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Honda To Close Swindon Plant

February 19, 2019

By Paul Homewood

 

Honda has confirmed it will close its Swindon car plant in 2021, with the loss of about 3,500 jobs.

The Japanese company builds 160,000 Honda Civics a year in Swindon, its only car factory in the EU.

Honda said the move was due to global changes in the car industry and the need to launch electric vehicles, and it had nothing to do with Brexit.

Business Secretary Greg Clark said the decision was “devastating” for Swindon and the UK.

A fall in demand for diesel cars and tougher emissions regulations have shaken up the car industry.

https://www.bbc.co.uk/news/business-47287386

 

The simple fact is that there are two reasons behind this decision:

 

 

  1. The phasing out of tariffs on imports to the EU from Japan over the next seven years.
  2. The uncertainty surrounding diesel and petrol sales

 

 

The writing has been on the wall for some time in fact, with European sales of both Civics and all Honda models declining sharply since 2008, and now make up less than 3% of global sales. As a result, Swindon has had one of its two production lines shut for several years now.

 

 

http://carsalesbase.com/car-sales-comparison/#

 

With threats to ban diesels, and eventually petrol engined cars as well, the long term outlook for the Civic, and consequently Swindon, was always under threat.

Meanwhile, the new Honda EV, the Urban, will be made in China and Japan where Honda already plans to produce at scale.

Significantly, Honda have also announced that it would also cease making Civic at its factory in Turkey, which would be closed.

 

This is a sign of things to come, as Europe moves to sidelining diesel and petrol cars. Increasingly their EV replacements are likely to be built in Asia.

 

 

26 Comments
  1. Joe Public permalink
    February 19, 2019 5:21 pm

    Yesterday’s most hypocritical tweet:

    Especially when her previous scaremongering to her constituents is taken into account:

    https://www.theguardian.com/commentisfree/2018/jan/23/customs-union-single-market-britain-labour-brexit

  2. Barry Capsey permalink
    February 19, 2019 5:36 pm

    As USUAL, our dear EU ‘partners’ have stirred things up against us by reducing the tariff on Japanese imports to the EU to zero over a few years. Naturally that’ll save the sons of Nippon multi £billions, AND give the ‘remainiac’ army some APPARENT ammo to use against Brexit. NOT THIS TIME, children! It’s a cold hard business based/PROFIT decision. Indeed another Jap-owned factory WITHIN the EU is also to close. Sorry,
    but these closures are NOTHING TO DO WITH BREXIT!!

    • Dave Ward permalink
      February 19, 2019 6:12 pm

      “Sorry, but these closures are NOTHING TO DO WITH BREXIT!!”

      But they MUST be!!! – The BBC says so, and we know they are at the forefront of the campaign to stamp out “Fake News”…

      • Mike Jackson permalink
        February 20, 2019 10:16 am

        The closure has everything to do with the EU-Japan free trade deal. With zero tariffs and the “need”, as Honda see it, to cover their backs in the light of the current obsession with pollution and diesel and electric cars, it makes sense to concentrate production and to do so close to home and where your major market is likely to be.

        Which given those same obsessions is not likely to be Europe. Very soon.

        Whether the timing has anything to do with Brexit is another matter. With tariffs likely to be applied tomorrow (in marketing and production terms) and a possibility (too great to ignore) that your JIT supply line may come apart now is not a bad time to plan your exit.

      • George Lawson permalink
        February 20, 2019 5:42 pm

        The closures are surely the direct result of outrageous statements made by the British Government over the last couple of years.. First, the statement made by the headline grabbing Mr Gove who announced that the manufacturing of all internal combustion vehicles will end by 2040 in favour of electric vehicles, when anyone with half a brain knows that that is an impossible dream. And the second is the statement by the Department of Health that, after 75 years of diesel vehicles on the roads in Britain, with no apparent injury to our health, they have suddenly decided on very spurious research that diesel fumes are a danger to health. Inevitably diesel vehicle sales slumped as a direct result of such thoughtless stupidity, unbelievable stupidity that has led us to the inevitable closures in the industry with the resultant massive job losses. Let us all be clear, nothing could have been so devastating to the car industry than these silly statements which have no foundation in reality. It all becomes very depressing especially after we now learn from 110 lung specialists in Germany that their research shows no scientific proof that Nitrogen Oxide is a danger to health. Mr Gove is a dangerous loose cannon in his unabated support for anything ‘Green’ regardless of the effect on industry, jobs, and the wider economy that result from his wild statements. He is a danger to society. and should be relieved of his post without delay. Fortunately the Health Secretary has already resigned presumably before she was pushed.

  3. February 19, 2019 5:39 pm

    Green jobs eh?

  4. February 19, 2019 5:49 pm

    EVs are freighted with problems, range, charging, fire and explosive risk Li batteries, Cobalt demands, costs, and are quite unnecessary. Green solutions for the grossly exaggerated or, likely, non-problem of AGW.
    A moral model of today’s Green blob madness, kept going by groupthink and greedy profiteering!
    Wind powered electricity generation was the first example and there will be more until the Greenblob’s lies are recognised and their purveyors’ bluff is called.

    • February 19, 2019 5:58 pm

      Makes you wonder if the undisclosed rationale behind EVs is to keep people from freely moving about too much. If you can’t do 800Km a day, move closer to work, live in a city, or just get a job you can do from home.

  5. It doesn't add up... permalink
    February 19, 2019 8:05 pm

    Number one in the frame:

    Michael Gove, who announced a forthcoming ban on petrol and diesel cars
    Two – Phil Hammond, who has been adding to taxes on new vehicles and casting uncertainty on the future taxation of diesel models such as those made at Swindon
    Three – Sadiq Khan and his fellow travellers with taxes on cars going to London (and other cities)
    Four – Mark Carney, with his attacks on finance for new vehicles
    Five – the EU with its regulations demanding almost impossible standards and imposing fines on manufacturers that have to be paid for out of higher new vehicle prices (and which May and Gove will ensure we follow whether we make a proper Brexit or not)
    Six – the green climate change mafia, including the under investigation Lord Deben

    Why would anyone invest in vehicle manufacture in the UK given this array of antis? A bigger import bill beckons, and further de-industrialisation. What will we be selling to pay for it?

    (P.S.Paul – two dots are no better than three)

  6. Athelstan. permalink
    February 19, 2019 8:07 pm

    A sad day for Honda workers in Swindon, doubtless.

    The Japanese are shipping out, the calculation is a simple one, Japanese jobs before British workers, it is a lesson which the country must learn from. Alas, we sold out our British car industry and long ago and any cars we now manufacture in Britain the development and real money is not made here.
    All of it, off shoring manufacturing jobs is what our political poiicies have wrought and surely the green agenda is at the base of most of the problem, in that UK manufacturing is greatly hamstrung by the costs and electricity (and gas) price increases which have come about through our politicians insane drive to ‘green the nation’ and to make electrical generation exhorbitantly expensive.

    If we ever get out of the EU, then we need to refocus hard on doing what is best for Britain evidently that means cheaper energy production and supply provision, not aiding our competitors in China, Japan, Germany etc through adherence to the green policies of unilateral industrial suicide pact CCA 2008: and economic catastrophe all of it ‘the great green scam’ entails…Otherwise we are done.

    • HotScot permalink
      February 19, 2019 9:02 pm

      Athelstan

      I don’t entirely agree with you.

      Whilst we British love to think of ourselves as a great manufacturing nation, we left that behind a long time ago. And thank god for that or we would all be living on Chinese wages.

      Thatcher more than anyone recognised that if we were to compete on the global stage we could not possibly compete with cheap overseas land and labour. It was the intellectual might of Brunel, Logie Baird, Stephenson, Dunlop, Percy Shaw, Trevithick, Tim Berners-Lee, Alexander Graham Bell, Newton, Frank Whittle, Jethro Tull, Harry Brearley etc. etc. etc. that were important and the Intellectual Property that could spill from a simple invention licensed all over the world.

      She recognised the value of financing business rather than operating it and ruthlessly encouraged the City to invest and use our brains rather than our brawn.

      The UK’s ingenuity and intellectual competence, as well as our language, is valued the world over. Tragically, much of the country don’t appreciate it.

      Education is the way forward but, in my opinion, not simply engaging in university. We should be freeing up kids to think for themselves. Give them the tools to invent and the desire to observe. Help them dream of something better, not just conform to an agenda. Hammer in the three R’s in their early years then let the wee blighters loose!

      • John Palmer permalink
        February 19, 2019 9:08 pm

        +100!!

      • Phoenix44 permalink
        February 20, 2019 8:59 am

        Very true. You need capital to build a plant, and we are great at finding and mobilising that capital. The benefits of trade increase as you specialise.

        But instead of worrying about jobs in today’s industries (from an economic viewpoint rather than a human one) what we want are tomorrow’s jobs. Thus is the error the French made, and it has infected the EU and now the UK. Tomorrow’s jobs are likely to be more productive and thus higher paid. That’s how we get richer, not protecting yesterday and today jobs. Creative destruction.

      • Ben Vorlich permalink
        February 20, 2019 9:37 am

        I don’t know that it’s true to say that moving manufacturing overseas and taking the profits to a tax haven was of benefit to the UK or the only option. (West) Germany became wealthy makung stuff despite keeping much of industry at home, locally owned and despite a strong currency. It then prospered more from a weak Euro. Britain used oil revenues to maintain 3+ million unemployed and a high £ until Soros made a killing and things improved. No nation can gone on forever selling and delivering food to each other, just as it can’t survive selling loans / debts to each other.
        I think we’ve lost this current generation of school children and will have to concentrate on the under 5s and yet to be born generation (and ban reality TV and Youtube) if a new generation of inventors, innovators and improvers is to be created.

      • Derek Buxton permalink
        February 20, 2019 10:11 am

        “Hammer in the three Rs” I could not agree more. Far too many seem these days to be illiterate thanks to the “education System”. It seems from the outside to be pure brain washing not learning.

    • Adam Gallon permalink
      February 20, 2019 9:22 am

      Our British cars were simply crap.
      That’s why the industry went to the wall.
      I worked for a company that had Maestros & Montegos as company cars.
      Their reliability was abysmal. Their build quality was abysmal.
      “Monday” & “Friday” cars, continual strikes, incompetent management.

      • Duker permalink
        February 22, 2019 1:49 am

        Never had one of those early japanese cars did you…American cars were similar and Italy and France …..

  7. John Palmer permalink
    February 19, 2019 9:11 pm

    +100!!

  8. MrGrimNasty permalink
    February 19, 2019 9:48 pm

    This is just the beginning of a flood. EU policies have been undermining, the UK especially, for years.

    Fake IC engine pollution concerns and the premature ‘ban’, climate/expensive energy policy generally, loans/subsidies to Chinese steel and Turkish vehicle production, poorly considered trade deals, carbon trading schemes/costs, and goodness knows what else……….

    Expect a lot more airlines and manufacturing to go.

    As I said before, if some people consider that Brexit is economic self harm, why are the same people not screaming about the economic suicide of the ‘green’ obsession?

    If you don’t actually dig up materials and make stuff – you don’t create wealth. Trump for all his faults recognises that – MAGA. You can’t have a healthy economy based on state jobs and recirculating money in the services and information sectors.

  9. Phoenix44 permalink
    February 20, 2019 8:54 am

    Man who supports reasons for devastation is shocked by devastation.

    Amazingly enough if you say you want to stop non- electric cars being sold people will stop making them.

  10. February 20, 2019 9:07 am

    A big issue was probably with the PCP market both here and in the US due to low residual values – something that affects ALL car makers
    (50% of swindon production goes to us)
    http://www.genfkd.org/car-lease-bubble-huge-problem-auto-manufacturers
    https://www.zerohedge.com/news/2017-01-23/soaring-lease-returns-set-wreak-havoc-auto-industry
    And Fords share price?
    http://tinyurl.com/y4k3ctn6

    Dr North fills in the details
    http://www.eureferendum.com/blogview.aspx?blogno=87153

    • MrGrimNasty permalink
      February 20, 2019 12:21 pm

      Yes, since the car market last ‘crashed’ in the UK, it was revived with an unsustainable car loan credit bubble. This is why half of 20-30 year olds are driving around in high spec. Audis and VWs whilst moaning they can’t afford a house.

      They started to tighten up on the loans as it was obviously heading for another ‘banking crisis’ and that has also undermined the UK new car market.

    • Chilli permalink
      February 23, 2019 9:18 am

      Another factor in the downturn is the Hammond/Osbourne vehicle tax changes that came in on March 2017. Small cars registered prior to that date continue to pay between zero and £30 pa for their licences. However if those people want to upgrade to a new car they’re penalised by the new fixed £147 pa licence fee plus a first year penalty tax payment between £200 and £2000. Many have concluded they’re better off running the old banger for a few more years than upgrade to that shinny new Honda Xtrail or Kia Sportage.

  11. Gerry, England permalink
    February 20, 2019 1:45 pm

    The new car sales recently have been a bubble of credit that has if not burst is severely deflating. This is not just a UK thing, other countries have been doing it. Ford – allegedly a manufacturer – actually makes more income from servicing and finance. Just look at all the car ads on tv or in the press – headline, yours for only £xxx a month. After 3 years you can pay off what is owing or sign up for another car.

    China is probably going to be the only battery car market – partly because they have secured most of the cobalt – because they will work in their situation and offset their lack of oil.

    And don’t forget that it takes a lot of electricity to make a car so with the government morons committed to making ours more expensive, that may have been a small part of their decision.

    And as for an MEP knowing anything useful about anything, well……

  12. Ian permalink
    February 22, 2019 9:19 am

    Another angle:

    https://capx.us8.list-manage.com/track/click?u=70dad7ea7e522c40e022c29da&id=52bad3bd61&e=7511d4c957

    I lost interest a bit, though, when I got to:

    Innovation among the established car giants has slowed with the cars of today not hugely different to those made 20 or 30 years ago.

    What? That may be true in the US, but elsewhere, the only common denominator with today’s v/v cars of 20-30 years ago is that they have four wheels and an IC engine.

    • February 22, 2019 9:06 pm

      Sorry, I have to disagree with you on this. Cars have indeed barely changed in 50+ years. Look beyond the sculptured plastic dash and electronics and you’ll find about 95% of the car is the same – similar steel bodyshell, similar IC engine albeit with some electronics on it, similar gearbox with a few extra gears, similar suspension systems, same brake systems, same driveshafts/propshafts, wheels and tyres. similar cabin layout, boot and engine bays, fuel filler and tank. The seats are not much improved either, in fact the seats in my 1970’s and 80’s cars were more comfortable. The only real difference is in electronics and they are more often than not pointless or useless ‘enhancements’ put on to justify the annual price hikes. Sticking in a 7″ LCD screen that can link to a mobile phone or using 20″ alloys instead of 16″ steels are hardly major or fundamental breakthroughs in vehicle design.

      The biggest single improvement in passenger vehicle design in the last 100 years was the switch from a body on frame to a monocoque, most everything else has been a minor evolution. Even most of the EV’s currently available use virtually the same basic design with just the IC engine replaced with a motor. I’ve only seen a couple of cars recently that showed serious difference in design and they were EV’s with hub motors – no transmission, no drivetrain, no driveshafts, completely flat floors and no engine bay thus providing substantially more passenger space – they were small volume prototypes. So I would agree with the statement you posted from the article.

      However I would add that because something has not changed significantly in 50 years doesn’t make it a bad thing – it may simply show that the design was close to perfect 50 years ago and very little can be done to improve on that design other than window dressing.

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