Honda Job Losses

It is not easy to contemplate the loss of jobs and hardship to families from that or enormous outflow of capital because of an ideological stance by one party about leaving the EU. I was listening to the radio today and Terry Christian was saying that if bosses have to sack people after Brexit then they should start with Leavers

The manufacturer of Honda cars at Swindon is equivalent to 10% of all cars manufactured/assembled in the UK. In 2018 the UK made 1.5 million cars (down from 2016 when they produced 1.7 million). Similarly, investment in the car industry in 2013 was at £5.83 billion, and in 2018 it was £590 million.  Unfortunately, it is also estimated that another 3000 to 4000 jobs will also be lost through the supply chain.  Nissan is not going to make its electric model in Sunderland, 4,500 jobs are at risk with Land Rover, Ford has put hundreds of jobs at risk as has BMW.

The University of Sussex has estimated that a no deal Brexit will lead to an estimated 750,000 jobs and the areas that will be hit the hardest is London with 150,000 positions lost.

What is happening in other industrial areas. EY (Chartered Accountants) has been monitoring 222 companies, and 75 of them have stated there are looking to move their operations from the UK to Europe. The EY report stated that at least £800 billion ($1 Trillion) worth of assets is relocating out of the UK to Europe. Nomura (once it was said of them, that they are so big they can buy BT from petty cash) and Daiwa are looking to move to Germany. Lloyds of London confirmed that in May they had received regulatory approval to establish an insurance company in Brussels. Panasonic is moving its HQ to the Netherlands. Small and Medium Enterprises (SMEs) that trade with Europe are looking to set up European outposts.

Depressingly, to name a few more companies looking to establish their operations in Europe: EasyJet,  Diageo (owners of Smirnoff, Guinness and Baileys), Goldman Sachs, Deutsche Bank, Microsoft and Barclay’s (the bank is expanding operations in Ireland). In food retail, they are more concerned with logistics and exchange rates.

There is a widespread concern with access to Labour that will impact for example NHS, hospitability and construction industries. However, companies like Rio Tinto and BP will not be affected as their activities take place outside of the UK.

Is Terry Christian right?

The answer must be no. We have a divided country at the moment, and the last thing we want is more fuel to the fire. Whatever happens, we must come together – we have the Tories who seem to be looking at this through rose tinted glasses and the Labour party that is unable to persuade its MPs let alone the nation. The real fear going forward is not only job losses but the poor national political leadership from the Tories and Labour.

* Tahir Maher is a member of the LDV editorial team and the Chair of the English Party

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21 Comments

  • Arnold Kiel 20th Feb '19 - 8:20am

    Come together? Sorry, Tahir, but I am totally fed up with this dishonest May demand. To do what? May and Corbyn? How would that help British workers and farmers? No, a quick and decisive defeat of Brexit and all its promoters is the only answer. Some things need a clearing thunderstorm.

  • Richard Allanach 20th Feb '19 - 8:23am

    Is Terry Christian right? No. Selecting someone for redundancy based on their political views would be automatic unfair dismissal.

  • @richard allanach, I think Terry Christian knows that, but like many of us he would just like to see those who made this dreadful decision come face to face with the reality. Personally, I would be happy just to see them admit that what they called project fear was economic reality. Fat chance.
    Talking about “coming together” seems like the right thing to say, but I just can’t see how you make that happen. Ultimately we are a divided nation, culturally as much as economically, and the disaster of Brexit will exacerbate those divisions. We should have been “coming together” 20 years ago but we are where we are and there are no good outcomes from the place we find ourselves in. Sorry to sound so gloomy, but if you disagree, I’m sure you’ll tell me why I’m wrong.

  • John Barrett 20th Feb '19 - 9:08am

    Despite repeated statements from Honda that their decision was not because of Brexit, it appears that the Party’s press statement and this piece knows better than Honda about why they made this decision.

    Is it any wonder that many members of the the public, and some party members, have lost faith in our party, when we repeatedly use such events to justify reasons to oppose Brexit.

  • Tahir Maher Tahir Maher 20th Feb '19 - 9:29am

    @John – I give a likely reason why I feel that the commercial decision by Honda is based on moving the new production of electric cars from the UK (where they have a plant and much of the infrastructure to produce) to another plant where they will have to spend to develop the infrastructure. The Japanese government do have an agreement re the cars their manufacturers assemble – that is what I am alluding to. Technically they are correct but it is underlined by their governments trade agreement with the EU

  • John Marriott 20th Feb '19 - 9:36am

    Honda’s decision has much more to do with the mess the automotive industry is in world wide. Too many manufacturers, better quality and longer lasting products, misleading information about diesel powered vehicles, an attempted switch to electrical propulsion without the infrastructure being in place are just a few of the reasons why Honda, the smallest of our ‘guest’ car manufacturers, is intending to close its only plant outside the Japanese mainland.

    I gather that Messrs Hunt and Fox have recently concluded a cack handed visit to Japan and succeeded in offending its government by trying to pressurise it into signing a trade deal asap. All that was lacking was for Gavin ‘Palmerston’ Williamson to have sent a gunboat over to help them concentrate their minds.

    As for Mr Christian’s suggestion, it’s hardly very Christian is it? In any case, how could you possibly prove that someone actually voted Leave if they denied it? Pull the other one, please. Let’s get back to serious matters, like, to use the kind of expression that our friend ‘frankie’ might be proud of, how do we persuade all those dear innocent lambs that voted for their own slaughter to see the error of their ways and support that nice ‘People’s Vote’?

    Added to that is the Trade Deal that the EU has concluded with Japan which means that it is no longer necessary for Japanese manufacturers to have to use us as a kind of aircraft carrier to launch its exports to the european mainland. After all ‘Made in the UK’ has given Japanese goods free access into one of the world’s most lucrative markets. We need to be aware. Under the new non tariff rules, where Honda leads, Toyota and Nissan could follow.

  • David Evans 20th Feb '19 - 9:57am

    John Barratt, Technically you are correct, Honda have not *said* they are leaving because of Brexit. However, May’s neverending Brexit delay and prevarication means they have a choice between making cars in Japan with the certainty of an EU trade deal or carrying on in the UK with its certainty of prevarication, delay and dither plus a significant risk of 10% tariffs.

    Also even saying ‘In part, we are leaving because of Brexit’ is a great way of losing the 50% of your sales made to Brexiteers, many of whom can be a bit fanatical about their dream.

    Brexit will be a factor. The EU Japan Trade deal will be another. Straightforward Japanese patriotism will be another.

    One key question, what was the process for getting EU wide approval for the deal. Clearly it was of greatest risk to the UK. Another example of the Conservatives taking their eye off the ball to play Brexit?

  • John Barrett 20th Feb ’19 – 9:08am………………..Despite repeated statements from Honda that their decision was not because of Brexit, it appears that the Party’s press statement and this piece knows better than Honda about why they made this decision……….

    I don’t know; but I tend to agree with Tahir Maher’s take.

    Aftwr all, Honda UK wrote an open letter to the government in 2016 warning about the dangers of Brexit. They reiterated these warnings, backed up by the Japanese Ambassador, in Feb 2018*.
    Japan signed a free trade dealt with the EU and now has no need for manufacturing in a country (UK) which has no such access.

    * HONDA and other Japanese firms will pull out of Britain if the Government fails to secure free access to the EU market, according to the country’s ambassador. The car giant, which has a manufacturing plant in South Marston, was among firms that sent top executives to discuss Brexit at a Downing Street meeting. The ambassador’s comments raised the prospect of thousands of jobs being lost if the Government fails to negotiate a frictionless trade deal.

    Is it just a co-incidence that the first (only) overseas plant closed by this company is in a post Brexit UK?

  • John Marriott 20th Feb '19 - 11:08am

    For some reason my final and penultimate paragraphs got transposed. My contribution was meant to end with ‘People’s Vote’.

    By the way, has any bright spark considered the possibility of using the Swindon site to set up a U.K. design and research facility into the development both of electric propelled vehicles and hydrogen fuel cell propulsion, which, in my opinion, has as bright a future as battery power? Take back control!

  • Joseph Bourke 20th Feb '19 - 11:44am

    John Marriott,

    “By the way, has any bright spark considered the possibility of using the Swindon site to set up a U.K. design and research facility into the development both of electric propelled vehicles and hydrogen fuel cell propulsion, which, in my opinion, has as bright a future as battery power? Take back control!”

    This is what I was thinking. The British car industry was once a world leader. It was destroyed by militant unions, poor management and a mistaken view that it was a cash cow that could be milked irrespetive of better quality better value available from foreign producers. The nationaliation of British Leyland in 1975 was the final death knell.
    There seems to be no good reason that UK engineers cannot carve out a leading position in the new generation of battery powered electric/hybrid cars. It would take a long-term committment to public and domestic private investment and a recognition that there are only two choices for a nation state in a globalised world – compete or decline.

  • Bless it is nothing to do with Brexit

    HONDA CLOSURE: ‘Fanciful’ to think Brexit didn’t play a part, says former Japan ambassador

    https://www.swindonadvertiser.co.uk/news/17445485.honda-closure-fanciful-to-think-brexit-didnt-play-a-part-says-former-japan-ambassador/v

    The man, who like most workers absorbing the news did not wish to be named, has been with the company for 24 years. He blamed Brexit for the car giant’s decision. He said he had voted remain in the EU referendum and condemned the local Conservative MP Justin Tomlinson for campaigning for Brexit.

    “He wanted Brexit – he gets to carry the can. If he’s not unseated by a massive majority at the next election then this town gets what it deserves,” he said.

    Before the referendum – in which 55% of the town backed leave – the site was a “perfectly viable car plant operating for 30 years, no problem at all”, he said. “As soon as Brexit comes along the plant needs investment.”

    He said he thought the government was “completely incompetent” and felt “pretty hacked off” by the news.

    https://www.theguardian.com/business/2019/feb/18/workers-blame-brexit-for-demise-of-hondas-swindon-plant

    Well the “nothing to do with Brexit” line is playing well.

    As to build electric cars there, a good idea John but who is going to pay for it, global business not very likely, the government even less likely. As to the fate of Swindon, well look North and you can see their fate, still won’t be as bad as Sunderland they are Royally knackered.

  • David Becket 20th Feb '19 - 12:18pm

    Brexit is not a main factor in Honda deciding to move as others have stated. However what it does show that the UK post Brexit will give international companies less incentive to invest in the UK. This is not just manufacturing. Rees Mogg has established a hedge fund operation in Dublin, and pays tax in tax havens. These hard Brexiteers have no interest in the future of UK workers, as long as they are financially safe.

  • When faced with reality many posters on this site retreat into

    What if we could …….

    Well the problem you have is as an isolated declining, dysfunctional country there are many better places to do the “could”. Dyson didn’t move to Singapore for the cuisine. I’d urge posters to face the reality scary as it is; either you stop Brexit or Brexit will cripple the country, anything else is a retreat to “Sun lit Uplands” a place full of faeries and Unicorns but very few well paid jobs.

  • Richard Allanach 20th Feb ’19 – 8:23am

    Is Terry Christian right? No. Selecting someone for redundancy based on their political views would be automatic unfair dismissal.

    Richard,
    Firstly prove it, secondly pay for the tribunal. Two high fences that would put most people of that route.

    Another point is how would you know a person was a leaver, well if you have kept silent you can’t, but those that have been Billy Big Balling it on Fake Book, well don’t take much to spot them. I’d hope that people didn’t take that approach but we are heading for times that are far from “nice” and I fear people on both sides will be trying to enact vengeance on those that they feel betrayed them. What a sad state of affairs we have reached just to keep the Tories together.

  • >nothing to do with Brexit
    Whilst this may or may not have anything to do with the process of Brexit, it is a timely warning about the post-Brexit world. Remember the brave Brexiteers going on about being able to set our own tariffs and setting them to zero…

    This is exactly what the EU has done with the Japanese car industry – result Honda no longer has a need to produce cars in the EU to avoid tariffs, hence the closure of their UK and Turkish manufacturing plants.

    So here we have real evidence that the brave Brexiteers don’t really have a clue about trade and why tariffs exist.

    One key question, what was the process for getting EU wide approval for the deal. Clearly it was of greatest risk to the UK. Another example of the Conservatives taking their eye off the ball to play Brexit?
    I think, based on the evidence of previous UK implementation of EU agreements (eg. the enlargement of the EU in 2004), the UK government had their eyes on a different ball. They were so obsessed with the EU being ‘protectionist’ etc. that they fully endorsed the zero tariff (and probably suggested it in the first place) without a second thought…

  • Peter Martin 21st Feb '19 - 9:43am

    @ Martin,

    “I do think there is a strong case for providing preferential support for hard hit communities that voted against Brexit.”

    Maybe future Labour Govts should give “preferential support” to those communities that didn’t vote for pro-austerity minded candidates in General Elections? This would certainly include some Lib Dems! I don’t think so.

    Look, this idea is a non-starter. Whatever problems our democracy throws up have to be dealt with impartially. We shouldn’t ever be tempted to impose collective punishments on particular groups of people. We should leave sort of thing that to EU politicians! And I’m thinking of their decision to freeze the bank accounts of all Greek people because they didn’t like the way they’d voted in a Syriza led government.

  • Tony Greaves 21st Feb '19 - 8:26pm

    A group of LD peers had a meeting last summer with top Honda management at UK/EU level, as part of the discreet lobbying of politicians that they were doing. They made it quite clear that while they would continue to operate the investment they had made in Swindon for the time being, if this country could not agree a deal with the EU that gave them the terms of trade with Europe that we have now, there would be no new models. Market conditions and the new EU-Japanese trade deal have probably just speeded things up by a year or two.

  • Peter Martin 21st Feb '19 - 9:23pm

    “In Europe, Honda’s market share was 1.2% in 1980 and gradually slid to about 0.8% in 2018 , according to the European Car Manufacturers Association. That was just under 120,000 vehicles last year……………….. European market share breached the 2% barrier briefly in 2007. The Swindon plant now makes about 150,000 vehicles a year.”

    150,000 is simply not enough for the plant to be viable.

    https://www.forbes.com/sites/neilwinton/2019/02/20/while-honda-sales-boomed-in-the-u-s-europe-was-allowed-to-stagnate/#2f6cc84a1eb

  • >150,000 is simply not enough for the plant to be viable.
    Given no vendor sells more than 150,000 of the same model in the UK per annum, it does seem that Post-Brexit, car manufacturing will no longer be viable in UK…

    That is going to have a major impact on that £39bn…

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