Published: Thu, February 21, 2019
Markets | By Erika Turner

Honda employee of 24 years sums up Brexit in four eloquent words

Honda employee of 24 years sums up Brexit in four eloquent words

With workers saying that Brexit is to blame, it's worth asking: How did Swindon vote in the referendum, and are thousands of jobs really going to be lost at Honda because of Brexit?

But it has struggled in Europe in recent years, and the industry faces a number of challenges, including declining diesel demand and tougher regulations, alongside the uncertainty over Britain's departure from the European Union, due in March.

Honda has also previously voiced concern around the impact of a no-deal Brexit on both its supply chain and cost to the company.

"We have chose to carry out this production realignment in Europe in light of our efforts to optimize production allocation and production capacity globally as well as accelerating electrification", Hachigo said. "This has not been taken lightly and we deeply regret how unsettling today's announcement will be for our people".

Mr Clark accepted Honda's decision was "not about Brexit". Instead he said: "We're seeing unprecedented change in the industry on a global scale".

"Alastair: the senior vice president in Europe has said it's nothing to do with Brexit".

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Local MP Justin Tomlinson tweeted ahead of Tuesday's announcement that the decision had been made "based on global trends and not Brexit as all European market production will consolidate in Japan in 2021".

The loss of such a major employer in Swindon, which backed Brexit in the June 2016 referendum, risks a further 10,000 jobs in the supply chain, which could have knock-on effects for other auto makers due to the interconnected nature of the sector. By then, Honda might instead start building the next Civic Hatchback in North America. They can centralise production in Japan, saving money, and access European Union markets as before. Previous tariffs that applied to cars made in Japan for the EU will be scrapped by the end of this year; with the United Kingdom set to have left by then, the financial benefit for European sales to having a factory here is reduced.

Honda built just over 160,000 vehicles at its Swindon factory in southern England in 2018, where it makes the Civic and CV-R models. Future product for Europe will be exported from Honda plans in Japan and China, Hachigo said.

Honda, along with Nissan and Toyota produce around half of Britain's cars, and the latter two have also announced production changes as a result of Brexit.

And Japanese officials have reportedly become frustrated with their British counterparts as they negotiate a potential post-Brexit trade deal. Under the deal, the bloc will axe 10-percent tariffs on cars imported from Japan in 2027.

"I know we haven't left (the EU) as yet but companies are getting ready beforehand, so it's not just a case of waiting for a deal to be made, companies are already making their plans unfortunately", he said. The UK is most at risk because nearly half of the cars made in the country are Japanese branded, and Japanese automakers want to increase utilization of plants at home.

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