Honda Motor Europe will slash 800 jobs at its Swindon manufacturing operation in a bid to ensure the long-term sustainability of its future business, according to a company announcement issued on Friday morning.
The company stated that sustained conditions of low demand in European markets had made it necessary to re-align Honda's business structure although it reinforced its commitment towards retaining its operation in the UK over the long-term.
Over the past five years, the European car market has contracted considerably as unemployment levels, combined with financial woes caused by the Eurocrisis, have contributed to declining demand for car purchases. The value of all new car sales across the Eurozone was £12.6m in 2012 compared to £16.2m in 2007.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Honda is now expected to conduct a 90-day consultation process with its associates with the option of voluntary redundancy to be potentially on the table for some staff.
Following the proposed reduction of the workforce, some 2,700 workers are expected to remain at the Swindon branch.
Ken Keir, Executive Vice President at Honda Motor Europe, commented: "Honda remains fully committed for the long-term to its UK and European manufacturing operations. However, 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."
Honda is listed on the Tokyo Stock Exchange.
MF
-
Is a mortgage in retirement always a bad idea?A mystery shopper exercise shows high street lenders are “shunning” retirees looking to take out a mortgage. Are they right to do so?
-
Three funds to consider as UK small caps trade at 30% discountUK small caps have been unloved for some time, but a shifting economic environment could give them a boost
