Honda's four-month break to begin

This is the headline on BBC news today - click on the link to watch the video.

http://news.bbc.co.uk/1/hi/business/7859861.stm

Honda is to close its UK base for four months after Friday's shifts are over.

The halt will affect just over 3,000 of the 4,000 employees, who will receive their full basic pay for the first two months, but around 60% thereafter.

The shutdown at its Swindon base is thought to be one of the longest in Britain's recent industrial history.

The move is in response to the downturn in the UK car market. On Friday the Japanese car company said global third quarter net profit had dropped 89%.

On Tuesday, Business Secretary Lord Mandelson outlined a package of government support for the UK car industry potentially worth up to £2.3bn.

BBC business reporter John Moylan said many motor manufacturers have cut production in the face of collapsing demand, but none had gone as far as Honda.

Honda has said there are no plans for redundancies and that it intends to "safeguard employment" for workers who want to stay at the company.

But it is understood that more than 1,000 staff have signed up for a voluntary severance package and some have already left the business.

When staff return on 1 June, they will be making fewer vehicles as production, which was at around 240,000 vehicles a year, will resume at half that level.

Honda, which employs 4,200 people in the UK and exports the Civic to 60 countries worldwide, has also cut 3,100 temporary jobs in Japan and reduced global production by 56,000 vehicles.

Also on Friday, Honda said that its net profit for the three months to December plummeted 89%.

The company made a net profit of 20.24bn yen ($226m; £158m), far lower than the 200bn yen it made in the same period the year before, prompting the company to cut its annual forecast by more than 50%.

The group now expects net profit for the year to March 2009 to be 80bn yen, less than half its earlier forecast of 185bn yen.

Bentley, Vauxhall and Jaguar Land Rover have all stopped production or cut the working week as demand for their cars fall.