On Tuesday, the Japanese carmaker mentioned that it will close a key manufacturing plant situated in the English town of Swindon. This plant consists of 3,500 people; hence thousands of jobs are going to be at risks. HMC (Honda) has made over 3 million cars in Swindon from the time its plant introduced 3 decades before. The plant that is going to shut down in 2021, at present produces around 150,000 Civics per year for more than 70 countries. Swindon is the Japanese organization’s merely car plant in the European Union. The reformation will even engage the business of Honda in Turkey that presently creates 38,000 Civic sedans in a year.
60 percent of United Kingdom trade is still uncovered to a Brexit shock
Honda stated that production will move to Japan, China, and North America. The President of Honda Motor Europe, Katsushi Inoue, mentioned in a report that the reformation is required to “accelerate our electrification strategy” because the auto industry looks for to conquering “unprecedented changes.”
The declaration made no indication to the decision of Britain to depart the EU, and the CEO of Honda Takahiro Hachigo said that the choice was not connected to Brexit. Nevertheless, vagueness about the future of Britain trading union with its chief export market is big cloud hovering over the car business.
BackDrop of Brexit
An autos expert, as well as professor, of strategic management at the Warwick Business School Christian Stadler, said that Brexit “must have been a factor” in the decision of Honda. In his words, “Companies from Japan and other countries were attracted to Britain because it gave them easier entry to the lucrative European market, through an English speaking country. At the moment, there is no deal in place to continue that after Brexit.”
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“The United Kingdom will not be able to strike better trade deals than it currently has before it leaves the European Union, so it starts to look like a less attractive place to build cars,” he added further. The plan of Honda in Swindon will shut down in 2021.
The United Kingdom government explained the plant shutting down as “a devastating decision for Swindon and the United Kingdom.” Greg Clark, the Business Secretary said in a report that it was “deeply disappointing that this decision has been taken now” as Britain is considered to be a leader in building the latest technologies required by the auto commerce.
Britain is situated to depart the EU in less than 40 days; however, the information of what will happen after that is uncertain. The executives of Car Company have cautioned that rolling out of the alliance without an agreement on March 29 will roar their supply chains as well as disrupt production.
BMW plans to shut down its Mini factory located in England for a month of preservation instantly after Brexit since it can’t be certain of receiving the parts it requires. Ford (F) having 13,000 workers in the UK have anticipated that an unmanageable Brexit will cost it $800 million in the year 2019.
Britain’s main car creator, Jaguar Land Rover, proclaimed plans last month, in order to decrease its worldwide workforce by 4,500. It is in addition to 1,500 employees who left the corporation last year. The corporation, owned by India’s TTM (Tata Motors), has also advised that rolling out of the EU would wash out over £1.2 billion ($1.5 billion) of its yearly profit.