Nissan’s Sunderland plant would have been shut down if the manufacturer hadn’t struck a deal with the Government after the UK’s vote to leave the European Union (EU).
A report by Bloomberg alleges that an insider of the brand’s discussions with the Government revealed that Nissan told officials that the plant would eventually close, and the construction of the next-generation Nissan Qashqai and Nissan X-Trail would have been placed elsewhere.
The plant currently employs more than 7000 people and is the largest car producing facility in the UK. It was recently announced as the factory where the two new models would be produced, following negotiations with the Government. The results of these talks have since been declared as open to all car manufacturers in the UK.
Greg Clark, the UK's business secretary, is under pressure from the shadow cabinet to publish his letter to Nissan, but he has so far refused to do so, saying the letter contains "sensitive commercial information".
Clark’s letter to Nissan has become a contentious topic in parliament, as Labour MPs call for the publication of the Government’s deal with Nissan and other car makers. Clark said on the BBC’s Andrew Marr show that UK car makers would be immune from any export tariffs that would come about as a result of Brexit, but it is as yet unclear if this is the full extent of the offer.
BMW and Honda have both announced that they see no reason to leave the UK as a consequence of Brexit. However, several manufacturers, including Ford, Honda and Suzuki, recently raised the prices of their cars in response to the fluctuating value of pound sterling.
A BMW spokesman said: "The situation regarding the UK’s future trading relationship with the EU and other countries remains uncertain. Uncertainty is not helpful when it comes to making long-term business decisions. However, unlike Nissan, we are not in the situation where a major UK investment decision needs to be taken imminently."
"Of course we continue to monitor the situation very closely but for the moment, the BMW Group continues to operate “business as usual” at its four manufacturing bases in the UK."
A Nissan spokesman claimed that this was not the case, but Autocar is waiting on an official statement from the brand. It is not yet known where else would have potentially produced the Qashqai and X-Trail, had a deal not secured Sunderland's production of the models.
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Nissan, and the UK manufacturing businees vs Brexit
As for the motor industry in the UK, it had reached a wonderful peak last year with premium products, volume quality products and innovative specialist vehicles unseen in the UK at any time since automotive history began. The UK has chased international as well as EU markets with increasing success, as those markets have found the product output to be on a par with the worlds best ( German on the whole). Brexit has put some of this at risk, and may well lead to retraction from some markets as costs rise and innovation potentially becomes stunted.
Let me explain how innovation may be stunted....
One key risk is engineering standards. These need to be internationally recognised for safety and emissions control.
There are largely three sets of standards: EU, US and Japan.
Being able to meet all three is not easy. Being involved in at least one area to influence and control development of standards is a key asset. Walking away from the EU table will make this more difficult because the UK industry is less able to influence using UK innovation to assist in setting standards.
The German industry has used the EU very well for decades to make sure that standards are set so that they can meet these with their new technology first. By being first to market with all sorts of innovation like that allows them to gain a commercial advantage. Airbags, die cast alloy crumple zones, DPF, all of those started out in Germany, became law and bingo: business thrives on the back of it. The UK was just beginning to learn how to exploit this. It took years to see how it could be done and anyway needs innovation paid by current success to apply it. Bang goes that benefit.
Turkeys...Christmas....gobble gobble.
PS I bet any other industry has the same issue: Food processing, big Pharma, AIRBUS whatever...what a frightful mess.
Poochy222 wrote:
Okay Preachy, you've had your turn. Now answer me this. What makes it a good idea to be part of a corrupt and undemocratic EU which threatened us to try to force us to stay as a member and keep paying them, and now promises retribution against us for wanting to have the right to decide our own destiny.
If an individual, who is doing business with another individual, tells that second individual that if they cease their business arrangement they are going to get their house burned down, the police will quite rightly come along and put that first individual away for extortion. That is a protection racket and is that sort of thing is run by gangsters.
Do you really think that those are the kind of people with whom we should be planning the future of our country? Do you think that those are people who have our best interests at heart? Because I don't, and I am very dubious about anybody who does. I think they just wanted us to pay up and shut our mouths, like good little victims.
We have just about bugger all influence in the EU. They take no account whatsoever of our needs or desires. The only way we ever get to do something that we want is by having an opt-out and doing the opposite to what the rest of them are doing. And once the single European state arrives that veto would be taken away tout de suite, as we would be saying in our new language.
As to this talk of being fearful of competition from Eastern Europe. If it's that amazing why do so many want to come over here and fear not being able to once we've left? I'm all for selecting people to come here if they have skills of which we can make use, wherever they may come from. But if they are all such wonderful, talented and dedicated workers then surely their own countries should be beating the balls off poor, incapable, needy Britain as lands of opportunity for all. I certainly don't see why we need to leave the doors open for them to come as they please.
I actually believe in this country, I think we will be better off out of the EU and will make Britain great again. I don't believe that we need to be anybody's slave, so that we may hope to get fed just enough to survive. I believe that Britain can be prosperous on its own account and by its own efforts.
But frankly I would consider it a bargain to be out of that cesspit at any price. And I do not wish to retain any form of membership to their little club of gangsters. All the negotiating that needs to be done is to agree to have no trade tariffs either way. We don't need to be in their single market, playing by their corrupt rule-book. We'll buy and sell with them, but we won't share the shop.
You may want to do Britain down, and ramble on about how we can't survive on our own, but I do not subscribe to that point of view. I believe that we can tell the gangsters that we aren't going to pay their protection money any longer, that we are going to look after ourselves from now on.
We are going back to being Great Britain, and we are going to be just fine.
So nice to hear from someone
Business likes nothing more than stability. Brexit massively disrupts this, that is why the vast majority of business were against it. Whilst bankrolling private car companies is not what governments like to do, the alternative (increased unemployment, reduced economic output, outflow of capital and investment) costs much more and is hard to reverse.
A substantial proportion of people who voted for Brexit wished to regain control of our higher courts, remove control from European parliament and similar entities. Many did not vote to leave the common market however. It would be best if the pro-brexiteers realised that some form of compromise (leave EU perhaps but negotiate to remain in the common market) is going to be the optimal outcome and accept compromise on some of their more jingoistic nonsense. The rest of the world isn't going to be suddenly more interested in us now we don't have access to the second largest consumer market on Earth. To think we're being led by idiots such as Liam Fox into such a difficult set of negotiations is underwhelming to say the least.
Conflict of interest: British born English but European too and proud of it.
Another lesson about how car making works
A vehicle is designed to be marketed and sold over a period of years. The first years after launch are likely to be the most successful in volume terms if the design is popular, but new competition quickly affects volume and the makers has to reinvest. In that cycle there are various facelifts and features that can be added which will help sustain volume, but eventually a whole new model is needed.
When that happens the plan of where to make the new car has to be agreed because the factory will have to have new robotics, supply chains, paint shops, and layout changes to accommodate a different platform and or powertrain. The best plan of the location is not always to follow where the existing model is made as the building may be inadequate, the opportunity for expansion may be limited, and trading conditions may be changing. This was why the Transit was moved from Southampton to Turkey and why Mondeo was never built in the UK. It was just not good business to make a new plant in the UK but sensible to go elsewhere in Europe or to make use of Turkish incentives to invest there. It is why JLR had to close Browns Lane.
So to Nissan: if they are doing major facelifts to the Quashqai then staying in the UK may be sensible in the short term, but if they wan to retool a complete new car from the ground up they will need to think long and hard where best to make the investment. The Renault/Nissan group owns Dacia, who make cars in Romania, a country desperate for manufacturing jobs. If the decision is to set up a whole new plant, new robots, new press shop new paint shops, new trim and final assembly, well maybe Sunderland is not the hot option in the long term...and outside the single market and customs union? well that's just another problem to be overcome financially.
Would you buy a house in district where all the costs of living there are just about to be at best unknown and at worst likely to increase? Or would you buy in a new town where the the prices are great? Read Romania for new town and a car plant for a house. This is NOT BREMOANING or scaremongering it is how business works and thinks.
Oh hang on though we could do a deal with New Zealand (total population smaller than London and as far as away as you can get, with the Korean car industry on the door step.)
Honestly get used to facts and not shared nonsense.