MANUFACTURING COLLAPSE – Nissan cuts production

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Nissan announced a halt to production at its Sunderland plant for a fortnight and shorter working days for three weeks during October and November yesterday, after a fall in sales of its Micra and Note models.

The company claimed that the jobs of the 5,100 workers on permanent contracts at the plant are not threatened, but that 300 on fixed-term contracts face the sack.

In Japan, Nissan is cutting output by 65,000 vehicles and its plant in Barcelona will close for a week and operate shorter working days for eight weeks; last week, Nissan announced 1,680 job cuts in Barcelona.

Honda also announced output cuts last night, saying it will reduce production of large-sized cars by 22,000 at its Swindon factory between November and March.

These were only the latest in an accelerating trend of cuts in production in the car industry.

At the beginning of October, Toyota halted the night shift at its Derby works, Ford announced a four-day week until Christmas at its Transit van plant in Southampton, and JaguarLandRover (JLR) did the same at its plant in Solihull.

JLR, which employs about 15,000 people in the UK, said it will seek voluntary redundancies from its plants on Merseyside, in Birmingham and in Solihull.

In Crewe, Bentley’s factory has moved to a three-day week, while General Motors Luton is already on short time and is closing down for next week.

The Confederation of British Industry announced a collapse in new orders and the sharpest single-quarter fall in manufacturing confidence in 28 years yesterday.

In the past three months, just 16% of firms had seen a rise in new orders while 46% said they had fallen, the CBI’s Industrial Trends survey said.

In total, 60% of the 525 manufacturing firms which took part in the survey were less optimistic about the general business situation than three months ago.

The drop in new orders was largely due to weaker domestic demand, which recorded its sharpest fall since 1992.

Many firms said they are planning to reduce spending on machinery and buildings over the next year and the number looking to cut back is the highest since the early 1980s; 9% said output was likely to be limited by credit or finance difficulties in the coming three months.

The CBI predicted 23,000 manufacturing jobs will be cut in the third quarter and that this number will increase to 42,000 in the fourth quarter.

Meanwhile, firms’ perceptions of their total order book levels deteriorated over the quarter to their lowest point since 2003.