Nis­san move leads to Brexit re­grets

Bri­tish res­i­dents who voted to leave EU now find­ing out con­se­quences may be steep

The Detroit News - - BUSINESS - BY JOE MAYES Bloomberg

Lisa Ro­ley has worked at Nis­san Mo­tor Co.’s car plant in Sun­der­land for the past two decades. Like the ma­jor­ity of peo­ple in the city, she also voted to leave the Euro­pean Union in 2016.

A day af­ter the Ja­pa­nese man­u­fac­tur­ing gi­ant pointed a fin­ger at Brexit as it aban­doned plans to build a new model at the fac­tory in north­east Eng­land, the 47year-old cleaner was ques­tion­ing her de­ci­sion. The warn­ings from some lo­cal politi­cians and ex­ec­u­tives of what might hap­pen were no longer be­ing dis­missed as fan­tasy.

“I’m not so sure now,” said Ro­ley, as she waited for the bus back to her home four miles from the sprawl­ing grey Nis­san com­plex. “They’re say­ing on the telly it’s go­ing to af­fect a lot of busi­nesses.”

Sun­der­land’s en­thu­si­asm for Brexit en­cap­su­lated the causes of Bri­tain’s Trump-style re­bel­lion, a cul­mi­na­tion of bud­get cuts, re­sent­ment toward im­mi­gra­tion and per­ceived ne­glect. Now the city finds it­self at the sharp end of the con­se­quences, at the mercy of the pro­tracted and painful di­vorce from the EU.

Nis­san’s move to lo­cate con­struc­tion of the X-Trail sport util­ity ve­hi­cle in Ja­pan was partly mo­ti­vated by a de­cline in diesel sales, but Brexit has cast a long shadow over Sun­der­land’s largest em­ployer. When Nis­san set up shop in the mid-1980s, it was ex­pressly to use the re­gion and its North Sea ports as a gate­way to Europe’s com­mon mar­ket.

The car plant, now Bri­tain’s largest, turned into a main­stay of the re­gional econ­omy. It sus­tained the area’s in­dus­trial her­itage af­ter the col­lapse of coal min­ing and ship­build­ing led to some of the coun­try’s worst un­em­ploy­ment and poverty. Em­ploy­ing 7,000 peo­ple and sup­port­ing an­other 28,000 sup­plier jobs, the fac­tory churned 442,000 au­tos last year.

“Every­body who lives in Sun­der­land ei­ther works in the plant or knows some­body who does,” said Mick John­son, 61, a taxi driver who reg­u­larly fer­ries vis­i­tors to the fac­tory. He voted to re­main in the EU. “It’s ab­so­lutely huge.’’

Nis­san and other car­mak­ers

out are con­cerned that Brexit will dis­rupt the flow of com­po­nents and fin­ished ve­hi­cles across the U.K. bor­der. They’re par­tic­u­larly wor­ried about the pos­si­bil­ity of a nodeal split, which would in­tro­duce cus­toms checks and tar­iffs un­der World Trade Or­ga­ni­za­tion rules.

Many au­tomak­ers are stock­pil­ing parts and sched­ul­ing main­te­nance stops af­ter March 29 to min­i­mize the im­pact of any upheaval. But it’s a 46 per­cent drop in in­dus­try in­vest­ment in the U.K. last year, to­gether with mount­ing job losses and de­layed de­ci­sions on new prod­ucts, that are the chief con­cern for work­ers.

Jaguar Land Rover, Bri­tain’s big­gest car­maker, said last month it would scrap 4,500 posts in re­sponse to a sales slow­down blamed on the diesel slump and Brexit. Ford Mo­tor Co. is con­sol­i­dat­ing U.K. of­fices, while thou­sands of job cuts world­wide could threaten its Brid­gend en­gine plant in Wales. And the fu­ture of PSA’s Vaux­hall Ellesmere Port site is in doubt as it mulls plans for the next As­tra.

“The longer the Brexit un­cer­tainty goes on, the more the dam­age will be,” said David Bai­ley, pro­fes­sor of in­dus­trial strat­egy at As­ton Busi­ness School. “Man­u­fac­tur­ers have got some big de­ci­sions com­ing up about fu­ture mod­els and whether to build them in the U.K.”

While Nis­san has re­as­sured staff about fu­ture in­vest­ment in ve­hi­cles al­ready pro­duced in Sun­der­land, in­clud­ing the Qashqai and Leaf mod­els, there’s con­cern that the X-Trail de­ci­sion may prove to be the thin end of the wedge, said Steve Turner, head of man­u­fac­tur­ing at Unite union.

“The re­al­ity is that if we fall out on March 29 with­out a trad­ing re­la­tion­ship with the EU, they’ll re­view their de­ci­sions,” he said. “They’re in­cred­i­bly wor­ried about how the Brexit ar­gu­ment de­vel­ops.”

Christo­pher Fur­long / Getty Im­ages

Nis­san an­nounced to work­ers in Sun­der­land, Eng­land, that the next-gen­er­a­tion X-Trail will be made in Ja­pan and not their plant.

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