This Site has taken a little flak from Brexiteers(?) after reporting then-current beliefs that the closure of Honda’s Swindon factory was to do with the UK’s departure from the EU.
Honda has since made an official announcement that the factory will close in 2021 – not the following year, as had been suggested – saying the move was due to global changes in the car industry and the need to launch electric vehicles, and had nothing to do with Brexit.
The BBC’s Dominic O’Connell, quoted in this article, said: “Brexit issues may be lurking in the background, but Honda’s real reasons for closing Swindon are about the future of the global car industry, not Britain’s future relationship with Europe.”
So there you have it.
But I wasn’t wrong to report what was being said at the time. Yesterday’s article featured a video clip of a disgruntled Honda worker laying the blame very firmly at Brexit’s door – and on the Conservative government that has handled it so badly.
That’s how the facts were understood then. This is how they are said to be now.
Who knows what we’ll hear tomorrow?
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I find it a bit strange that Honda are now saying that their decision to close this factory has nothing to do with Brexit given they were warning the opposite just over a year ago.
I think it far more likely that they very sensibly don’t want to create waves (Japanese business culture is very different to our own) and potentially rile future customers in the UK by telling the unvarnished truth. Just because Honda are closing down a factory in the UK doesn’t also mean that they no longer wish to sell cars here.
They’ll tell us next that Brexit is nothing to do with Brexit.
Strange they closed the factory in Turkey when they are trying to join the Eu, maybe the excess capacity in japan and anti diesel EU legislation had more to do with it after all.
@ Meryl Davids
Not really, given that the bulk of Honda cars produced in Turkey are sold to the Middle East and the former USSR territories, with both areas subjected to various sanctions which are more likely to increase in the future rather than decrease with knock-on effects on sales. Also it’s going to be many years before Turkey becomes a fully fledged member of the EU mainly because of it’s political instability and track record on human rights abuses, etc.
I could be wrong, but I strongly suspect that the two criteria linking both Turkey and the UK regarding Honda’s decision to pull out of production in both countries is political instability; albeit that the political instability in both countries is different both in extent and kind, not to mention cause.
But political instability is political instability, end of, in most companies book. They’ll absorb some… up to a point. From what I’ve read, Honda’s cut off point was not having access to a single market as this would seriously impact on their ‘Just In Time’ supply chain as 8o% of the parts needed to assemble their cars in Swindon come from the EU. This would end up costing them more in hard cash than it would be worth taking a chance on. Not surprisingly, they’re going to pull out. I can’t say I blame them. When all’s said and done it was a straightforward business decision. It’s not as though Honda didn’t give over a years worth of warnings that this would be case if the UK pulled out of the customs union or, more to the point, it appears more likely than not that this will happen. Businesses operate on the principal of more likely than not, and act accordingly. They can’t afford to act otherwise as they’re businesses not charities.
Brexit may, or may not, be the primary reason for Honda closing their factory in Swindon. But at the very least it was certainly the straw that broke this particular camel’s back.
An article in City A.M. states that the reason for the decline in car manufaturing in the U.K. was due to:
1) Japanese Trade Deal. This means that car manufacturing can return to Japan. Note, the cars are not being manufactured in the E.U.
2) Chinese demand. China’s economic slowdown, caused, in part, buy the trade war with the U.S.A. is having a huge effect on all car manufacturers Jaguar Lamd Rover suffered a slump of 40% in China!
3) Emissions Crackdown. Uncertainty about diesel policy and tough new E.U. regulations, regarding diesel have hit sales. Volkswagen sales dropped by as much as 40% in September. Competition for the emerging electric market is bleeding money from car manufacturers.
4) Br’exit. Uncertainty about supply disruption in the event of a no-deal scenario and the threat of World Trade Organisation tariffs are beginning to make the U.K. “look like a less attractive place for international companies to build cars.” The political uncertainty is making things worse.
So, there you have it. Much is changing. In today’s edition, it was reported that the Eurozone manufacturing sector has suffered its first downturn in almost 6 years. Make no mistake; things are not just bad here however our politicians’ lack of cohesion is making things far worse than they need be.