February 19, 2019

UK deeply disappointed by Honda’s decision to close plant

Theresa May

Theresa May

 Britain on Tuesday said it was deeply disappointed by Honda’s decision to close its only British car plant.

Theresa May

“The UK is one of the leaders in the development of these technologies and so it is deeply disappointing that this decision has been taken now,” Business Secretary, Greg Clark, said.

“This is a devastating decision for Swindon and the UK. This is a commercial decision based on unprecedented changes in the global market,’’ Clark said.

Honda said it had informed employees about what it called its “proposal’’to close the Swindon plant.

“Honda of the UK Manufacturing has today informed associates (employees) of the proposal to close its Swindon vehicle manufacturing plant, at the end of the current model’s production life cycle, in 2021,” Honda said in a statement.

Similarly, Honda’s decision to close its only British car plant is not related to Brexit and is a product of global changes in the industry, the firm’s Europe’s boss said on Tuesday.

“This is not a Brexit-related issue for us. This decision has been made on the basis of global changes,” Honda Senior Vice President for Europe, Ian Howells, said.

He said that China, the U.S. and Japan were where the firm would focus its investments.

“Although… we were very clear on our Brexit position, we’ve always seen those as something we will get through,” he said.

On Monday, Japanese car-maker Honda announced the closure of its only British car plant in 2022,  with the loss of 3,500 jobs, a lawmaker said, in the latest blow to the UK car industry as Brexit approaches.

Honda built just over 160,000 vehicles at its Swindon factory in southern England in 2018, where it makes the Civic and CV-R models.

This accounted for a little more than 10 per cent of Britain’s total output of 1.52 million cars.

But it has struggled in Europe in recent years, and the industry faces a number of challenges, including declining diesel demand and tougher regulations, alongside the uncertainty over Britain’s departure from the EU, due in March.

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Justin Tomlinson, a Conservative lawmaker for Swindon, who voted for Brexit in 2016, said he had met with the business minister and representatives from Honda, who had confirmed the plans.

“This is not Brexit-related. It is a reflection of the global market. They are seeking to consolidate production in Japan.”

Japan has repeatedly warned it could pull investments in Britain, which it had seen as a gateway into Europe, if London does not secure a Brexit deal favourable for trade.

The recently agreed EU-Japan trade agreement means tariffs on cars from Japan to the continent will be eliminated, while Britain is struggling to make progress on talks over post-Brexit trade relations with Tokyo.

Honda’s announcement would come just over two weeks after rival Japanese car-maker Nissan canceled plans to build its X-Trail sport utility vehicle in Britain.

“The car industry in the UK over the last two decades has been the jewel in the crown for the manufacturing sector – and now it has been brought low by the chaotic Brexit uncertainty,” said Des Quinn, National Officer for the Automotive Sector at Britain’s biggest Trade Union Unite.

Honda said in 2018 it would shut its British operations for six days in April to help counter any border disruption from Brexit.

It was also preparing to front-load some production at its plant to ship overseas or build up inventories.

Nissan, Honda and a third Japanese car-maker, Toyota, together account for roughly half of the cars built in Britain.

Honda, which has been building more cars for sale outside of Europe in recent years, said earlier this month its production volumes at Swindon would be reduced to 570 cars per day and that it would make job cuts.

“This reduction in volume will not have any impact on our permanent resource levels, and is in line with our current production plans,” the company said. (Reuters/NAN)