BRITAIN’S car industry remains in rude health, industry leaders insisted, after Honda took the axe to hundreds of jobs to cope with a sales slump in Europe.
The Japanese giant is looking to cut 800 posts at its Swindon plant where it currently employs about 3,500, having added 500 to the workforce only a year ago.
It is the first time the group has been forced to reduce its headcount since it began manufacturing at the site in 1992.
Honda, which builds the Civic, CR-V and Jazz models in the UK, said it had begun a 90-day consultation period on the cuts, adding that it hoped to avoid compulsory redundancies.
Bosses blamed the move on a slump in sales across Europe, where demand for cars has fallen by one million in the past year. Buyers in debt-ravaged Greece, Italy and Spain have been particularly thin on the ground.
Industry body the Society of Motor Manufacturers and Traders (SMMT) described the news as very disappointing but said the longer-term prospects for the UK motor manufacturing sector “remain good”.
SMMT chief executive Paul Everitt said: “We hope that those affected will be able to take advantage of the opportunities we know exist throughout the UK sector and its supply chain.”
Earlier this week, the SMMT reported that sales of new cars in the UK topped two million last year, the best result since 2008. Scottish car dealers enjoyed their strongest sales in five years despite an end-of-year blip.
Britain’s car industry has been enjoying something of a renaissance with strong export sales of models from the likes of Jaguar Land Rover, Mini and Nissan to buoyant markets in Asia, eastern Europe and the United States.
Honda announced a £267 million investment programme at Swindon last September, creating 500 additional jobs because of an expected increase in demand as well as a new diesel engine line. Business Secretary Vince Cable visited the plant to mark the news.
The carmaker admitted yesterday that the expected increase in demand had not happened so it now predicted that annual production would remain at 150,000 for the next three years.
A spokesman for the Department for Business, Innovation and Skills said: “This will be a bitter blow to the workforce and the local area and we will be working with local partners to minimise the impact of the job losses.
“Times are tough in the European market but the automotive industry remains a major success story for the UK. Over the last two years global manufacturers including Nissan, JLR and BMW have invested £6 billion in the UK, safeguarding and creating new jobs.”
Tony Murphy, national officer with union Unite, said: “This is a hammer blow to UK manufacturing and to Swindon where Honda is a major employer.
“The reality is that over 1,000 jobs are going at Honda – it’s a disaster for manufacturing in the UK and for the local economy.”
Unite said more jobs were being lost as the company recently announced 325 cuts to temporary workers at the Swindon operation.