Japan's Honda to shut UK plant, 3,500 jobs at risk
February 19 2019 11:44 AM
A lorry with car carrier trailer leaves the Honda car plant in Swindon, Britain
A lorry with car carrier trailer leaves the Honda car plant in Swindon, Britain

AFP/Tokyo

Honda announced Tuesday it would shut a major plant in Britain, putting 3,500 jobs at risk as the auto manufacturer became the latest Japanese firm to downsize operations as Brexit looms.

The factory in Swindon, southwest England, is Honda's only EU plant and has produced the manufacturer's ‘Civic’ model for more than 24 years, with 150,000 units rolling off the line annually.

The plant will shut in 2021, Honda announced, ‘at the end of the current model's production lifecycle’.

The decision ‘has not been taken lightly and we deeply regret how unsettling today's announcement will be for our people,’ said Katsushi Inoue, chief officer for European regional operations, in a statement.

The firm blamed ‘unprecedented changes in the global automotive industry’ for the decision but it comes amid investment uncertainty in Britain ahead of the country's exit from the EU.

Last year, Honda Europe's senior vice-president Ian Howells said a ‘no-deal’ Brexit would cost the firm million of pounds but it was nevertheless preparing for such an outcome.

Analysts say that while Brexit was almost certainly a factor, other reasons were likely to have played a part, including a massive EU-Japan free-trade agreement recently signed and the wider struggles of the car industry.

Local MP Justin Tomlinson tweeted ahead of Tuesday's announcement that the decision had been made ‘based on global trends and not Brexit as all European market production will consolidate in Japan in 2021’.

And speaking ahead of the formal decision, finance worker Sue Davis, 49, told AFP the move would be ‘devastating’ for the area.

‘I think Swindon's finished without Honda. My ex-husband works there, has done for 20 years. He's going to be without a job, so I just think it's really, really bad news.’

- 'Just in time' -

Earlier this month, Nissan axed production of the X-Trail SUV in the Brexit-backing northeast city of Sunderland, despite government assurances over the consequences from the EU exit.

Nissan Europe chairman Gianluca de Ficchy said then that the cuts were made ‘for business reasons’ but admitted that ‘the continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future.’

Auto giant Toyota also warned in February there would be no way to avoid a negative impact in the event of Britain crashing out of the EU without a deal.

Toyota executive vice-president Shigeki Tomoyama noted that the firm's assembly plant in Burnaston, central England, which produces 600 vehicles per day, operates under the ‘just-in-time’ system that relies on a smooth flow of components from the EU.

‘We will have to halt the plant if the car parts are not brought in’ from the continent, Tomoyama warned.

Japanese electronics giants Sony and Panasonic, as well as several banks, have moved some of their operations out of Britain since the 2016 referendum that set Brexit in motion.

Prime Minister Shinzo Abe pleaded against a no-deal Brexit in recent talks with his British and German counterparts, telling Theresa May last month: ‘We truly hope that a no-deal Brexit will be avoided and in fact this is the... wish of the whole world.’

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

Britain is due to leave the EU on March 29, but its parliament last month rejected a draft divorce deal May negotiated with the bloc, prompting fears the country could crash out without an agreement next month.



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