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Honda announces four-month closure of car plant

Honda has today announced a four-month closure of its Swindon car manufacturing operation in the UK as demand for new cars hits new lows. The workers at the Swindon plant will receive full pay for two months and 60% of their full pay for a further two months at which time the plant is expected to reopen. However, Honda has today reduced full-year profit forecast by 57% which does not bode well for the future of the UK car manufacturing industry.

This move by Honda is sure to place further pressure on the UK government who have been criticised for a lack of action with regards to the UK car manufacturing sector. The recent £2.3 billion package announced included various loans from the EU and a £1 billion liquidity lifeline for the sector which is being cut adrift by the UK banks.

The main problem is that as the UK recession deepens the acquisition of new cars is well down the list of many consumers and likely to stay that way for some time to come. Under these circumstances it is understandable that UK banks are reticent about opening further liquidity lines to a business sector which would appear in serious difficulty.

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