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Honda closure adds to UK's Brexit gloom

February 19, 2019

Japanese car giant Honda has announced it will close its only car plant in Britain in 2021. Several carmakers have announced plans to trim UK operations, with concerns that a no-deal Brexit could disrupt supply lines.

A car transporter leaves the Honda car plant in Swindon
Image: picture-alliance/AP Photo/S. Parsons

Honda will shutter its operations in southwestern England in 2021, the Japanese carmaker announced Tuesday. The move adds to a growing number of car manufacturers scaling down operations in the UK.

The plant, near the town of Swindon, accounts for more than 10 percent of Britain's total car output, although it has struggled increasingly in recent years.

The announcement means the loss of 3,500 jobs in the UK.

Local lawmaker Justin Tomlinson, of the ruling Conservative Party, commented publicly on the apparent closure soon after the news broke, saying that he had spoken to the company. The Brexit-supporting member of parliament insisted that the closure was not Brexit related.

"It is a reflection of the global market," said Tomlinson. "They are seeking to consolidate production in Japan."

Speaking to reporters in Tokyo, Honda president Takahiro Hachigo said: "I'd like you to understand this is not related to Brexit."

Read more: Hard Brexit risks 100,000 German jobs: report

Leaving Britain

Honda's rival Japanese carmaker Nissan announced earlier this month that it was canceling plans to build the X-Trail SUV in the northeastern town of Sunderland. Nissan said explicitly that uncertainty around Brexit was a factor in its decision.

The absence of a withdrawal agreement — a so-called no deal Brexit — would likely mean the imposition of customs checks and tariffs as products enter and leave the UK.

The supply chain for most British cars crosses the channel several times as parts are shipped back and forth as part of a "just in time" supply arrangement.

Last week, the carmaker Ford said such a scenario would be "catastrophic for the UK auto industry and Ford's manufacturing operations in the country."

Read more: German businesses watch Brexit with bated breath

Brexit chaos drives Brits crazy

Meanwhile on Monday, Mercedes Formula One chief Toto Wolff said a no-deal Brexit could be a "nightmare scenario" for motorsports teams based in Britain.

"The way we get parts and services is just in time at the last minute ... taxes would massively damage the Formula 1 industry in the UK," Wolff said.

Visa and right-to-work worries were also high on Wolff's list of concerns, given the "26 nationalities in our team" who travel to several European races in the course of a season. Mercedes, a team ultimately funded in Stuttgart, but run out of factories in Brackley and Brixworth, is arguably the most obvious example of British F1 teams' ties to continental Europe.

Little time remaining

Ireland's Deputy Prime Minister Simon Coveney on Monday expressed frustration at the failure of Britain to ratify a deal it struck with Brussels in November.

"We have less than 40 days to go until the United Kingdom formally leaves the European Union, and we still don't know what the British government is actually asking for to actually get this deal ratified," said Coveney, who is also Ireland foreign minister, after holding more talks with EU colleagues in Brussels.

Read more: Brexit: Why is the Irish backstop so controversial?

The EU's chief Brexit negotiator Michel Barnieron Monday evening met the UK's Brexit minister Stephen Barclay and Britain's attorney general Geoffrey Cox as the search went on for a way to avoid a no-deal Brexit.

Prime Minister May has so far been unable to pass the Brexit agreement reached in December through the British parliament. Among the major sticking points is a failure to agree arrangements on the border between Britain and Northern Ireland should the regulatory arrangements between the two countries diverge.

rc/se (AFP, Reuters, dpa, AP)

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