Honda expected to announce Swindon plant closure


Nissan, Toyota and Honda were encouraged to come to Britain in the 1980s as a pro-business gateway to the European Union and have helped turn around an ailing domestic vehicle industry. However, in January 2019, Honda said it would pause production for six days in April to prepare for potential Brexit disruptions.

The Swindon plant, home of Honda UK Manufacturing (HUM), has been operating at around half-capacity for several years. Just two weeks ago, Nissan officially gave up on its plans to produce its X-Trail in the country.

Other auto makers in Britain have warned that a no-deal Brexit may cost jobs while others like Jaguar have blamed the political uncertainty as one of the reasons for recent job cuts.

For Honda, declining demand for diesel vehicles and tougher emissions regulations have also clouded its manufacturing prospects.

Honda has spent £2.2 billion in Swindon since it opened its factory there in 1989. The restructuring announcement also noted the automaker's plant in Turkey will close in 2021. The global automotive industry is facing fundamental changes: "technological, commercial and environmental, as well as escalating trade tensions, and all manufacturers are facing hard decisions", Hawes said.

A source closer to Honda told Sky that the closure of its Swindon plant was expected to take place in 2022. There are, of course, the concerns over manufacturing and import/export as a result of Brexit, as well as what President Trump might do about tariffs on European-built cars. "They are seeking to consolidate production in Japan". It's understood that now, with no financial penalties for making cars in Japan and exporting them to Europe, the last business case in favour of maintaining HUM has been removed. Further details have suggested that the United Kingdom (and more broadly Europe) is not worth the investment from Honda; don't forget that 90 per cent of the Civics made each year in Swindon are exported, with a lot going to America.

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The closure is part of Honda's plan to centralize production in Japan over the coming years.

A recent exodus of Japanese companies from Britain is not exclusively down to Brexit, analysts said, but it has in many cases accelerated the decision to leave.

Japan has repeatedly warned it could pull investments in Britain, which it had seen as a gateway into Europe, if London does not secure a Brexit deal favourable for trade.

Even though Honda may have specified that the move was a business decision, many believe that companies have increasingly grown jittery around the looming Brexit on March 29.

Honda confirmed that the consultation over the plant's future will be today and that it will be "working closely with its workforce, including the recognised trade union, Unite the Union, over the months ahead".