Honda’s Swindon plant closure confirmed but no mention of Brexit

As Honda confirmed the closure of its Swindon car plant on Tuesday, there was one key word missing from the Japanese car giant's statement: Brexit.

Speaking to reporters after the 8am announcement was delivered to the devastated workforce, Honda went even further, insisting that Britain’s looming exit from the European Union was not a factor in its decision.

"Brexit was not taken into account," Honda chief executive Takahiro Hachigo said at a press conference in Tokyo, as he laid out the reasons for ceasing manufacturing in the UK after 30 years.

Back in the UK, meanwhile, Honda's top local executive, Ian Howells, doubled down on the Brexit denial, pinning the blame on "global forces" and the need for the group to step up its drive towards electrification.

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And yet this latest crushing blow to Britain’s automotive industry comes less than 40 days before Britain exits the EU – and only a few weeks after Honda assured its UK workforce it would be “well placed to adjust to all possible outcomes” on Brexit.

Grim global forces

There’s no denying the grim global forces buffeting the automotive industry, from the decline in demand for diesel cars to a sharp slowdown in demand in China. But it is hard to accept that Brexit was not at least partly behind the decision that will see 3,500 jobs lost at the Swindon plant and many thousands more in the supply chain.

Flag-wavers on both sides of the Brexit debate seized on Swindon to reinforce their own arguments, with the Remain faction lamenting that “Project Fear” had become “Project Reality” while the pro-Leave faction insisted, like Honda, that Brexit was simply not an issue.

But it’s impossible to untangle Britain from Brexit, and Brexit from Britain. For global investors, it’s a crucial factor in how they believe their businesses will fare in the future. Even if supply issues, customs delays and tariffs can be overcome, there’s the increasingly unstable political climate to consider too.

The chaos at Westminster has been played out before a global audience in recent months and was humiliatingly on display again yesterday, as business secretary Greg Clark initially cancelled a speech at a major manufacturing conference in London to deal with Honda questions. He then cancelled his cancellation, turned up to deliver his speech and then high-tailed it back to the House of Commons to address MPs.

‘Devastated’

Declaring himself “devastated” at the “deeply disappointing” closure announcement, Clark said Swindon’s fate highlighted the urgent need for agreement on Brexit.

“Decisions like Honda’s this morning demonstrate starkly how much is at stake,” he told manufacturers at the conference.

Later, facing questions in the House of Commons, he told MPs the Japanese ambassador to the UK had written to the UK and the EU saying businesses could not cope with a situation in which the whole picture would only be clear at the last minute.

“I think that is a piece of advice we should heed,” said Clark, who is a strong supporter of prime minister Theresa May’s withdrawal deal.

For the unions, there's little doubt that the instability created by Brexit is destroying British jobs at an alarming rate. "While Brexit is not mentioned by the company… we believe that the uncertainty that the Tory government has created by its inept and rigid handling of the Brexit negotiations lurks in the background," said Unite's Des Quinn.

Global challenges

Although he acknowledged the global challenges faced by the Honda and the rest of the auto industry, he said: “If the government had delivered a strong and stable Brexit that protected the economy and jobs, we may well have been in a very different position today.”

With annual production of 150,000 Civic hatchbacks, about half of which are exported to the United States, the Honda plant accounts for one in 10 cars manufactured in Britain.

Just a fortnight ago, rival Japanese carmaker Nissan abandoned plans to make the X-Trail sports utility vehicle at its Sunderland plant and will instead keep production in Japan. It cited “business reasons” for its decision but conceded that the uncertainty surrounding Brexit “is not helping companies like ours to plan for the future”.

Vulnerable

As Honda sent its workers home for the day on Tuesday morning, thoughts in the motor industry turned to where next the axe would fall. Plants regarded as most vulnerable include Vauxhall’s Ellesmere Port site, which employs 1,100, along with Jaguar Land Rover’s Castle Bromwich factory, with 2,500 workers and Toyota’s Burnaston plant, which also has a workforce of 2,500.

Fiona Walsh is business editor of theguardian.com