in 2012 to 2.04 million with Ford's Fiesta and Focus, and Vauxhall's Corsa and Astra were the four best-selling models. The Volkswagen Golf came fifth, with the Nissan Qashqai in sixth place.

Maybe Honda should be asking their marketing department why their cars are being outsold by their competitors.

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A.Baron-Cohen says...
10:40am Fri 11 Jan 13

RichardR1 wrote:
A.Baron-Cohen I fail to understand your comment about the EU, surely it's because of the instability and bad fiscal management in the EU that countries are unable to buy from us or anyone else.

If we left we could join EFTA and trade with Europe without hindrance and actually reduce the cost of British built cars as there would not be a 15% trading tariff imposed.

We could also develop trading in the 2/3rds of the world that isn't the EU, where all the emerging markets are.

Let us not forget we have a staggering £4bill a month trade deficit with the EU, but a £1 bill trading supplies with the rest of the world, which would grown exponentially without the constraints of the EU.

As for the loss of these jobs lets hope these families find some form of respite. Tragically there will be many more job loses in the short to medium term, with more and more part time working.
I will not go into the EU argument, it is just pointless to make anyone understand that we are stronger together....
This is simply not part of our collective psyche.

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smartcabman says...
10:45am Fri 11 Jan 13

Honda need to look at the market and bring out a small car i.e a 1L like toyota,citroen and nissan. Instead of overpriced big cars.

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A.Baron-Cohen says...
10:46am Fri 11 Jan 13

Tim Newroman wrote:
A.Baron-Cohen wrote:
This is tragic news indeed for the families of the Honda employees.
This is bad news for the Swindon Economy.
However, this is a clear warning to all of us that what happens in the EU impacts us directly.
Leaving the EU would mean the closure of Honda and many other plants leaving millions unemployed........
Everyone in Europe would stop buying the Honda vehicles they wanted just because they were made in the UK and we'd left the EU?

Do people in the EU not buy cars made in Asia, Japan or America?

Leaving the EU wouldn't make any difference to Honda's car sales in the EU.

Also, if EU demand is already low and responsible for job losses, it makes very little difference if we remain in it.

By the way, on balance I am actually for us remaining in the EU (with new caveats). It's just that the pro-EU argument that leaving would cause a collapse in exports isn't a very good one.
Of course, you are right, EU customers wouldn't stop buying goods because it is made out of the EU (China, UK) however UK goods would have to pay tariffs to access EU markets and also meet EU standards.
If we can produce cheaper and better goods than global competitors then there is no reason why we should not prosper.

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southside7 says...
11:04am Fri 11 Jan 13

StillPav wrote:
southside7: Do you have any evidence to back that up? A recent news item stated that UK new car registrations rose 5.3% in 2012 to 2.04 million with Ford's Fiesta and Focus, and Vauxhall's Corsa and Astra were the four best-selling models. The Volkswagen Golf came fifth, with the Nissan Qashqai in sixth place.

Maybe Honda should be asking their marketing department why their cars are being outsold by their competitors.
You've answered it for me. Fiesta, Focus, Corsa. Cheaper cars, you do the math.

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PJC says...
11:14am Fri 11 Jan 13

My sympathies to Honda employees at this uncertain time. Not a very happy new year for them. :(

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daswilts says...
11:15am Fri 11 Jan 13

I agree that it seems the small car marktet is taking off. Ive to a small toyota and although not a cheap to buy as a Kia, its cheap to run and very reliable. The problem is Swindon is the type of town to be hit by the reccession compare to other bigger towns especially around the South East. This is one reason I'm move up the M4 much close to London as places around there havent been hit and in fact some have increased employment during the last 4 years. As Swindon has so few big companies now, the impact is going to felt more when these type of cuts are made. Of course it's not just Honda, Renault and Pegeuot are struggling in the EU.

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StillPav says...
11:17am Fri 11 Jan 13

southside7 wrote:
StillPav wrote: southside7: Do you have any evidence to back that up? A recent news item stated that UK new car registrations rose 5.3% in 2012 to 2.04 million with Ford's Fiesta and Focus, and Vauxhall's Corsa and Astra were the four best-selling models. The Volkswagen Golf came fifth, with the Nissan Qashqai in sixth place. Maybe Honda should be asking their marketing department why their cars are being outsold by their competitors.
You've answered it for me. Fiesta, Focus, Corsa. Cheaper cars, you do the math.
southside7 - Is a Focus, Astra or Golf cheaper than a Civic?

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The Artist formally known as Grumpy Old Man says...
11:18am Fri 11 Jan 13

Bad news for the people that work there.

I suspect the main reason is Honda produce competent, but expensive and terminally dull cars.

They also have a poor image of being an 'old man' car which means a large part of their potential customer base would not even consider them...

As a customer, if I have to buy a terminally dull car (as most are these days), I will buy the cheapest terminally dull car I can find, which invariably isn't a Honda.

Perhaps they'll turn their fortunes around with a halo car such as the CTR. Maybe they should produce a replacement for the S2000?

Otherwise I can't really see how they'll turn it around....

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The Artist formally known as Grumpy Old Man says...
11:25am Fri 11 Jan 13

StillPav wrote:
southside7 wrote:
StillPav wrote: southside7: Do you have any evidence to back that up? A recent news item stated that UK new car registrations rose 5.3% in 2012 to 2.04 million with Ford's Fiesta and Focus, and Vauxhall's Corsa and Astra were the four best-selling models. The Volkswagen Golf came fifth, with the Nissan Qashqai in sixth place. Maybe Honda should be asking their marketing department why their cars are being outsold by their competitors.
You've answered it for me. Fiesta, Focus, Corsa. Cheaper cars, you do the math.
southside7 - Is a Focus, Astra or Golf cheaper than a Civic?
The Focus and Astra are quite a lot cheaper than the Honda. The Golf is far more widely bought than any Honda in the fleet market as they retain values better.

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AFCBExile says...
12:03pm Fri 11 Jan 13

Well done Davey Gravey spreading your good will and sympathy at a difficult time for 800 people. Look in your mirror and I suspect that you will find the true cretin!!

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nelle2705 says...
1:23pm Fri 11 Jan 13

Davey Gravey wrote:
Hopefully the ones sacked will be the utter cretins who drive like morons at the end of their shifts.
I have reported this post as i found it to be offensive and in bad taste in light of the current situation. I happen to be a victim of this terrible decision that Honda has had to make. Compassion is FREE !

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house on the hill says...
2:24pm Fri 11 Jan 13

Very sorry for all concenred in this and hope things improve in the not too distant future.

Very valid points, there is a recession and a lot of cheaper alternatives out there, sadly Honda havent moved with the times producing cars people actually want to buy at prices they can afford. Hopefully they will soon.

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Tim Newroman says...
2:37pm Fri 11 Jan 13

StillPav says...
Maybe Honda should be asking their marketing department why their cars are being outsold by their competitors.


While it's obviously not entirely their fault, I would suggest that - fantastic though they undoubtedly are - Honda's advertising has been too clever by half over the last 5 to 10 years.

Look at adverts by Vauxhall and Nissan for their comparable models and you'll see a massive difference in approach... and one which is working more successfully for the two companies mentioned.

Hondas advertising seems to be targetted at a market that isn't the same as the target market for their vehicles.

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RichardR1 says...
5:19pm Fri 11 Jan 13

Baron, you do not want to discuss the EU but you brought it up. Yes we would have to pay a tariff like Norway who pay £340 million a year and have a trade surplus of £50 billion.

We on the other hand pay a £8.5 billion net membership fee and have a trade deficit of about £48 billion.

Not rocket science is it?

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Davey Gravey says...
8:44pm Fri 11 Jan 13

nelle2705 wrote:
Davey Gravey wrote:
Hopefully the ones sacked will be the utter cretins who drive like morons at the end of their shifts.
I have reported this post as i found it to be offensive and in bad taste in light of the current situation. I happen to be a victim of this terrible decision that Honda has had to make. Compassion is FREE !
Considering people don't know who is affected yet, shall I report your post for lying? My point stands and is based on fact. Don't want to see people lose those job except for those who think they drive for Honda f1 when they leave work.

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nelle2705 says...
9:59pm Fri 11 Jan 13

considering i work for honda, yes i am a affected and do not like your tone or attitude. you have no point to make at all.

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itsamess3 says...
10:22pm Fri 11 Jan 13

The EU argument does not stand up as the rise in EU citizens here has reached epidemic proportions. The fact being govt initiatives have reduced the amount of cheaper cars on the streets.
Later cars and vans with accident damage or high mileage are bought repaired and clocked and sent to various EU countries where there are not the insurance regulations nor mileage safeguards and safety checks.
These more modern cars attract far greater prices there than here--as much as 3 times the price--hardly surprising Honda cannot sell new cars in the EU.
Honda workers come from far and wide to work in Swindon-much the same as the council and large companies as we have no laws that restrict employers taking on staff from anywhere as long as they are legally here.

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HUM4LIFE says...
11:49pm Fri 11 Jan 13

Happy New Year HUM.
Just before Christmas we were told that Shift working would be extended until April 2014 and people being interviewed up until just last Weds. January we're being told that single shift and 1000 redundancies. I would like to know who is responsible for planning. I bet they're not on the redundancy list!!!

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old 'arry says...
6:45am Sat 12 Jan 13

StillPav wrote:
southside7: Do you have any evidence to back that up? A recent news item stated that UK new car registrations rose 5.3% in 2012 to 2.04 million with Ford's Fiesta and Focus, and Vauxhall's Corsa and Astra were the four best-selling models. The Volkswagen Golf came fifth, with the Nissan Qashqai in sixth place.

Maybe Honda should be asking their marketing department why their cars are being outsold by their competitors.
Now is the time to dig your bean trench where you are going to plant runners later and fill it with rotted compost.

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red manc says...
8:29am Sat 12 Jan 13

nelle2705 wrote:
Davey Gravey wrote:
Hopefully the ones sacked will be the utter cretins who drive like morons at the end of their shifts.
I have reported this post as i found it to be offensive and in bad taste in light of the current situation. I happen to be a victim of this terrible decision that Honda has had to make. Compassion is FREE !
Well said .there bloody idiots in there rented cars . . Nelle . Your no different from thousands of others its called a reccession .but not everyone who loses there job goes on a public forum looking for sympathy . .

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Localboy86 says...
8:37am Sat 12 Jan 13

Honda seem poorly organised, call shifts one minute then lay people off, call overtime when there is no work to be done, pay people too little or new starters too much (never to see the employee or their money again) I'm sure some of the things they have done with the "owing of hours" wouldn't stand if someone stood up to them and took them to court. Lions led by donkeys as the old saying goes

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Ruth123 says...
9:39am Sat 12 Jan 13

Before coming to this decesion what happen to the Honda management, why didn't take preventive measures before coming to this stage of redundencies. This is clearly shows who ever in management role is not fully qualified that's the reason employees facing this problem. They recruit Engineers in management role is that the correct option? Honda UK dont have proper planning department, am sure. I really regret to families of Employees, its really horrible to think what's going on with them. I blame this purely Honda UK management.

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RichardR1 says...
12:11pm Sat 12 Jan 13

Blaming Honda is remarkably simplistic, like those who blame bankers because they allowed you to self certify for a mortgage then couldn't afford the repayments.

Honda in Swindon have tried desperately hard, sometimes against extreme provocation from within and without to maintain their Swindon/UK presence.

Their emerging markets are not any longer in the EU/Europe, so lets be thankful they remain here, it could have been much worse, whilst no consultation to those who will lose jobs.

Free Britain from the shackles of the EU and Honda's vehicles could be 15% cheaper, that is the reality.

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somwal25 says...
1:22pm Sat 12 Jan 13

what is the true number that are being made redundant Honda took on last year about 400 workers on a 1 year contract. which is due to end in march this year. have they been included as part of the 800 or are in addition to the 800. also this latest job cuts will also affect the contract companies who supply or provide services to Honda. how many of there staff will be made redundant and will they get the same support as the honda workers will get

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Davey Gravey says...
1:29pm Sat 12 Jan 13

red manc wrote:
nelle2705 wrote:
Davey Gravey wrote:
Hopefully the ones sacked will be the utter cretins who drive like morons at the end of their shifts.
I have reported this post as i found it to be offensive and in bad taste in light of the current situation. I happen to be a victim of this terrible decision that Honda has had to make. Compassion is FREE !
Well said .there bloody idiots in there rented cars . . Nelle . Your no different from thousands of others its called a reccession .but not everyone who loses there job goes on a public forum looking for sympathy . .
The only person who knows theyve lost their job it would appear. None of the others have been told yet. Probably one of the morons who weaves in and out of traffic on the a419 and took offence.

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itsamess3 says...
1:51pm Sat 12 Jan 13

Honda has fallen foul of their own policies as their production here relies on the european market and likewise with their other world plants.
Car sales in europe are bouyant in both new and used and Hondas are selling well--but not the ones produced in Swindon.

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asimo says...
4:12pm Sat 12 Jan 13

The annoucement was not as a result of bad planning . . poor sales . . or incompetent management. Looking back it was no wonder the company did not advertise their products . . Is there an exit strategy for Honda in the UK ? My father works there and he believes Honda dont plan for failure. I have witnessed him working over 50 hours a week with overtime for Hondas' insatiable demand to build more cars than they could ever sell . . Why ? They have stock piled so many cars (not by misfortune) that they now dont need the amount of staff they do. . ! Why ? So they can get away with paying statutory redundancy payments rather than enhanced packages. Previous severance packages were negotiated with Unite. My dad said he feels the company management new exactly what they were doing by forcing more volumes with overtime to fill there stock that could sustain a slow draw down from sales. I read that the politicians are crawling out of the wood work to bolster their profiles and promote Hondas' " bad luck " story. . . vested interests or what the parasites !

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jumper1945 says...
8:32pm Sat 12 Jan 13

I took redundancy last time round and am I glad I did. All I have to say get rid of 2 in 5 co-ordinators and 1 in 3 C4 and C5's and Honda will then not be top heavy and may just stand a chance most of the office staff and engineers are one of the above and grossly overpaid and get free cars need I say more?

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