Honda Confirms Plan to Leave Britain as Brexit Looms

The Japanese automaker, which employs 3,500 at its Swindon, England, plant, is set to close the site by 2021. Honda has become the latest business to make plans to leave Britain as global forces reshape the car industry and the country prepares to exit the European Union. Honda will close its plant in Swindon, England, which employs 3,500 workers, by 2021, it confirmed on Tuesday. The factory, which produces about 150,000 cars a year, will close once its current line of Civic cars comes to an end. “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,” Katsushi Inoue, the chief officer for European operations, said in a statement. The decision was a “devastating decision for Swindon and the U.K.,” Greg Clark, Britain’s business secretary, said in a statement. “The 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,” Mr. Clark said, adding that he would convene a “task force” to keep the employees in work. Justin Tomlinson and Robert Buckland, two members of Parliament representing the Swindon area who had been in contact with Honda, said in a joint statement that they were “disappointed and surprised” that the plant would be gone in two years. “Honda have told us today that they will be consulting with all staff and there is not expected to be any job losses or change in production until 2021,” the lawmakers said in an emailed statement on Monday. “All European market production is being consolidated to Japan, where the company is based.” They said production in Turkey would also be affected. Honda follows other companies that have retrenched in the face of sluggish markets, tougher environmental regulation and challenges from deep-pocketed technology companies that are pursuing electric and autonomous driving cars Last month, Ford said it was cutting thousands of jobs across Europe as emissions rules and declining demand ate into its profits. Another American carmaker, General Motors, pulled out of Europe in 2017 after persistent losses in the region. But the losses in Britain, coming as the country tries to leave the European Union, have been striking. Nissan said in early February that it would be producing the next generation of its X-Trail SUV at its Kyushu plant in Japan, rather than at its factory in Sunderland, England. The plant will continue to manufacture other models. Like Nissan, Honda stands to benefit from a new trade deal between the European Union and Japan, which will make it easier to produce cars in Japan for export to the bloc. Their production lines in Japan will also be closer to markets viewed as having greater growth potential, like China and Indonesia. The sales market is changing across the globe. Car sales to individual customers appear to have peaked in the United States last year. An economic slowdown in China has deflated sales there. Silicon Valley tech companies are increasingly competing for talent among manufacturers. “All of that is taking a huge amount of resource out of car companies,” said Peter Wells, a professor at the Centre for Automotive Industry Research at Cardiff Business School. “They’ve got to access those new markets, restructure their operations; it’s an enormous burden financially. It’s putting strain on the whole sector.” “It’s all going on around this industry and it’s proving to be a turbulent strategic time for the participants,” he said. The continued stalemate over Brexit has made it more difficult for businesses to plan their operations past March 29, the day of departure. Investment in the country’s auto industry plummeted by half in 2018, prompting a recent plea from the automakers’ trade association. “Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from ‘no deal,’” said Mike Hawes, the organization’s chief executive, referring to the prospect of the country leaving the European Union without an agreement over the terms of departure. The Honda decision is one of a series of unhappy announcements in Britain in recent months. The British carmaker Jaguar Land Rover has said it would be cutting 4,500 people from its work force because of “geopolitical and regulatory disruptions.” Dyson, the appliances company known for its vacuum cleaners, is moving its headquarters from southwest England to Singapore as it prepares to bring an electric vehicle to the market. Nissan’s chairman in Europe, Gianluca de Ficchy, said that the company’s decision to adjust its assembly line was not based solely on Brexit but “the continued uncertainty around the U.K.’s future relationship with the E.U. is not helping companies like ours to plan for the future.” Honda’s operations in Britain are highly dependent on being connected to the European Union; the company had already said it would close its factory temporarily in case no-deal Brexit triggered chaos. About 40 percent of the components that Honda uses at the Swindon factory come from the European Union, while 35 percent of its exports are sent to the region, according to Patrick Keating, the government affairs manager at Honda Motor Europe. Mr. Keating told a parliamentary committee in 2017 that Honda had “about 2 million components a day coming in on 350 trucks” from Europe. digg stumbleupon buzzup BlinkList mixx myspace linkedin facebook google yahoo