Honda plant closure could affect 7,000 jobs in 'the supply chain'

22 February, 2019, 06:44 | Author: Frank Williams
  • Honda to close Swindon plant in 2022 putting at risk 3,500 jobs | Latest Brexit news and top stories

Whilst Honda's decision to close its site in Swindon, southern England - its only European vehicle plant - is not Brexit related, its Japanese rivals have cited concern over this issue in their recent announcements.

'The auto industry has been the jewel in the crown for the manufacturing sector and now it has been brought low by chaotic Brexit uncertainty created by the rigid approach adopted by Theresa May'.

Honda also announced Tuesday it will cease Civic sedan production at its plant in Turkey in 2021, as part of global restructuring, although that plant will continue to operate.

"We've always seen Brexit as something we'll get through, but these changes globally are something we will have to respond to".

Nissan had planned build a plant to make the X-Trail sport utility vehicle in Sunderland, Britain, but those plans were canceled because of Brexit uncertainty.

But it has struggled in Europe in recent years, and the industry faces a number of challenges including declining diesel vehicle demand and tougher regulations alongside the uncertainty over Britain's departure from the European Union, due next month. Swindon is now Honda's only production base within the EU. The factory built just over 160,000 Civic cars a year ago, which were shipped to 70 countries.

Brexit is understood to be a major factor in the decision, with the manufacturer concerned by the possible imposition of new tariffs once the United Kingdom has left the EU.

More news: Pogba insists Manchester United players 'trust' Solskjaer after 'beautiful' Chelsea win

Yesterday local Tory MP Justin Tomlinson said he had been assured that the closure "based on global trends and not Brexit" - however, the timing of the announcement will be viewed as a further blow to the UK Government with just 38 days to go until it leaves the bloc. It's understood that now, with no financial penalties for making cars in Japan and exporting them to Europe, the last business case in favour of maintaining HUM has been removed. Instead it says the switch to electrified cars (including pure-electric, plug-in hybrid and "self-charging" hybrids), in response to "unprecedented changes in the global automotive industry" are behind the move.

If Honda's decision is made final, it will add to a growing list of foreign manufacturers that have chose to scale back production in the UK.

The move to close the Swindon plant will cut 3,500 jobs, and Honda said consultation activities will begin today for affected employees.

UK-made products also risk being disadvantaged by a new treaty that will gradually eliminate tariffs on Japanese imports to the European Union, though Tomlinson, a pro-Brexit Tory, said the divorce was not a factor in Honda's move.

"Alastair: the senior vice president in Europe has said it's nothing to do with Brexit".

And Japanese officials have reportedly become frustrated with their British counterparts as they negotiate a potential post-Brexit trade deal.

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