Car manufacturing industry faces fresh blow with loss of Honda plant

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Honda’s decision to close its Swindon plant is the latest blow to the UK’s car manufacturing industry, with news of the move emerging 39 days before the Brexit deadline.

More than 3,000 jobs are under threat with the planned demise of the Japanese company’s Wiltshire plant.

Local Tory MP Justin Tomlinson said job losses are not expected before 2021 and blamed “global trends and not Brexit” for the closure.

Whatever the reason, the development will be highly unwelcome for those who rely on the plant for jobs and for those with high hopes for British manufacturing after the EU departure.

Maps UK car industry upheaval
(PA Graphics)

A fortnight earlier, Nissan told workers its next-generation X-Trail would be made in Japan and not Sunderland as planned.

The decision came despite the Government offering the manufacturer a so-called sweetheart deal of up to £80 million in support to protect the firm from higher post-Brexit trade tariffs.

The Society of Motor Manufacturers and Traders (SMMT) had warned the industry was on “red alert”, with figures suggesting car production had slumped by almost a 10th last year.

Swindon Honda plant
The number of cars being built in the UK has slumped (Andrew Matthews/PA)

Demand for diesel cars is drastically down, with a decline by 22% to 561,000 last year.

The SMMT said investment had effectively “stalled”, having halved in 2018 while firms delayed decisions until the UK’s trading arrangements became clearer.

Ford is also seeking up to 400 voluntary redundancies at its Bridgend engine plant and Land Rover is to shrink its workforce by 4,500, with most of those cuts in the UK.

Meanwhile, Porsche began asking buyers placing orders to sign contracts containing a clause stating they would be prepared to cover the cost of a potential 10% tariff.

After the latest development, Swindon North MP Mr Tomlinson said Honda had told him the move was based on global trends and not on UK’s nearing Brexit departure.

But that did little to dampen concerns with March 29 looming.

Unite’s automotive sector officer Des Quinn said the closure would be a “shattering body blow” for UK manufacturing.

“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 created by the rigid approach adopted by Prime Minister Theresa May,” he said.

Professor Matthias Holweg, an automotive industry expert at Oxford University, said fears of the high tariffs that would accompany a no-deal departure were “dangling Damocles’ sword” over the manufacturers.

With a sales slowdown in key markets and a decline in diesel demand, the industry “is not a happy place”, but “Brexit puts UK plants in a particularly bad position”, he said.

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