It seems that 2012 was the year for the UK car manufacturing industry, with increasing numbers of international brands choosing to invest in the skill and expertise of the country’s workforce.
Firms such as Jaguar Land Rover and Vauxhall chose to expand existing sites by almost doubling employee numbers, while others such as Japanese giant Nissan unveiled plans to make their UK bases the hub from which European operations would be conducted.
These factors combined pointed to a very bright future for the UK manufacturing industry at a time where not many sectors of the economy were enjoying such a boom.
Unfortunately, it appears that the manufacturing bubble may be about to burst – but not due to a lack of skilled workers or Government investment as the experts predicted. No, this issue is not something within the bounds of UK control, as it is directly impacted by the on-going troubles in the Eurozone.
As the Euro continues to struggle, disposable income for our neighbours across the Channel is being increasingly squeezed. This is forcing families across the continent to make drastic cutbacks in their budgets – meaning that the luxury of a new car has become one which few can afford, especially in southern countries such as Spain, Italy and Greece.
Honda has been the first car manufacturer to publicly acknowledge the issues the Eurozone Crisis is presenting to the automotive industry, as it has revealed plans to cut up to 800 jobs at its Swindon plant “by Spring”. This will be the first time the Japanese firm has had to reduce the number of UK workers it employs since first establishing itself in the country in 1992.
While Honda is keen to highlight that compulsory redundancies will be avoided at all costs, this news will surely be a blow to the 3,500 workers currently employed at the Swindon plant. In fact, it was only last year that the factory created a further 500 jobs as part of an investment programme worth £267 million – making the coming redundancies even more of a shock.
Honda Motor Europe’s executive vice president, Ken Keir, stresses that any actions taken by the company will be taken to ensure long-term stability for existing employees.
He says; “Sustained conditions of low demand in European markets make it necessary to realign Honda’s business structure.
“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.”
Unions have already been notified of the upcoming changes and management at the Swindon plant will be holding discussions with workers over the next few weeks to try to negotiate a suitable resolution. However, this will be little consolation to the employees who will find themselves without work so early into the New Year.
Do you think the knock on effect from Europe will limit the opportunities for Britain’s car manufacturing industry, or will demand boom as soon as the Euro picks up? Should the UK be looking at further flung export markets in order to allow for expansion and improved trade routes, or would the cost of mass exporting thousands of vehicles outweigh the benefits of manufacturing them here in the UK?
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