Tuesday 19th February 2019

Honda confirms Swindon closure

Rumours are proven true as Honda announces 2021 closure for UK manufacturing facility

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UPDATE, 19/02/19 1000h:

While Honda at Swindon hadn't been running at full capacity for a while, the emergence of rumours around its closure still came as a surprise. Now news of its closure has been confirmed by Honda, with the factory set to close in 2021.

The BBC story features a statement from Honda Europe Senior VP Ian Howells, who has maintained that the move is nothing to do with Britain's imminent departure from the EU. Instead he said: "We're seeing unprecedented change in the industry on a global scale. We have to move very swiftly to electrification of our vehicles [see the Urban EV] because of demand of our customers and legislation.

"We've always seen Brexit as something we'll get through, but these changes globally are something we will have to respond to. We deeply regret the impact it will have on the Swindon community." Further details have suggested that the UK (and more broadly Europe) is not worth the investment from Honda; don't forget that 90 per cent of the Civics made each year in Swindon are exported, with a lot going to America.

Honda is said to be consulting immediately with affected employees, but today all of the Swindon workforce has been sent home. A bleak day for UK car manufacturing, then, in what is already looking a pretty solemn year given the Nissan news. We'll keep you updated with any further developments.

Full Honda statement here.

 

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ORIGINAL STORY, AS REPORTED 18/02/2019, 1500h:
Honda's assembly plant in Swindon has been one of the great UK manufacturing success stories since it first opened in 1985. Once upon a time it was producing 230,000 cars a year, with Accords, Jazzes, CR-Vs and Civics all being built there. While now down to just the Civic, it continues to hold a special significance to PH as the place where all Civic Type Rs are built.

Now, however, reports are emerging that Swindon may have just three years left as a manufacturing facility, potentially putting 3,500 jobs at risk. The story was first reported by Sky News, and has been picked up elsewhere in the motoring media, and suggests that a plan outlining the closure could be detailed tomorrow.

Why has this happened? A variety of reasons, as is often the case. There are, of course, the concerns over manufacturing and import/export as a result of Brexit, as well as what President Trump might do about tariffs on European-built cars. The Civic is huge in America, and so that could be a consideration. The decline in the demand for diesel is also thought to have contributed.

The most significant factor, however, according to Autocar at least, is believed to be Japan's recently signed trade deal with the European Union. Previous tariffs that applied to cars made in Japan for the EU will be scrapped by the end of this year; with the UK set to have left by then, the financial benefit for European sales to having a factory here is reduced. The Gezbe facility in Turkey, which also builds Civics, could prove a cheaper location to build and distribute the cars.

For now, there's nothing official from Honda. A statement issued this afternoon said: "At this point, we are not able to make any comments regarding the speculation. We take our responsibilities to our associates very seriously and will always communicate any significant news with them first." We'll update the story when there's more information.

[lee_erm]

As the article states. The new Japan, EU trade deal must be a large contributing factor.

The irony is the headbanging right wing will blame the demise of Diesel as the reason. Despite Honda sales being predominantly petrol.

Edited by lee_erm on Monday 18th February 17:14

[normalbloke]

Thread already running...as you’d say.

[Reciprocating mass]

Thread number 3 yay

[Hugh Jarse]

EU Japan free Trade deal.
UK not a LCC.
+ Brexit no deal inevitable.
Why duplicate factories?

[JerryF]

How sad, it's time we supported industry on our shores.

Fed up of reading articles on German cars......when we are in recession and can't afford to pay our mortgages than maybe we will all wake up. We can't complain about Nissan, JLR and Honda if we don't buy their products.

[tim milne]

JerryF said:

How sad, it's time we supported industry on our shores.

Fed up of reading articles on German cars......when we are in recession and can't afford to pay our mortgages than maybe we will all wake up. We can't complain about Nissan, JLR and Honda if we don't buy their products.

I know there's another thread on this elsewhere, but this isn't about whether we buy Hondas or German cars in the UK. It's about locating a manufacturing plant within a market of 450 million people, not ours of 65 million.

I'm sure for Honda, the EU/Japan trade deal has been a contributing factor, but the UK no longer being in Europe negates the main reason for opening a factory here.

[expat47]

I wouldn´t be surprised if the majority of emloyees at Swindon had voted for brexit.........

[samoht]

Take one plant operating at half capacity "Back in 2008, Swindon produced more than 230,000 cars annually, but with production of the Accord, plus the Jazz and CR-V, since moved elsewhere in the world, that number has nearly halved." (Autocar)
- remove the current 10% tariff on cars imported from Japan over the next 7 years
- add the threat of tariffs on cars imported to the US
- add the threat of tariffs on cars imported to the EU27 from the UK
- add the threat of disruption to the supply chains supplying UK factories from EU27 suppliers
- slash demand for european-market specific diesel engines
...
and voila, one UK plant closure, sadly.

Edited by samoht on Monday 18th February 19:20

[Jellinek]

samoht said:

Take one plant operating at half capacity "Back in 2008, Swindon produced more than 230,000 cars annually, but with production of the Accord, plus the Jazz and CR-V, since moved elsewhere in the world, that number has nearly halved." (Autocar)
- remove the current 10% tariff on cars imported from Japan over the next 7 years
- add the threat of tariffs on cars imported to the US
- add the threat of tariffs on cars imported to the EU27 from the UK
- add the threat of disruption to the supply chains supplying UK factories from EU27 suppliers
- slash demand for european-market specific diesel engines
...
and voila, one UK plant closure, sadly.

Edited by samoht on Monday 18th February 19:20

Any one or god forbid all of Ellesmere Port, Bridgend, Dagenham and Castle Brom could follow Swindon. The damage won’t be limited to a single plant.

[Alucidnation]

Reciprocating mass said:

Thread number 3 yay

Yes but this one has a 'RE:', so makes it more important than the others, which will probably be deleted.

[anonymous-user]

expat47 said:

I wouldn´t be surprised if the majority of emloyees at Swindon had voted for brexit.........

Doubtful, that’ll be those up t’north

[MrLou]

It's Gebze in Turkey, not Gezbe.

I have the pleasure of working, in the aero engine industry, with colleagues in that city. I can say that they're a fine and hard-working bunch of men and women.

[Earl of Petrol]

It’s a shame and I’m not sure where this will end. 40 years ago manufacturers avoided investment in UK plants for entirely different reasons. Now on the back of peak performances in production numbers and sales we have the most unwelcome news. BREXIT is a factor in this, the decline in diesel sales adds to that (although all things being equal shouldn’t petrol, EV and hybrid sales increase correspondingly?). It’s proven that the UK plants and workforce can produce world class quality, fit to be exported anywhere. I really hope that this and the pulling of the new X-Trail from Sunderland is the beginning and the end of it. However I am worried, but proud of our car industry and what it can create.

[Omega1987]

Very dissapointing news and sad to see some remainers gleefully using this as a political football when workers and their families now face a period of hardship.

I was hoping to upgrade to a FK8 Type R in the future. I wanted one mostly for its dynamic brilliance but also because it was built in the UK. Following this news I don't think I'll bother.

Edited by Omega1987 on Monday 18th February 22:02

[Zombie]

Omega1987 said:

Very dissapointing news and sad to see some remainers gleefully using this as a political football when workers and their families now face a period of hardship.

As opposed to Brexster's gleefully calling Remainers names and shouting "Project fear" Ad-nauseam for the last 2 years?

I am not gleeful. I am fg apocalyptic with the Politicians who lied, the leave campaigners who lied cheated and ultimately subverted what was supposed to be a democratic vote and, yes, I am bloody angry with the halfwits who swallowed their BS and voted for brexit.

The same halfwits and berks who have subsequently bleated "project fear", "brexit means brexit", "will of the people", "it's done, we just need to get on with it" in spite of the promised unicorns and rainbows they initially voted for vanishing into a fog of blue passports and intangible sovereignty.

And now that "project fear" is fast becoming demonstrable fact, Remainers are "gleeful"?

I'm inclined to suggest you move on in short, jerking movements.

As for "face a period of hardship" WTF else do you think those workers will do? Walk into another manufacturing job? Where, exactly? The promised Unicorn Factory 'down road that unfreezes chlorine washed Moog and Marty for the UK's sovereign edification?

Or maybe Dyson's new red white and blue tartan paint plant? I'm sure there will be a Brexit Celebration Edition Vacuum on offer - with a Union Jack colour scheme and patriotic fake news (imprinted) filter.

Better yet, they could tend the bar in Wetherspoons?

"One pint of rightwing spam and nostalgia with an info-zine of fascist fantasy coming right up, Sir"

But is this land of opportunity likely to present itself before or after a skilled workforce have lost their homes?

Most will be 3 months (paychecks) away from having their homes repossessed. That hardship you so willingly dismiss will be both prolonged and sustained, you utter cretin.

Edited by Zombie on Tuesday 19th February 02:37

[nadger]

Omega1987 said:

Very dissapointing news and sad to see some remainers gleefully using this as a political football when workers and their families now face a period of hardship.

I was hoping to upgrade to a FK8 Type R in the future. I wanted one mostly for its dynamic brilliance but also because it was built in the UK. Following this news I don't think I'll bother.

Edited by Omega1987 on Monday 18th February 22:02

Believe me, there is absolutely no glee in this at all. Only extreme sadness that this has happened as a result of Brexit, which remainers wanted to avoid for, amongst others, precisely this reason!

[samoht]

Earl of Petrol said:

the decline in diesel sales adds to that (although all things being equal shouldn’t petrol, EV and hybrid sales increase correspondingly?).

Diesels are a European particularity. Honda sells the Civic worldwide (North America, Europe and Asia), but only with a diesel engine in Europe. So if you have to have a European-specific engine factory making diesel Civics, you may as well put it somewhere in the EU. Somewhere like, say, Swindon.

However, if you then decide to phase the diesel engine out of your cars completely ( https://europe.autonews.com/article/20181128/ANE/1... ), then you get the extra benefit that your 'world car' has a common range of petrol and hybrid drivetrains, wherever it's sold. Since you already have factories making the petrol hybrid drivetrains in Japan and the US, why not just close down the European diesel factory and import the engines from Japan?

Also, the market adapts to almost anything in the long run, but sudden shocks cause disturbances. At present, buyers may be holding back and waiting to see which way government policy blows on diesels. Also, it's an open question how to replace the efficiency of diesel combustion for larger cars in sustained motorway cruising. So the market is slightly suppressed until it's had time to discover, digest and adapt to new government restrictions on diesels / cars in general, especially for mid-size and upwards SUVs like the X-Trail.

[catcha]

tim milne said:

I know there's another thread on this elsewhere, but this isn't about whether we buy Hondas or German cars in the UK. It's about locating a manufacturing plant within a market of 450 million people, not ours of 65 million.

I'm sure for Honda, the EU/Japan trade deal has been a contributing factor, but the UK no longer being in Europe negates the main reason for opening a factory here.

Their other factory is in Turkey. Turkey is not in the EU.....

[Jim the Sunderer]

If a Turkish built Honda is as bad as this Turkish built oven, Doris is going to be disappointed.

[borat52]

It’s simple, European car sales are down, Japan is going to be able to export to the EU tariff free very soon and the only reason they located here in the first place was a combination of circumventing the external tariff and local government incentives.

If this decision was in any way brexit related they would wait to see what the future relationship of the U.K. with the EU is before going to this expense.

You’ll see production move to japan not the EU just like Nissan are doing.

I’d wager the timing is political, wouldn’t surprise me in the slightest that as part of the EU/Japan trade agreement the EU persuaded Japanese companies to announce U.K. closures right on brexit date to weaken the resolve of the public. That’s the sort of clandestine tomfoolery the EU revels in.