Breaking news: Honda confirms shock Swindon plant closure

February 19, 2019

Japanese car giant Honda this morning confirmed it is to axe its Swindon manufacturing plant in 2021 with the loss of all 3,500 jobs.

The closure will be a devastating blow to Swindon’s economy, with the impact likely also to be felt in Honda suppliers in and around the town and other firms reliant on the plant. 

Honda, which officially announced the move at a press conference in Tokyo this morning, said it was concentrating on producing cars in its three largest markets of Japan, China and the US.

All workers at the Swindon plant were sent home today following a series of meeting at which the devastating news was broken to them.

The company denied the closure was linked to Brexit. Last year the plant produced 150,000 Civic cars – around a third of which were exported to EU countries.

The plant has been operating at nearly half its 250,000 vehicles annual capacity for several years. In 2008 it produced 230,000 cars on two assembly lines.

At that time it produced three models – the Civic, the Jazz super-miniand the CR-V sports utility vehicle. But production has been cut back several times since then and one of the assmbly lines mothballed. Employee numbers have also fluctuated. Jobs are also at risk at the plant’s suppliers in and around Swindon, with Honda this afternoon saying the total number of losses could double to 7,000 when taking the impact on its supply chain into account.

Some suppliers, such as seat manufacturer TS TEch in Highworth and logistics company SDC on a neighbouring site to the plant at South Marston, rely on it for most of their work.

Hondas ‘just-in-time manufacturing method means component firms either have to based nearby or use buffer warehouses, with parts fed straight to the assembly line in small batches.

Honda’s chief officer for European regional operations Katsushi Inoue said in a statement this morning: “In light of the unprecedented changes that are affecting our industry, it is vital that we accelerate our electrification strategy and restructure our global operations accordingly.

“As a result, we have had to take this difficult decision to consult our workforce on how we might prepare our manufacturing network for the future. This has not been taken lightly and we deeply regret how unsettling today’s announcement will be for our people.” 

Business Secretary Greg Clark called the closure “a devastating decision” for Swindon and the UK.

He added: “This news is a particularly bitter blow to the thousands of skilled and dedicated staff who work at the factory, their families and all of those employed in the supply chain. 

I will convene a taskforce in Swindon with local MPs, civic and business leaders as well as trade union representatives to ensure that the skills and expertise of the workforce is retained, and these highly valued employees move into new skilled employment.

The automotive industry is undergoing a rapid transition to new technology. The UK is one of the leaders in the development of these technologies and so it is deeply disappointing that this decision has been taken now.” 

Honda will also close a smaller plant in Turkey but retain its European adminstrative headquarters near Bracknell. The Swindon plant is its only car and engine manufacturing site in Europe. 

Last month Honda, which has invested around £2.5bn in the Swindon plant since it opened in the late 1980s, said it planned to halt production at the plant for six days in April to stockpile components and help it overcome border disruption after the UK leaves the EU.

The carmaker has been among the most vocal manufacturers to warn that their UK factories, which rely on the constant delivery of parts to enter production cycles, would be severely damaged if Britain leaves the EU without a trade deal, forcing the need for customs checks at borders. 

Two years ago Honda senior vice-president Ian Howells broke the firms traditionally tight-lipped approach to commenting in public on politcal matters by warning against leaving the EU customs union at a car industry summit.

Speaking at a summit staged by UK car industry group SMMT, he said: “We have just one hour of supply of parts at the side of the line, and half a day in local warehouses.

“From that description of the flow of goods you can see how new customs rules would harm our ability to produce cars.”

Mr Howells, one of Honda’s most senior executive in Europe, today told BBC Radio that the company had to respond to unprecedented changes in the global car industry driven by customer demand and legislation, including a big shift towards electric vehicles.

As a result, Honda had to target investment torwards its largest markets and while Swindon produced around 150,000 cars a year mostly for the UK and Europeam markets, its plants in Japan, China and the US were producing 2m cars.

With a five-year model cycle, a decision had to be taken now on where to base production of its 11th generation Civic, he said. Swindon currently produces the 10th generation of the iconic Honda small car – its introducion two-and-a-half years ago was the result of Honda's biggest-ever research and development programme and a shot in the arm for the Swindon plant following jobs losses over previous years. 

“We have to face reality. But this is not a Brexit-related issue for us. We do deeply regret the impact this will have on our people.

Honda’s move comes just two weeks after its Japanese rival Nissan said that it would no longer build its X-Trail sport-utility vehicle at its plant in Sunderland, the biggest motor manufacturing facility in the UK. Nissan insisted that its U-turn on the X-Trail was largely not related to Brexit.

Closing the Swindon plant and moving production back to Japan would guarantee tariff-free exports to the EU, industry experts said.

Honda bought the 370-acre former airfield site in South Marston – which had produced Spitfires during World War Two – in 1985 for use as a inspection operation for cars imported from Japan and bound for UK showrooms.

In 1989 it started producing engines on the site and three years later launched car production, with the Accord saloon as the first model to roll off the assenbly line.

At the time Honda’s arrival in the town was seen as a lifeline for the nearby – and much larger – Rover body panel plant, which was being scaled back as part of the retrenchment of the UK’s auto manufacturing industry. Under an earlier agreement between the firms, Honda used body panels made in the 1950s-built plant at Stratton for its Concerto model in return for a stake in Rover.

The plant is now owned by German car giant BMW and employs around 800 people making body panels and sub-assmblies for the Mini, which is assembled in Oxford. BMW too has expressed its alarm over the impact of Brexit – particuarlarly a no-deal version – on its UK activities.


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