Honda to Close Its Only UK Factory
Japanese automaker Honda confirmed on Tuesday that it would close its factory in Swindon, England, by 2021. The plant, Honda’s only one in the UK, currently employs 3,500 workers and produces around 150,000 cars a year. The site will close down once Honda’s current line of Civic cars has come to an end.
Hours after its initial announcement, Honda said that 3,500 more jobs might also be affected within the supply chain of subsidiaries and partner companies involved with the Swindon factory, bringing the total job loss up to 7,000. Car industry experts have said, however, that the number seemed low and the actual loss could be three times the number that Honda gave.
Katsushi Inoue, chief officer for European operations, said that “it is vital that we accelerate our electrification strategy and restructure our global operations accordingly … in light of the unprecedented changes that are affecting our industry,” referring to the global reshaping of the automobile industry as well as Britain’s ongoing plan to exit the European Union.
Britain’s business secretary Greg Clark said that the decision was “devastating … for Swindon and the U.K.” as well as “a particularly bitter blow” to the thousands of workers at the plant and their families. He also said that he would assemble a “task force” to keep the workers employed.
Justin Tomlinson and Robert Buckland, two local members of Parliament, have said that they are “disappointed and surprised” at the announcement, but also that Honda has told them that “there is not expected to be any job losses or change in production” until the closure. In 2021, however, European production would shift to Japan, North America, and China. The restructuring will also affect production in Turkey, where Honda currently produces 38,000 Civic sedans a year.
Honda is not the first company to pull production in Europe in recent months. In January, Ford said it would be cutting thousands of jobs in Europe due to its profits being affected by new regulations and declining demand. In early February, Nissan announced that it would be producing its upcoming X-Trail SUV at its Kyushu site in Japan rather than the one in Sunderland, England. Gianluca de Ficchy, Nissan’s chairman in Europe, said that the change was not only because of Brexit; however, “the continued uncertainty around the U.K.’s future relationship with the E.U. is not helping companies like ours to plan for the future.”
Europe is not the only area being affected by changes in the automobile industry. Individual car sales in the United States peaked last year, an economic slowdown has decreased sales in China, and tech companies which are pursuing self-driven cars are increasing competition for traditional manufacturers. Peter Wells, a professor at the Center for Automotive Industry Research at Cardiff Business School, said that keeping up with the changes “is taking a huge amount of resource out of car companies. … It’s putting a strain on the whole sector.”