Thousands of Honda employees have returned to work at the company’s Swindon plant after production was halted for four months in response to the struggling car market. All 3,400 of the returning workers will be taking a pay cut until 2010 but are pleased that their jobs are finally guaranteed after the uncertainty of the last four months.
The factory was forced to close while the company decided on the best way of dealing with the problems caused by the global recession and the effect the economic downturn has had on the number of car sales and contract hire agreements. The car industry has been one of the worst affected and many car manufacturing companies are struggling to make ends meet, but the situation at Honda and how they have recovered could stand as an example to other companies who are still struggling. Tamporarily suspending production at the Swindon plant has allowed them time to make important decisions about the future of the business as well as perform long-planned maintenance work. During the four months downtime the production lines were stripped down and rebuilt, and they took the opportunity to redecorate the whole plant, where possible by employees who had the specialist skills required for the job.
But it’s not all good news. A further 1,300 Swindon employees chose to take voluntary redundancy when the factory closed, many of whom still have not managed to secure alternative employment. And although the employees returning to work now know their jobs are secure, they have agreed to a pay cut of 3%, or 5% for those in management positions, for the first 10 months. The reopened factory is currently only running at 50% capacity, with a projected output of 113,000 vehicles in 2009, less than half the original intended number of 228,000.
In short, it’s a small victory but the company is not out of the woods yet, Honda car leasing and sales figures will have to increase significantly over the next few months if they want to avoid any further disasters. The Swindon factory is due to start production of the new Honda Jazz model in September, which should help to boost sales and work towards securing the long-term future of the plant. Not to mention as the economy begins to recover buyers will be taking advantage of low car prices as across the board from Honda to Mercedes, car leasing and purchase prices are cheaper than ever.
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