Japanese firm to shut plant in 2022 but maintain its European HQ near Bracknell in Berkshire

This article is more than 1 year old

This article is more than 1 year old

Honda is planning to close its factory in Swindon, dealing what trade unions called a “shattering body blow” to the UK automotive sector, which is already wrestling with the effects of Brexit-related uncertainty.

The Japanese carmaker is expected to announce as early as Tuesday that it is planning to shut its Swindon plant in 2022, in a move that would put 3,500 jobs at its only European production site at risk and threaten many more in its supply chain.

Workers blame Brexit for demise of Honda's Swindon plant Read more

The Swindon factory made 160,000 Honda Civics last year, just over 10% of total UK vehicle production. About a third were for export to the EU.

Honda is expected to move production back to Japan, partly because it can guarantee tariff-free exports to the EU, according to Sky News.

Honda said: “At this point, we are not able to make any comments regarding the speculation. We take our responsibilities to our associates very seriously and will always communicate any significant news with them first.”

The loss of the Honda plant follows previous warnings about the impact of a no-deal Brexit from Britain’s largest automotive firm, Jaguar Land Rover, as well as Ford, Toyota, Nissan and BMW.

Several of the firms have also pointed to a slowdown in demand from China, as well as slumping diesel sales caused by the continuing fallout from the “Dieselgate” emissions data-rigging scandal.

Earlier this month, Nissan ditched plans to build its new X-Trail SUV in Sunderland, while Ford has said it will shed 1,000 jobs as part of a wider European cost-cutting plan.

Jaguar Land Rover has cited Brexit among the factors in its own 4,500 job cuts, while Toyota and BMW have said production sites could close in a no-deal scenario.

However, Justin Tomlinson, the North Swindon Conservative MP whose constituency includes the plant, said he had spoken to the company and insisted its decision was “due to global trends and not Brexit”.

Justin Tomlinson MP (@JustinTomlinson) Honda: @RobertBuckland & I have already spoken to the Business Secretary & Honda. They are clear this is based on global trends and not Brexit as all European market production will consolidate in Japan in 2021.

Last month Tomlinson, a vocal Brexit supporter, tweeted that Honda was preparing for any scenario and was “committed” to Swindon.

However, Honda has also previously voiced concern about the impact a hard Brexit could have on the “just-in-time” manufacturing processes crucial to the automotive sector, potentially costing the company millions of pounds.

Japan’s ambassador warned last year that the UK would not find a better trade deal than it has access to as a member of the European single market, while the EU and Japan signed the world’s biggest ever free-trade agreement last year. It came into force at the start of this month, sparking concern that British businesses could lose out as a result.

Britain’s largest trade union Unite said the closure of the Swindon plant would be a “shattering body blow at the heart of UK manufacturing”.

Des Quinn, the union’s national officer for the automotive sector, called for an urgent statement from business minister Greg Clark.

“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.

“We are seeking urgent clarification from Honda on the implications of these serious reports. The 3,500-strong workforce do skilled, well paid jobs that the UK can ill-afford to lose.

“If the government had advance warning of this dreadful news and did not alert the unions, this is an appalling and cavalier attitude by ministers.”

A source close to Honda told Sky News the carmaker would maintain its European headquarters near Bracknell, Berkshire, as well as its UK-based Formula One team, but that the Swindon factory would close.

Honda’s announcement comes with no sign of a Brexit deal in place just weeks ahead of the 29 March date on which the UK is set to leave.

A spokesperson for the Department for Business, Energy and Industrial Strategy said it was unable to comment on speculation.

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The Labour MP Rachel Reeves, chair of the business select committee, 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.”

Pernille Rudlin, whose Rudlin Consulting firm advises Japanese businesses, warned that many more jobs could be lost at companies in Honda’s supply chain if Swindon closed.

Pernille Rudlin (@pernilleru) Of course Honda Swindon closure is not just about the 3,500 jobs there. Other Honda suppliers in the UK include G-TEKT production in Gloucester, Tredegar, Ebbw Vale employing 800 people. But also plant in Slovakia starting 2019. 1/

• This article was amended on 19 February 2019. Of the 160,000 Honda Civics made in the Swindon factory last year, about a third were for export to the EU, not the vast majority as an earlier version said. This has been corrected.