Japanese manufacturer says no "viable alternative" could be found to keep plant open; 3500 workers set to lose jobs

Honda has confirmed that it will close its manufacturering plant in Swindon in 2021, saying that it could not identify any "viable alternatives" following a period of consultation.

The Japanese firm announced plans to close the factory, which currently builds the Civic, in February, putting 3500 jobs at risk. At the time, it said the move was due to “unpredecented changes in the global automotive industry”.

In its latest statement, Honda said that the need to accelerate its electification plans meant that "resources, capabilities and production systems for electrified vehicles will be focused in regions with a high volume of customer demand".

Honda says it has undertaken a "meaningful and robust" consultation period since then, which included contributions from the UK government, unions and other outside groups. But it said that phase has now concluded, and staff at the factory were informed this morning (13 May) that the closure would go ahead in 2021, when the current Civic reaches the end of its lifecycle.

The Swindon factory closure: how Honda got it so wrong

The firm will now begin the second phase of the consultation, which includes finalising redundancy packages and "identifying the impact on individual roles up until production ceases in 2021". Honda said it will also consult with the Swindon Task Force set up by Secretary of State Greg Clark to "mitigate the impact of this decision on the wider community".

The closure would result in 3500 job losses. The Wiltshire factory, which builds only the Civic, currently produces 150,000 cars annually – far from its capacity of 250,000 units.

The closure is a huge blow for the government’s hopes of the UK remaining an established car manufacturing hub post-Brexit. While Brexit hasn't been cited as a reason for Honda’s plans, it is the latest factor in a perfect storm for the industry.

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Analysis: Brexit and the UK car industry

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

Honda has been slow to react to electrification compared to its rivals. It launched its CR-V Hybrid last year but doesn't offer any electric models, although its Urban EV, a retro-styled electric city car, is due to go on sale late this year.

The firm’s intention is to consolidate much of its manufacturing back to its home country of Japan. This will allow it to ship to China – one of the markets where “high production volumes” are expected – fairly easily.

The deal that the Japanese government has recently struck with the European Union (EU) is likely to be another motivating factor. It means tariffs on Japanese-made cars coming into the bloc's 27 member states will be phased out from this year, reducing the financial benefit of Honda having a UK hub.

The threat of import tariffs for European-made cars from Donald Trump’s administration will also be a factor, because the US is one of the Civic's main markets.

A statement issued by the Society of Motor Manufacturers and Traders (SMMT) following the first news of the plant's closure in February read: “Today’s announcement is a huge blow to UK automotive manufacturing, and for the Honda plant’s highly skilled and productive workforce. Whilst production will continue in Swindon until 2021, giving government and industry time to help affected employees and the local supply chain which supports a further 10,000 jobs, this is, nevertheless, devastating news."

“The challenges facing Honda are not unique," SMMT chief executive Mike Hawes said. "The global automotive industry is facing fundamental changes: technological, commercial and environmental, as well as escalating trade tensions, and all manufacturers are facing difficult decisions. The UK should be at the forefront of these changes, championing its competitiveness and innovation, rather than having to focus resources on the need to avoid a catastrophic ‘no-deal’ Brexit.”

Honda's statements have made no mention of Brexit or falling demand for diesel cars – two things that have been recurring in other car makers’ reasoning for problems. 

Honda of the UK Manufacturing director Jason Smith said: “It is with a heavy heart that today we confirm the closure of Honda’s factory in Swindon. We understand the impact this decision has on our associates, suppliers and the wider community. We are committed to continuing to support them throughout the next phases of the consultation process.”

Honda of the UK Manufacturing, which was established in Swindon in 1985, has received a total investment of £1.5 billion across its numerous buildings. It mothballed half of its plant after sales failed to recover following the 2008 financial crisis and then decided to produce just the Civic, with the Jazz and CR-V moving elsewhere in the world.

Back in 2008, Swindon produced more than 230,000 cars annually, but that number has now nearly halved.

Read more

The Swindon factory closure: how Honda got it so wrong

Honda Civic 2019 review

Honda to slash production in Swindon, placing 340 jobs at risk

Honda Accord axed in the UK

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Comments
114

18 February 2019

Honda would seem to be jumping the gun somewhat, no?

With us being within the EU, and the resultant US tarrifs, being the thing killing off the Swindon factory?

18 February 2019
CarNut170 wrote:

Honda would seem to be jumping the gun somewhat, no?

With us being within the EU, and the resultant US tarrifs, being the thing killing off the Swindon factory?

No, it is Brexit killing it you dimwit.

18 February 2019
Cheltenhamshire wrote:
CarNut170 wrote:

Honda would seem to be jumping the gun somewhat, no?

With us being within the EU, and the resultant US tarrifs, being the thing killing off the Swindon factory?

No, it is Brexit killing it you dimwit.

This is very sad news if true. British manufacturing is in long term decline due to cost pressures.

Did you not read the article Chelthamshire? There are a number of important reasons given, and yes Brexit is one of them. No mention of declining sales, the styling launched in 2006 has led to sales 1/3 of the level from before - Honda dropped the ball, not enough people liked the devisive styling, so they should take blame for a huge proportion of the issue.

I'm pretty sure you wouldn't call anyone a Dimwit to their face, so maybe time you grew up eh?

19 February 2019

Well said Paul. These decisions were made months ago, awaiting the right oportunity to announce and deflect blame. McLaren and Aston to name but a few are expanding production post Brexit! And in the Financial Sector, yes there are going to be job losses, but also job creation, because as every intelligent person knows, where there is change, there is opportunity. Your either a defeatist, or an opportunist. I am the latter. And when the British people voted on Brexit, they voted to be opportunists! If your scared, we will carry you!

19 February 2019
Boris9119 wrote:

Well said Paul. These decisions were made months ago, awaiting the right oportunity to announce and deflect blame. McLaren and Aston to name but a few are expanding production post Brexit! And in the Financial Sector, yes there are going to be job losses, but also job creation, because as every intelligent person knows, where there is change, there is opportunity. Your either a defeatist, or an opportunist. I am the latter. And when the British people voted on Brexit, they voted to be opportunists! If your scared, we will carry you!

 

You’ve got your head in your sand, just like your namesake. Why don’t you go down to Swindon and share some of your optimism with the workers there?

Leaving the EU is an act of faith for Believers, increasingly divorced from reality.

19 February 2019

Muppet! Never mind head in the sand, your head's up yer arse!

The UK is the easiest place in the UK to sack a workforce/ close a factory.  I reckon this would have happened if we had voted to remain, likewise Nissan's deciscions NOT being related to the Free Trade Agreement.  

Had you not noticed that the Honda Turkey plant was closing? That'll be down to Brexit obviously.

 

19 February 2019
Boris9119 wrote:

Well said Paul. These decisions were made months ago, awaiting the right oportunity to announce and deflect blame. McLaren and Aston to name but a few are expanding production post Brexit! And in the Financial Sector, yes there are going to be job losses, but also job creation, because as every intelligent person knows, where there is change, there is opportunity. Your either a defeatist, or an opportunist. I am the latter. And when the British people voted on Brexit, they voted to be opportunists! If your scared, we will carry you!

 

ROFLMAO - how many people can afford Astons/McLarens?  "And when the British people voted on Brexit, they voted to be opportunists!" - nope, they were turkeys voting for christmas

18 February 2019
Cheltenhamshire wrote:
CarNut170 wrote:

Honda would seem to be jumping the gun somewhat, no?

With us being within the EU, and the resultant US tarrifs, being the thing killing off the Swindon factory?

No, it is Brexit killing it you dimwit.

 

 

Being rude and 'right' is charmless, if correct. But being rude and even half-wrong is...well....ungentlemanly, if not dimwitted oneself. 

Manufacturing and business is NEVER for keeps: it shifts, it moves, expands and contracts. Staying in the EU would appear to be no good reason for Honda to maintain an increasingly marginal base in Swindon when they can import their global products into the EU with zero tariffs. They're also threatened with higher tariffs from Mr Trump on EU-produced cars. It's just a case of 'global planning'.

This is what happens when our car industry is almost exclusively owned by people who aren't British and don't live here. Why we are surprised or disappointed seems odd to me: the risk is a built in fact of life for UK Plc..

19 February 2019

I quote thus:

"Honda said on Tuesday that it will close its assembly factories in Gebze, Turkey and Swindon, England, as part of a global restructuring to improve capacity utilization.Both factories build the Civic compact car – the hatchback is produced in Swindon and the sedan in Gebze. Honda said the plant closures by 2021 were planned to coincide with the end of the current Civic's lifecycle.“This is not related to the slowdown in the Turkish economy,” Honda said in a statement.Honda said it will focus production on its higher volume regions of China, Japan and the U.S., where it would invest in new electrified cars."

18 February 2019
Cheltenhamshire wrote:
CarNut170 wrote:

Honda would seem to be jumping the gun somewhat, no?

With us being within the EU, and the resultant US tarrifs, being the thing killing off the Swindon factory?

No, it is Brexit killing it you dimwit.

 

Who is the 'dimwit'? Looks like you didn't even read the article.

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