Wed, Feb 20, 2019 - Page 10 News List

Honda planning to shut UK factory

‘GLOBAL TRENDS’:The closure of the car factory that employs 3,500 people would affect thousands more jobs in Honda’s UK supply chain, a union representative said

Bloomberg

A truck with car carrier trailer leaves the Honda Motor Co car plant in Swindon, England, on Monday.

Photo: Reuters

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.

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.

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