Honda's New Announcement Will Result to Closure

Roman Schwartz
February 23, 2019

LONDON/TOKYO-Honda will close its only British vehicle plant in 2021 with the loss of up to 3,500 jobs, a major departure of Japanese investment announced just over a month before the United Kingdom is due to leave the European Union.

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 departure from the European Union next month.

Honda said the move was due to global forces that are re-shaping the auto industry and the need to launch electric vehicles, but said it had nothing to do with Brexit.

Mr Hachigo's comments that the decision was not related to Brexit are unlikely to take the sting out of the job losses for the British public, or politicians, Reuters said.

Honda has confirmed its plan to leave Britain as unprecedented global changes affect the vehicle industry and the country prepares to exit the European Union.

The business secretary Greg Clark is to bring together a taskforce to ensure skills and expertise are retained following the closure of Swindon's Honda plant.

The restructure will also impact Honda's automobile operations in Turkey, where it produces 38,000 units per year.

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About 90 percent of the autos made in Swindon are for export and the total accounts for 10 percent of British vehicle production.

"While Brexit is not mentioned by the company as a reason for the announcement, we believe that the uncertainty that the Tory government has created by its inept and rigid handling of the Brexit negotiations lurks in the background", Unite National Officer for the automotive sector Des Quinn said in a statement.

"If the government had delivered a strong and stable Brexit that protected the economy and jobs, we may well have been in a very different position today".

Earlier this month, Japan's Nissan announced that it would not build a new SUV at its plant in Sunderland, England, as previously planned. Surely the U.K.'s plan to leave the European Union is going to disrupt commerce across the board, including the auto industry.

Analysts said an EU-Japan trade agreement signed recently had likely also played a part in Honda's decision.

A conservative lawmaker for the Swindon, Justin Tomlinson, who voted for Brexit in 2016, said that he had met with the Honda representatives and the carmaker had confirmed their plans of exits.

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