Honda announced plans to close its manufacturing plant in Swindon. It means the loss of 3,500 jobs.
Honda will close its only auto plant in Great Britain in 2021 becoming the latest automaker to say it was leaving and turning what was once a trickle into a torrent of closures due to Brexit. The facility makes the Civic.
The Swindon plant closure means the loss of 3,500 jobs and a tenth of all vehicles produced in Britain. However, despite early reports, Honda officials claim Brexit had little to do with the move. Honda officials said the company was focusing manufacturing in the areas where it has the largest sales, and Europe isn’t one of those.
“We had to consider the rise of electrified vehicles, and the different speeds at which electric vehicles will be taken up in North America and Europe,” said Honda Chief Executive Takahiro Hachigo. “This decision was not informed by Brexit.”
Honda built the Civic in Britain and Turkey — until now. Most of the Civic hatchbacks built in Britain are for export to the United States rather than Europe. Europe’s expected faster take-up of electric vehicles could be supplied from China and Japan, where Honda already plans to produce at scale.
(Ford warns Britain no-deal Brexit could mean UK departure. Click Here for the story.)
The Swindon facility exported much of its Civic production, including all of the hatchbacks sold in the U.S.
Despite that, the timing of the announcement only adds to the ongoing hand-wringing related to the “no-plan” Brexit, which is set to occur in just 38 days. Prime Minister Theresa May continues to suggest that a plan will come together, but automakers and leaders of the opposition party aren’t so confident.
In fact, Honda’s move comes after several warnings from Japan that it would pull investments if they are no longer economically viable after Britain leaves the European Union. The automaker joins a slew of automakers that have already announced plans to leave Britain or that are considering a move.
Honda’s announcement comes just over two weeks after fellow Japanese carmaker Nissan reversed a decision to build a new SUV in Britain. The company sent a letter to employees saying it would not build the X-Trail SUV in Britain and was, instead, moving production back to Japan.
(Click Here for details about Jaguar Land Rover’s plans to eliminate 4,500 jobs.)
Ford may pull operations from the UK if the Brexit goes poorly, the company warned.
Ford executives told British Prime Minister Theresa May during a conference call this week that the automaker might have to use alternative sites outside Britain. This is after the automaker already announced plans to lay off 1,000 workers.
In January, Jaguar Land Rover, the UK’s biggest carmaker, said it would cut 4,500 jobs in the UK, citing geopolitical issues, regulatory disruptions and Brexit uncertainty. Toyota has also urged the government to avoid a no-deal scenario.
Toyota could be forced to halt production at its Midlands U.K. factory in the event Britain leaves the European Union without a deal. Toyota’s Burnaston car plant produced 150,000 vehicles last year, with about 90% of the units shipped to the EU, while components come the other way. The factory has 2,500 employees, according to the company’s website.
(To see how the uncertainties of Brexit are impacting other automakers, Click Here.)
The UK is set to leave the EU March 29, without a deal unless May can convince the bloc to reopen the divorce deal she agreed to in November and then sell it to skeptical British politicians. One of the big sticking points is whether there would be border checks along the frontier between Ireland and Northern Ireland, which is part of the UK. Automakers are already getting hit by the fallout of the move with an increase in prices for parts and materials coming into the country.