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Thousands of workers at Honda’s Swindon factory have returned to work 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 motoring industry has been hit hardest of all and almost all car manufacturers are having difficulty staying afloat, but Honda’s experience could serve as a good example to the other brands still hanging in the balance. Their decision to temporarily close the Swindon factory has allowed them time to make important decisions about the future of the business as well as complete maintenance work that had been in the pipeline for a while. The production lines were stripped and rebuilt during the months the factory was closed, and the entire plant was redecorated, wherever possible using existing employees with the relevant specialist skills or training. 

But not everything is good news. 1,300 workers from the Swindon factory chose to opt for voluntary redundancy when the factory closed, many of whom are still out of work. 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 duration of the next 10 months. The plant is only running at 50% of its normal capacity, with a projected output of 113,000 vehicles in 2009, less than half of the original 228,000 estimate.

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 new Honda Jazz model, due to start production at Swindon in September, should increase sales and give a clearer picture of the long-term future of the Swindon factory. 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.