Honda Motor Co plans to close its factory in the UK in the biggest blow yet to the British auto industry already buckling under thousands of job cuts and the loss of key models in the run-up to Brexit.
The site in Swindon, about 129km west of London, is the nation’s fourth-largest auto plant and employs about 3,500 workers and is where the Honda Civic hatchback is made.
Production for Europe would be consolidated in Japan in 2021, British lawmaker Justin Tomlinson, who represents North Swindon, said on Twitter.
Photo: Reuters
Honda also plans to cease production in Turkey, where the company makes the Civic sedan, he said.
Honda is not the source of media reports on the plant closure, Teruhiko Tatebe, a Tokyo-based spokesman for the automaker, said by telephone.
The UK has long been a Japanese hub for European auto production, with Honda, Nissan Motor Co and Toyota Motor Corp owning three of the country’s six largest automaking factories.
That has quickly unraveled, with Nissan this month reneging on plans to build the X-Trail sport utility vehicle in Sunderland — partly due to the unresolved status of EU-UK trade after Brexit.
UK-made products also risk being disadvantaged by a new treaty that will gradually eliminate tariffs on Japanese imports to the EU, though Tomlinson, a pro-Brexit Tory, said the divorce was not a factor in Honda’s move.
“They are clear this is based on global trends and not Brexit,” Tomlinson said. “Honda will be consulting with all staff and there is not expected to be any job losses or changes in production until 2021.”
The EU-Japan Economic Partnership Agreement, in force since Feb. 1, ensures that the bloc’s 10 percent tariff on Japanese car imports will be reduced to zero over the next 10 years.
The treaty makes it easier for Japanese automakers to localize production at home for sale in the EU, consulting firm LMC Automotive said in a report this month.
The UK is most at risk because almost half of the cars made in the country are Japanese-branded and Japanese automakers want to increase utilization of plants at home.
“Should Britain leave without a deal and WTO tariffs are applied to UK vehicle exports, the same cars made in Japan may well end up costing less to import into the EU than those produced just over the Channel in England,” LMC director of global production forecast Justin Cox said in the report released on Monday last week.
The UK industry has already been battling Brexit-related slowdown, potential tariffs and supply bottlenecks ahead of the exit from the trade bloc on March 29.
UK lawmakers have yet to find a solution to avert a no-deal split from the EU.
Ford Motor Co, in announcing thousands of job cuts in Europe, last week said a hard Brexit would be “catastrophic” for the UK auto industry and its engine-production facilities.
Jaguar Land Rover, Britain’s biggest automaker, last month said it would scrap 4,500 positions in response to a sales slowdown blamed on several reasons, including Brexit.
PSA Group’s Vauxhall Ellesmere Port site is in doubt as it mulls plans for the next Astra.
The Unite union, which represents workers at the Swindon plant, is seeking clarification from Honda, Des Quinn, national officer for the automotive sector, said in an e-mail.
The closure, the biggest since 2005, would affect thousands more jobs across Honda’s UK supply chain, he said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to