UK Honda Plant Closure ‘A Devastating Decision,’ Says Minister

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Japanese carmaker giant Honda has announced that it will cease the production of Civic sedan model vehicles at its Turkey plant while closing the Swindon factory in the part of its plans to restructure its global manufacturing network.

Workers at the Wiltshire factory reacted angrily on Monday to the move at a time of turmoil for United Kingdom auto manufacturing and fears over the impact of Brexit.

The vehicle manufacturer announced on Tuesday morning the closure of the Swindon factory will see 3,500 job losses when the factory closes in 2021.

"This decision was not informed by Brexit", said Honda Chief Executive Takahiro Hachigo.

Honda is not the source of media reports on the plant closure, Teruhiko Tatebe, a Tokyo-based spokesman for the automaker, said by telephone.

Already this year, Jaguar Land Rover has announced 4500 job losses, Nissan has confirmed it will no longer build the X-Trail at its Sunderland plant and Ford has said there will be job losses.

For Honda, declining demand for diesel vehicles and tougher emissions regulations have also clouded its manufacturing prospects in Europe, which accounts for just 3 per cent of its global sales.

The company claimed in September it was "right behind" the plant, which makes 160,000 Honda Civics a year. According to Honda, 20 percent of Civics sold in the US are hatchbacks and 65 percent of the Civics produced in Swindon in 2018 were exported, 55 percent to the U.S.

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A source at the plant said it was awaiting official confirmation from Honda and had not been told anything about what it means for production in Merthyr.

Local MP Justin Tomlinson tweeted ahead of Tuesday's announcement that the decision had been made "based on global trends and not Brexit as all European market production will consolidate in Japan in 2021".

Honda has said the shock decision was nothing to do with Brexit however, industry experts have blamed Brexit uncertainty over the UK's future trading relationships. Under the deal, the bloc will axe 10-percent tariffs on cars imported from Japan in 2027.

Despite Honda's insistence that the closure is not as a result of Brexit, many have seen the continued uncertainty around it as a key reason for it.

Brexit talks may have pushed Honda over the edge to make the decision to close its European Union plant.

According to the Japan External Trade Organization, known as JETRO, some 869 Japanese companies operated in Britain as of October 2017, but many are concerned a no-deal Brexit would delay customs procedures and hit their trade operations.

The Swindon factory produces 150,000 cars per year and employs around 3,500 people.

Britain's largest trade union Unite said it would continue to consult with the company and fight to keep the site open, blaming the handling of Brexit for making it harder for companies to keep investing in the country.