Honda to Shut UK Car Plant by 2022 Affecting 3500 Jobs
Japanese Car maker Honda has recently announced that it would close its only British car plant in 2022 with the loss of 3,500 jobs, a lawmaker said recently, in the latest blow to the UK car industry as Brexit approaches.
The closure of Honda’s Swindon factory in southern England would be its second plant shut down in 2022. Honda a year ago said that it would close one of its Japan plants in 2022, in an effort to consolidate production as it focuses on new vehicle technologies.
At the Swindon plant, Honda built over 160,000 vehicles. It makes the hatchback version of its popular Civic model, accounting for a little more than 10 percent of Britain’s total output of 1.52 million cars.
But in the recent years, Honda had struggled in Europe, and the whole industry is facing a number of challenges including declining diesel vehicle demand and more stringent regulations alongside the uncertainty over Britain’s departure from the European Union which is due next month.
Justin Tomlinson, a Conservative lawmaker for Swindon who voted for Brexit in 2016, said he had met with the business minister and representatives from Honda who had confirmed the plans.
“They were due to make a statement tomorrow morning, it’s obviously broken early,” Tomlinson, a lawmaker for North Swindon, told Reuters.
“This is not Brexit-related. It is a reflection of the global market. They are seeking to consolidate production in Japan.”
Honda said it would not be providing any comment on the “speculation.”
“We take our responsibilities to our associates very seriously and will always communicate any significant news with them first,” the firm said.
Honda had announced in October 2017 that it would stop making vehicles at its Sayama plant in Japan by 2022 as it grapples with a shrinking domestic market.
Following other big players in the industry, Honda is trying to streamline its operations as it invests heavily to develop electric vehicles and self-driving cars, transforming itself from simply a manufacturer of cars into a mobility company.
It should be reported here that recently Japan warned it could pull investments in Britain, which it had seen as a gateway into Europe if London does not secure a Brexit deal favorable for trade.
The EU-Japan trade agreement, which was recently penned down states tariffs on cars from Japan to the continent, will be eliminated, while Britain is struggling to make progress on talks over post-Brexit trade relations with Tokyo.
Honda’s announcement had come just after two weeks when another giant Japanese car maker Nissan canceled plans to build its X-Trail sports utility vehicle in Britain.
In January, blaming the slower demand in China, Britain’s biggest automaker Jaguar Land Rover said it would cut almost 10 percent of its workforce. It also blamed slowing European diesel demand for this cut.
“The car industry in the UK over the last two decades has been the jewel in the crown for the manufacturing sector – and now it has been brought low by the chaotic Brexit uncertainty,” said Des Quinn, national officer for the automotive sector at Unite, Britain’s biggest trade union.
Honda said last month that it would be closing its British operations for six days in April to help counter any border disruption from Brexit. It was also reportedly planning to front-load some production at its plant to ship overseas or build up inventories.
Nissan, Honda, and another Japanese car maker, Toyota Motor Corp, together account for roughly half of the cars built in Britain.
Honda, which has been making more cars for sale outside of Europe in recent years, said earlier this month its production size at Swindon would be reduced to 570 cars per day and that it would make job cuts.
“This reduction in volume will not have any impact on our permanent resource levels, and is in line with our current production plans,” the company said.