Honda to Cut 800 U.K. Jobs as European Car Market Shrinks
Honda Motor Co. (7267), Japan’s second- largest carmaker by market value, said it will eliminate as many as 800 jobs in the U.K. this year as the European auto market may shrink for the sixth year in a row.
The manufacturer will start talks with labor representatives for the cutbacks, which it plans to implement by about the second quarter, Tokyo-based Honda said today in an e- mailed statement. The company’s plant in Swindon, England, has a workforce of 3,500 people, said Fiona Cole, a spokeswoman.
“These conditions of sustained low industry demand require us to take difficult decisions,” Ken Keir, executive vice president of Honda Motor Europe, said in the statement. “We are setting the business constitution at the right level to ensure long-term stability and security.”
Car sales across Europe are declining as unemployment and a recession in the countries using the euro discourage consumers from making large purchases. PSA Peugeot Citroen (UG), Europe’s second-biggest carmaker, forecast on Jan. 9 that the market will shrink by as much as 5 percent this year.
Among Japan’s three biggest carmakers, Honda is the least reliant on Europe, with the region accounting for only about 7 percent of total revenue, compared with about 11 percent at Toyota Motor Corp. (7203) and 15 percent at Nissan Motor Co. (7201), according to estimates at BNP Paribas SA.
Honda’s 11-month sales in Europe fell 6.2 percent from a year earlier to 131,348 vehicles, propelled by a 15 percent drop in November. That compares with a 7.2 percent industrywide contraction in the period to 11.7 million cars, according to the European Automobile Manufacturers’ Association.
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