The government today called Honda’s decision to close its Swindon car manufacturing plant a “bitter blow” for the UK’s suffering car industry.
Honda earlier confirmed reports that it intends to shut the factory in 2021, putting 3,500 British jobs at risk in the process.
It blamed “unprecedented changes” to the automotive industry that will now see it switch its focus onto electric vehicles, a move that renders the UK “no longer viable”.
“This is a devastating decision for Swindon and the UK,” business secretary Greg Clark said this morning.
“As Honda have said, this is a commercial decision based on unprecedented changes in the global market. Regardless, This news is a particularly bitter blow to the thousands of skilled and dedicated staff who work at the factory, their families and all of those employed in the supply chain.”
Like Nissan is doing with the X-Trail, Nissan is moving production of its Civic to Japan.
It produced 150,000 Civics a week in its Swindon plant.
“The automotive industry is undergoing a rapid transition to new technology,” Clark added. “The UK is one of the leaders in the development of these technologies and so it is deeply disappointing that this decision has been taken now.”
Honda’s electric car strategy will see it move activity only to regions where it expects to be able to hit high production numbers, which do not include the UK.
“Under this proposed restructure, Honda UK Manufacturing’s [HUM] current role as a global manufacturing hub may no longer be viable,” Honda warned.
President of Honda Motor Europe, Katsushi Inoue, said: “In light of the unprecedented changes that are affecting our industry, it is vital that we accelerate our electrification strategy and restructure our global operations accordingly.
“As a result, we have had to take this difficult decision to consult our workforce on how we might prepare our manufacturing network for the future. This has not been taken lightly and we deeply regret how unsettling today’s announcement will be for our people.”
HUM director Jason Smith added: “We understand the impact this proposal will have on our associates, wider supplier base and the local community. We are committed to supporting associates to help them through this difficult time.”
The BBC reported that workers at the Swindon plant have been sent home for the day after learning of the plans.
Justin Tomlinson, Conservative MP for North Swindon, said yesterday that the decision was “based on global trends and not Brexit”.
It comes after Nissan opted to move production of its new X-Trail model from Sunderland to Japan instead, citing industry headwinds.
Both manufacturers have shared difficulties, according to Christian Stadler, professor of strategic management at Warwick Business School, who pointed to a global slowdown hitting demand in the US and China.
“These difficult conditions will put pressure on companies to be more competitive with their prices,” he added.
“That is bad news for British car manufacturing if vehicles are subject to new tariffs after Brexit, as Japan's new deal with the EU could soon make it cheaper to build cars elsewhere.”
Honda said it would start consulting on its plans today.