Honda to close Swindon plant by 2021 with loss of 3,500 jobs

Car giant Honda has confirmed plans to close its UK factory in another major blow to the British car industry, with thousands set to lose their jobs.

The Japanese company told workers at the Swindon factory that following a “meaningful and robust” consultation, no viable alternatives to the closure have been found.

The plant, which employs 3,500 workers and is Honda’s only manufacturing presence in the UK, will close at the end of the current Civic model’s production lifecycle, in 2021. No jobs cuts are expected prior to that date.

Director of Honda UK 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.”

The Japanese carmaker had announced plans in February to leave the site in South Marston near Swindon. It said the change was not as a result of Brexit but because it is shifting focus to electric cars with most demand expected to be in Asia.

After consulting with the government and external consultants engaged by the Unite union, closure was deemed to be inevitable.

Prime Minister Theresa May’s official spokesperson said: “Clearly, this is a disappointing decision, despite the best efforts of local MPs, civic and business leaders and the trade unions since Honda’s initial announcement in February. We recognise this is a worrying time for affected employees, their families and businesses in the supply chain.”

Business secretary Greg Clark has set up a local taskforce which aims to ensure that employees are able to move on to new skilled employment. That taskforce is due to hold its next meeting next week.

Honda is one of a number of car manufacturers to cut back its presence in the UK this year. Nissan said in January that it would build its new X-Trail model in Japan instead of Sunderland, despite earlier reassurances.

Ford is planning to offer redundancy to more than 500 staff at its Essex office, while Jaguar Land Rover confirmed in January that it would cut 4,500 jobs from its 40,000-strong UK workforce as it attempts to deal with a sharp drop in demand in China.

Unite national officer for automotive industries Des Quinn said he believed there was a case for keeping the plant open and that the government would have provided public funding.

“It would have made Honda a global leader in emerging battery technology and in a strong position to exploit the growing global market for electric vehicles in the coming years,” Mr Quinn said.

“Instead we have this body blow which is nothing short of a betrayal of the workforce, customers and the wider supply chain which relies on Honda Swindon for work.

“Unite can only conclude that Honda is taking a strategic decision to retreat out of Europe in favour of protecting its North American operations and avoiding president Trump’s tariff threat on cars made in Europe.”

Honda said it was closing the Swindon factory as part of a broader global strategy “in response to changes to the automotive industry”.

The company also faces the reality of uncertain tariffs on vehicle exports from the UK after Brexit. Meanwhile, Japan and the EU recently finalised a trade deal that will see tariffs on Japanese vehicles imported into the trading bloc reduced from 10 per cent to zero.

In a statement on Monday, Honda said: “As previously communicated in February, Honda is accelerating its electrification plans, and as a result resources, capabilities and production systems for electrified vehicles will be focused in regions with a high volume of customer demand.

“This concludes the first phase of the collective consultation process. The second phase – which includes agreeing associate redundancy packages and identifying the impact on individual roles up until production ceases in 2021 – will begin immediately.

“Honda will also intensify its engagement with the Swindon taskforce set up by secretary of state Greg Clark, in order to work with government and a broad range of stakeholders to mitigate the impact of this decision on the wider community.”