Published: Wed, February 20, 2019
Money | By Arnold Ball

United Kingdom deeply disappointed by Honda’s decision to close plant

United Kingdom deeply disappointed by Honda’s decision to close plant

The vehicle maker could reportedly make the announcement as soon as Tuesday morning. "The timing of this announcement is based on decisions regarding the production location of the next-gen Civic", Honda spokeswoman Jessica Pawl wrote in an email.

"If closure is confirmed, it will rip the heart out of this area". Still, Chief Executive Officer Takahiro Hachigo said the UK's divorce from the European Union wasn't a factor in Honda's move, but the company changing its production as the industry moves toward electric cars. The closure of the factory that makes the Jazz, CR-V, Civic Hatchback and Civic Type R (Swindon is the global hub for the FK8) is part of a move to restructure Honda's global manufacturing network, and to focus on electrification.

Honda said under the proposed restructure, the current role of its United Kingdom manufacturing business (HUM) as a global manufacturing hub may no longer be viable.

HUM director Jason Smith said: "We understand the impact this proposal will have on our associates, wider supplier base and the local community".

Further details have suggested that the United Kingdom (and more broadly Europe) is not worth the investment from Honda; don't forget that 90 per cent of the Civics made each year in Swindon are exported, with a lot going to America.

The company said it will also adjust its operations in Turkey, where it makes 38,000 Civic sedans a year. "They are seeking to consolidate production in Japan".

The plant closure will be one of several by automakers reassessing their presence in the United Kingdom and Europe. However, in January 2019, Honda said it would pause production for six days in April to prepare for potential Brexit disruptions.

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Honda just announced this week that it will be closing its Civic hatchback factory in Swindon in the United Kingdom. The U.K.'s decision to leave the bloc could create further uncertainty for Japanese companies in Britain.

The decision is still a blow to the United Kingdom industry that's battling a Brexit-related slowdown, potential tariffs and supply bottlenecks after leaving the trade bloc on Mar 29.

Earlier this month, Japan's Nissan announced that it would not build a new SUV at its plant in Sunderland, England, as previously planned. The company's Swindon plant was established in 1985.

The Japanese Government has been in negotiations with the European Union for months over a new free trade deal that will end European Union tariffs on Japanese auto imports.

And a new EU-Japan trade deal will see the EU reducing the 10% duties on Japanese vehicle imports to zero by 2027, meaning there is less need for Japanese manufacturers to have a base in the EU.

Unite national officer for the automotive sector Des Quinn said: "We acknowledge the global challenges that Honda has outlined in its statement, but we don't accept that this plant, with its highly skilled and dedicated workforce, does not have a viable future".

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