Honda UK workers vote in favor of 3% pay cut to save jobs
The numbers for the UK car industry in April point to a 50% drop in production, and factories that aren't shut down completely are being run at glacial paces. After closing its Swindon, England plant for four months, the choice Honda gave workers there fit the template of the times: take a pay cut or else 490 of you will be let go. The workers voted for the 3% drop in wages, while management gets a 5% reduction.
While everyone waits -- and prays -- for the scrappage scheme to show some results, the move keeps hundreds of people on the job. The workers will also get six extra days of leave, which could be a mixed blessing, but it's better than being out of work, which isn't.
[Source: BBC]
Reader Comments (Page 1 of 2)
Avinash machado 10:48AM (5/23/2009)
The UK workers seem to be more sensible than the UAW\CAW.
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Erik 10:55AM (5/23/2009)
For real! Imagine - the employees working WITH the manangement to benifit both worker and company. What a novel idea!
jpm100 11:20AM (5/23/2009)
As much of a problem child that is the UAW/CAW, a 3% pay cut which will probably be reversed once a few good years are seen doesn't really compare to the cuts being sought.
cFoo 2:20PM (5/23/2009)
Sensible people. It's too bad the same can't be said about their lazy and greedy North American counter part. And they wonder why American companies are outsourcing everything?
Yaroukh 10:56AM (5/23/2009)
3pct? well... sounds like good start in these days
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Dustin 12:17PM (5/23/2009)
And management gets a bigger 5% reduction. What a twist from the way it would go in the U.S.
Yaroukh 12:22PM (5/23/2009)
Bigger reduction for management does not make much sense... Management is the department that needs to work more these days. Workers, on the other hand, can not make the situation better by working more.
(No, I am nor a manager. :)
why not the LS2LS7? 2:41PM (5/23/2009)
This is a 3% reduction in number of hourly workers on top of a reduction in working hours for hourly employees.
They already halted production for 1/3rd of the year already. In this time, salaried workers (usually) still get paid. So from what I can tell, the hourly output is down 35% this year (33% plus 3% of 66%). So cutting management staff 5% seems quite possible.
This why I saw below these people will be furloughed again soon. Cutting staff (i.e hours worked) 3% is no replacement for cutting hours worked 33%. As long as demand is low these plants will have huge cutbacks in hours worked, in addition to any reduction in hourly workers.
Dustin 3:14PM (5/23/2009)
Guys, I think you are confused. There is no reduction in the number of employees - that is the point. The workers are taking a 3% cut in wages and the managers are taking a 5% cut in wages. And a reduction in wages does not mean they will working any less hard.
why not the LS2LS7? 5:27PM (5/23/2009)
You're right about the reduction in wages. I was emphasizing the costs will be reduced for hourly workers not just 3% (from the pay cut or reduction in staff) but by the shutdown time too. And I ended up misstating the 3% part.
But as to the question as to whether the workers will be working less, they will be. Every time the plant shuts down the hourly workers aren't working and don't get paid.
Sean 5:45PM (5/23/2009)
Paycuts are horrible, they effect you for the rest of your employment.
Furloughs (or however it is spelled) are the way to go.
Aloysius Vampa 11:03AM (5/23/2009)
Smart.
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Aloysius Vampa 11:07AM (5/23/2009)
I would do the same thing.
why not the LS2LS7? 11:13AM (5/23/2009)
Won't work.
No matter how cheaply you can make something, if people aren't buying it, you lose money on it. Once the cash for clunkers effect ends, these people will be furloughed again.
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2004m3driver 12:07PM (5/23/2009)
I'm sure you know all the ins and outs of running an auto factory. My personal speculation is this will withhold them long enough until things get better. Its more expensive to fire someone and retrain in the future then it is to and retain your experienced workers.
why not the LS2LS7? 12:51PM (5/23/2009)
I've surely been in a lot more auto factories than you. I grew up in Flint, Michigan and my father was a plant manager for GM.
Most of the workers in a factory are not terribly skilled, once they've been there a few years, they don't get any better at what they do. This is why all the auto manufacturers have recently been buying out the older (more highly paid) workers while keeping younger (lower paid) workers on.
Andrew 3:17PM (5/23/2009)
Even if your father was, you are not.
And you don't know much about European countries' social and welfare systems. The company and workers can get support to avoid permanent layoffs in ways GM factories in Michigan can't.
why not the LS2LS7? 5:30PM (5/23/2009)
Who said anything about permanent layoffs?
That would be the 3% reduction in staff, which was avoided by a 3% pay cut.
I said furloughs. That means extended plant shutdowns, which are temporary. The plant already shut down for 4 months this year, so don't go telling me about how it doesn't happen in Europe.
Tomac 12:29PM (5/23/2009)
That pic only reminds me of how much better looking the European Civic is compared to the U.S. version.
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jon 12:46PM (5/23/2009)
agreed
and as a separate comment, i think this is a great thing, everyone takes a small cut, and when you add it all up it counts for something