Honda job losses: Car firm set to axe 3,500 workers by closing Swindon factory, says report

Car manufacturer becomes latest to cut jobs or shift production elsewhere amid Brexit uncertainty

Ben Chapman
Monday 18 February 2019 17:40
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Honda preparing to axe 3,500 jobs by closing Swindon plant, says report

Honda is preparing to announce the closure of its Swindon plant in 2022 with the loss of 3,500 jobs.

The Japanese car manufacturer announced earlier this month it would cut 350 jobs at the factory, citing a global fall in demand for diesel cars.

That followed an announcement in January that Honda would shut down production at Swindon for six days in the event of a no-deal Brexit. Last year Honda warned that crashing out of the EU could cost the company tens of millions of pounds.

Sky News reported on Monday that the Swindon plant will close with an announcement expected as soon as Tuesday. Brexit is thought to be a factor in Honda’s decision, however the company declined to comment.

Des Quinn, Unite national officer for the automotive sector, said the job losses will be a “shattering body blow at the heart of 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.

Production changes in Swindon are not expected until 2021, according to local Conservative MP Justin Tomlinson.

He tweeted: “Honda are clear this is based on global trends and not Brexit, as all European market production will consolidate in Japan in 2021.”

However, the company is the latest in a string of car manufacturers to cut jobs or shift production out of the UK. Nissan announced this month that it would build its new X-Trail model in Japan rather than Sunderland, while Toyota has also sounded the alarm, stating it has “no contingency for no deal”.

A Toyota spokesperson said this month: “We need a deal. We will have peak production in March because we have a new model, the Corolla.

“There is no planned production stop. No deal is not an option for us. We operate lean manufacturing and hold hours of inventory at the plant.”

Japan recently signed a trade deal with the EU, which will introduce zero tariffs on car imports, whereas vehicles exported from the UK to Europe face a 10 per cent tariff after a no-deal Brexit.

Carmakers have been hit hard by uncertainty surrounding the UK’s departure from the European Union, new diesel emissions rules and a slowdown in a number of key markets such as China.

Jaguar Land Rover has also stated it will cut thousands of jobs, while Ford last week warned no-deal Brexit would be “catastrophic” for the firm’s UK operations.

Rachel Reeves, chair of the House of Commons Business, Energy and Industrial Strategy Committee, said the Honda job cuts were “devastating” for Swindon and the UK car industry.

“The threat of Brexit is already having a damaging impact on investment decisions in the UK,” Ms Reeves said.

“The PM now needs to rule out no deal immediately and keep us in the single market and customs union rather than risk further fatal damage to our car industry. Japan and the EU have a free trade agreement, guaranteeing tariff free access. It would be an act of folly to toss that away, along with friction-free access to the EU market, in the forlorn hope that we could negotiate a better deal.”

Investment in the British car industry fell by 50 per cent in 2018, as firms held back spending due to Brexit, while UK car production fell 9.1 per cent to a five-year low of 1.52 million units in 2018.

With eight out of 10 cars exported, weak demand in many markets – including the eurozone, the UK and China – has depressed production.

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Confusion over new official fuel consumption figures and mixed messages from governments about diesel added to the industry’s problems. It was the second consecutive annual fall as the sector faces multiple challenges.

A Honda spokesperson said the company could not comment on “speculation”.

We take our responsibilities to our associates very seriously and will always communicate any significant news with them first,” the spokesperson said.

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