Honda: Quitting UK is not about Brexit Minister: It does show the perils of No Deal
BUSINESS secretary Greg Clark issued a stark warning over the future of the British car industry last night after Honda announced it was quitting the UK.
The Japanese car giant insisted yesterday that the decision to close its Swindon plant – with the loss of 3,500 jobs – had nothing to do with Brexit,
The firm blamed the global shift from diesel and petrol to electric cars.
But Mr Clark said that whatever the reasons, it highlighted the threat to Britain’s manufacturing sector of leaving the EU without a deal next month.
He said the motor industry had been ‘very clear’ with him for months that Brexit was ‘an additional worry at a difficult time’ and that a No Deal exit would be a ‘hammer blow’ to car manufacturing. Any further delays to agreeing a deal would be ‘unconscionable’, he added.
Mr Clark also described Honda’s decision ‘devastating’ and vowed to set up a task force to help staff at the plant get new skilled jobs. Theresa May also told Cabinet ministers she had personally expressed her ‘ disappointment’ at the move in a call to Honda’s president.
The company yesterday formally confirmed the plans, which leaked out on Monday, to shut its Swindon plant in 2021 despite insisting just months ago that the site was not under threat. Thou- sands more jobs are now thought to be at risk in supply firms across the UK. The new Honda Civic hatchback will be made in Japan and exported to Europe.
In a statement which pointedly excluded any mention of Brexit, Honda said the global switch to electric cars means Britain ‘may no longer be viable’ as a ‘global manufacturing hub’.
It said: ‘This proposal comes as Honda accelerates its commitment to electrified cars in response to the unprecedented changes in the global automotive industry.’ The manufacturer said it was ‘ not feasible’ to invest heavily in electric cars where sales are ‘relatively low’.
In a statement to the Commons, Mr Clark spoke of the urgency of agreeing a deal with the EU to prevent any further damage to the UK manufacturing industry. He said he had been repeatedly told in boardrooms that business will ‘ not simply be deferred but moved elsewhere’ if Britain does not act. The minister said: ‘ The company said their decision was not about Brexit and clearly we must accept that.’
However, he added: ‘Japanese investors and Honda in particular have been very clear for many months that Brexit is an additional worry at a difficult time and they have been instrumental in shaping a deal that has been negotiated.’ He reeled off comments from firms including Ford, Aston Martin and Toyota, adding: ‘The clear message from the automotive companies is that we should get on and ratify this deal.’
Infuriated Brexiteer and Tory former minister Andrew Murrison urged Mr Clark to be ‘very careful about imputing motives’ to firms that may be relocating.
Staff at Swindon yesterday claimed they felt ‘betrayed’ by the decision. Unite union official Alan Tomala said: ‘I left work yesterday to 57 missed calls and around 130 emails, and not one from Honda. It surprises me and I’m angered by it.’ Sue Davis, 49, a financial worker whose ex-husband works at the plant where the first Honda Accord rolled over the production line 30 years ago, said: ‘I think Swindon’s finished without Honda.’
Honda wants at least two thirds of its cars sold in Europe to be electric or hybrid – powered by battery and combustion engine – by 2025.
As it sells ten times more cars in Asia and the US, the firm concluded it was ‘not worthwhile’ investing huge sums updating its Swindon factory to build eco-friendly vehicles.
The move is a setback to the Government’s ambitions to be the global leader in electric cars and sparked warnings that more UK car plants could follow Honda. Dyson has said it plans to build its electric car in Singapore. Jaguar Land Rover and Ford are to cut thousands of jobs in the UK, and Nissan has cited Brexit as it cancelled expansion plans in Sunderland.
Jim Holder, of What Car? magazine, said the transition to electric could prompt other car giants to leave Britain.
‘We’re lagging in terms of manufacturing and uptake, particularly compared with China, Japan and parts of America.’ He added: ‘There is a very real risk we’re being left behind.’