fDi Markets Newswire:

Home / Sectors / Automotive OEM / Honda’s retreat a “bitter blow” for the UK

UK business secretary Greg Clark expressed his disappointment with the Japanese carmaker's decision to shut its Swindon plant in 2021. Alex Irwin-Hunt reports

Honda’s decision to shut down its sole European manufacturing plant in Swindon, 100km west of London, by 2021 as part of wide organisational changes caused further concerns among cabinet members in London as their efforts to reassure businesses in the current Brexit uncertainty are increasingly falling on deaf ears.

“This news is a particularly bitter blow to the thousands of skilled and dedicated staff who work at the factory, their families and all of those employed in the supply chain,” said UK business secretary Greg Clark.

Although Honda will keep its European HQ located in Bracknell, UK, its decision to close its Swindon plant could lead to the loss of 3500 British jobs, as the company announced that consultation of potentially affected employees will begin immediately.

“In light of the unprecedented changes that are affecting our industry, it is vital that we accelerate our electrification strategy and restructure our global operations accordingly,” said Katsushi Inoue, Honda’s chief officer for European Regional Operations and president of Honda Motor Europe.

“As a result, we have had to take this difficult decision to consult our workforce on how we might prepare our manufacturing network for the future. This has not been taken lightly and we deeply regret how unsettling today’s announcement will be for our people,” he added.

The Swindon plant currently produces 150,000 Honda Civics annually – almost 10% of the total UK car production – and will close at the end of the current model’s production lifecycle.

Honda also announced plans to restructure its 38,000 unit-producing operations in Turkey, as it ceases manufacturing of the current Civic sedan model in 2021.

Rivals retreat

Japanese carmakers and manufacturers invested heavily in the UK over the past 20 years as they saw the country as a stable, business-friendly gateway to the European Union market. Today, they employ around 150,000 people around the country. However, as soon as Brexit negotiations stalled, they issued numerous warnings regarding their long-term plans should a hard-Brexit make their British operations unprofitable. The Japanese prime minister Shinzo Abe admitted that “we truly hope that a no-deal Brexit will be avoided, and in fact that is the wish of the whole world” during an official state visit in London in January.

Honda’s Japanese peer Nissan announced earlier in February that it would no longer build its X-Trail sport-utility vehicle at its plant in Sunderland, the biggest manufacturing facility in the UK.

But it is not only the Japanese carmakers feeling the Brexit chill.  

In January, Jaguar Land Rover announced that it would cut 4500 jobs from its global workforce, although predominantly in the UK, as the company follows its £2.5bn ($3.2bn) cost-saving programme.

Ford also also announced plans in January to cut thousands of jobs across its European operations, claiming that its UK sites in Bridgend and Dagenham will face more dramatic cuts in the case of a no-deal Brexit.

This article is sourced from fDi Magazine
fDi Magazine

The fDi Report 2018: Free Download

Crossborder investment monitor

fDi Markets is the only online database tracking crossborder greenfield investment covering all sectors and countries worldwide. It provides real-time monitoring of investment projects, capital investment and job creation with powerful tools to track and profile companies investing overseas.

Click here to find out more about fDi Markets

Corporate location benchmarking tool

fDi Benchmark is the only online tool to benchmark the competitiveness of countries and cities in over 50 sectors. Its comprehensive location data series covers the main cost and quality competitiveness indicators for over 300 locations around the world.

Click here to find out more about fDi Benchmark

Research report

fDi Intelligence provides customised reports and data research which deliver vital business intelligence to corporations, investment promotion agencies, economic development organisations, consulting firms and research institutions.

Find out more.