As a result of the bad sales figures, Honda has created a program of cost cutting measures in North America. Honda employs more than 30,000 workers in the US and has already announced 3,100 job cuts and a reduced production by 56,000 vehicles in Japan.The program includes five factors. First of all, they will cut pay. Secondly, factories will be closed for 13 days. Further, Honda will reduce its production by 62,000 vehicles. Fourthly, bonuses will be cut. Finally, an improved retirement packages will be offered, but basis pay will not be changed.
Comparing to March 2008, the sales figures in Japan were 24.5% higher than March 2009. But Honda is not the only carmaker who’s suffering from the financial crisis. The situation of other Japanese carmakers is worse. For example, the sales figures of the biggest carmaker of the world, Toyota, decreased 31.9%. Toyota took measures in the UK; employees have to work less hours. This resulted in a basis pay cut of 10%. Toyota also decided to close its production plant for four months.
The measures taken in the US are less drastic. Toyota only announced production cuts at several plants hoping to reduce its stock of cars.
According to me, Honda and other carmakers hadn’t no other choice to take these measures. These area is suffering from the economic crisis. Decisions have to be taken to make the situation of today better. These measures have bad consequences, but in my opinion everything is better than a failure of a carmaker.
Source: http://news.bbc.co.uk/2/hi/business/7975920.stm
I do not agree completely with Hanne. I think it’s the job of the government to avoid situations like this because this is a disaster for a lot of people although it is positive for the car constructing company that it is not bankrupt. But the government has to come with a new plan that works like I already said in my blog from this week.
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