In a recent news conference in Tokyo, Honda delivered the latest bit of bad news to a reeling British economy: the company’s manufacturing facility in western England will be closed in 2021. The news that the Swindon plant will shut down is especially disheartening given the timing. The looming specter of Brexit has cast a pall over the country’s entire manufacturing sector, and Honda’s decision doesn’t help.
Immediate Consequences by the Numbers
The impact of this development will be most keenly felt, of course, by those employed at the facility. 3,500 local jobs are likely to disappear with Honda’s departure. Company officials will start communicating with employees about the change immediately. Honda president and CEO Takahiro Hachigo said his organization “regrets” the decision but it was the best available course forward.
At the macro level, Honda’s car production will need to undergo a geographical shift. The Swindon factory, which produces the company’s Civic sedans, currently cranks out around 150,000 units annually. That output will shift largely to Japan, where Honda said the next model of Civics to be sold in the UK will be produced. The press conference also held talk of Honda “adjusting” its manufacturing unit in Turkey, a smaller but still significant source of Civic production.
Reasons Cited
Hachigo shied away from pointing the finger directly at the UK’s pending withdrawal from the European Union. Instead, allegedly, the decision was made based on factors like the need to increase electric vehicle production and better meet demand in other markets. “We still don’t know what sort of changes Brexit will bring at this point,” he said. “We have to wait until we have a better idea about the situation.”
For many, however, the writing is on the wall. It’s easy to see Honda’s decision as the latest in a string of manufacturing news clearly connected to Brexit. Nissan, for instance, has rolled back previously ambitious plans for a campus in England. Toyota and BMW are considering leaving their own facilities in the country. The threat to access to the broader European market that Brexit presents, it seems, is forcing multinational manufacturers to rethink the value offered by a British location.