Honda To Reap Benefits Of Temporary Factory Closure
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By :
Thomas Pretty
Submitted:
2009-06-05 20:04:57 Number of Times Read: 13
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News that production staff at Honda's Swindon factory plant have returned to work after a four month closure again highlights the current recession that the UK is experiencing, but as some will perceive the closure as a negative move, in reality it has been more the opposite.
Rather than lay off a large section of their factory workforce, Honda chose to close the factory in order to save costs. A total of 1,300 workers took voluntary redundant with 3,400 employees staying on, accepting full pay for the first two months of closure and 60 per cent pay for the remaining two months, safe in the knowledge that they would be guaranteed a job when they returned to work as the factory reopened.
They also experienced a 3 per cent decrease in their wage for the next 10 months but many were not too concerned with this and are likely to be grateful to have a job during these uncertain times, especially when compared to Honda workers in Japan who have experienced a 10 per cent pay cut.
Honda have had to review their production output target from 290,000 vehicles to 113,000 units due to the four month closure but also because of sales forecasts, though Honda are hoping to experience a rise in sales, as are many other vehicle manufacturers, thanks to the Government scrappage scheme.
Also, Honda's continued involvement in the evolution of eco-friendly motoring through their hybrid technology is also likely to help rather than hinder sales, especially as Honda have recently released the Insight - the world's cheapest hybrid vehicle - onto the market.
The Insight has sold beyond all expectations in Japan, becoming the first hybrid vehicle to top the national sales list after it sold more than 10,000 units during the first month on the market - a remarkable feat given the state of the global economy.
So the Swindon factory closure should not be perceived as a bad thing as it has enabled Honda to let go far fewer employees than they could have. What with the Government scrappage scheme offering at least 2,000 pounds pounds discount off a brand new Honda, the Jazz will surely start to shift thanks to its economical engine and has recently been awarded a five safety star Euro NCAP rating.
With the Jazz and Insight set to prove popular, along with Honda cars already with an enhanced reputation such as the Civic, Accord and S2000, the Japanese company that appeared in trouble just a few months ago should ride this economic storm with ease. |
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Thomas Pretty is an financial journalist with many years of experience writing about the car manufacturing industry. Find out more about Honda at http://www.hondainchcape.co.uk/ |
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