It’s a tough time for manufacturers at the moment, with Brexit looming on the horizon, and now the industry has been dealt a bit of a serious blow with the announcement that Japanese carmaker Honda will be shutting its factory in Swindon by the year 2022, leading to up to 3,500 job losses.
According to a source close to the company, Honda will still be keeping its European headquarters in Bracknell in Berkshire, as well as its Formula One racing team operations in the UK, Sky News reports.
More than 100,000 Civic cars are produced at the Swindon plant, which is the brand’s only factory in the EU, and Honda has been making vehicles in the township for over three decades.
And although it’s being said that there are other factors aside from Brexit that have led to Honda taking this decision, the timing of the news is more than likely to be regarded as being closely linked to the fact that we could be left with a no-deal Brexit in just under six weeks.
Insiders are now saying that it’s likely that Honda will relocate its manufacturing arm from Swindon back to Japan, with the ability to guarantee tariff-free exports to the EU thought to have been one of the factors convincing the company to make what was no doubt a very difficult decision in the end.
Previously, Honda has said that leaving the EU without a Brexit deal in place would cost it tens of millions of pounds. Earlier this month (February), Theresa May tried to reassure industry leaders that the most likely outcome was still an agreed departure from the EU. She was, however, warned that companies such as Ford are now bringing plans forward to divert jobs and investment overseas.
These kinds of stories may well become more commonplace over the next few weeks and months, with recent research from the Institute of Directors (IoD) showing that 29 per cent of companies could in fact be forced to move operations abroad because of Brexit.
The study revealed that 16 per cent of IoD members had already put relocation plans in motion or were intending to in connection with Brexit, with an additional 13 per cent actively considering it. And although more bigger companies had already moved operations, smaller businesses were almost twice as likely to be now actively considering the idea of moving abroad.
Interim director-general of the Institute Edwin Morgan said at the time: “It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies. Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that no-deal would bring are entirely unproductive.”