Honda confirms UK exit – government offers task force

Manufacturing giant Honda has confirmed that it is to close its Swindon plant in 2021, with the loss of around 3,500 jobs.

The news broke yesterday (Monday) before the Japanese car manufacturer had informed workers.

Around 150,000 Honda Civics roll off of Swindon’s production line every year – most of them for export to the EU. 2021 marks the end of the current model’s production lifecycle.

Globally the company makes two million cars a year – mainly in China and the US. It is thought the new Civic will be exported into the EU from Japan. A recently-signed trade deal means the manufacturer will not face import tariffs.

This morning (Tuesday) the company confirmed the closure, which will be part of a restructure to concentrate on the production of electric vehicles close to markets with high capacity for growth.

Katsushi Inoue, president of Honda Motor Europe, said: “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.”

And Ian Howells, senior vice president for Honda in Europe, told the BBC: “We are having to move very very swiftly to electrification of our motor vehicles and this is a demand both of customers and of legislation.

“It’s really starting to give us challenges and we are having to start to address that and look very closely at where we are putting investment and targeting the investment areas where the volumes in the marketplace for Honda make that investment worthwhile – unfortunately, the conclusion is that this does not include Swindon.”

The government said it would be setting up a task force to ensure the skills and expertise of the workforce are maintained.

Business secretary Greg Clark said: “This is a devastating decision for Swindon and the UK (and) 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 task force 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.”

The news was met with dismay, pragmatism, and hopes for the future from business leaders.

Jointly commenting on Honda’s announcement, Paul Britton, chief executive of Thames Valley Chamber of Commerce Group, and Phil Smith, chief executive of Business West said: “The automotive industry is a bellwether for UK manufacturing, and has a disproportionate impact on many of our business communities and on our export strength.

“The planned closure of the Swindon plant will have a major impact across the area, affecting not only many employees on site but also firms and staff across the supply chain.

“Given the size of the operation, there will be a wide and diverse network of regional suppliers that will now be hugely concerned about their future business prospects.

“Employers, government and local authorities must do all they can to deliver tangible assistance and guidance for the people and communities that will be affected by an announcement of this scale.

“This development highlights the importance of maintaining and attracting investment in local economies.

“While the automotive industry in general is going through a period of transition, and a number of global factors will have played a major part in a decision of this size, the ongoing Brexit uncertainty and looming threat of no deal is one factor that should have been resolved a long time ago.

“The Accredited Chambers of Commerce network including Thames Valley Chamber of Commerce (Swindon, Berkshire, Buckinghamshire and Oxfordshire) and Business West (representing communities across Wiltshire, Gloucestershire and the West of England) stand ready to help local businesses and staff through the challenges that lie ahead, and continue to do all they can to bolster their local economies.”

Paddy Bradley, director of the Swindon and Wiltshire Local Enterprise Partnership, said: “The announcement by Honda will be felt deeply within the community of Swindon and surrounding areas.

“Honda’s long association with the area means that many families know someone who works or has worked at Honda.

“There will be knock-on effects into local businesses who are operating solely or in part because of Honda’s contracts or the presence of its workforce.

“The Swindon & Wiltshire Local Enterprise Partnership (SWLEP) is working closely alongside Government, Swindon Borough Council and local partners to help deliver a plan of support for employees and businesses in the area.”

Ian Larrard, director of Swindon & Wiltshire Initiative at Business West, said: “It is with great sadness to learn that Honda is set to close its Swindon operation as it ceases production of the Civic model in 2021.

“While at first reading, Brexit uncertainty probably hasn’t helped, it is only one of a number of negative external factors that have created a perfect storm, making this decision inevitable even if the timing has come as a shock.

“Trump’s tariffs on cars, the level of investment required right now to begin producing electric vehicles by 2022 and an EU/Japan trade deal that will make car production in Japan for the European market a more viable proposition.

“The priority now is to ensure all those who may be made redundant are helped to find work. Business West has provided support packages in the past and we’re ready to do so again when needed.

“On a positive note, the local economy remains robust and there is a strong jobs market, with the private sector looking to help employ not just engineers but the many skilled associates at Honda who may lose their jobs.”

That note of positivity was echoed by Richard Mathews, CEO of Swindon-based accountancy and law firm Optimum Professional Services.

“There will, of course, be uncertainty and concern among the Honda employees, and the associated businesses in the area that are suppliers,” said Richard.

“But hopefully this cloud has a silver lining. Longer term this could be an opportunity for Swindon. Currently, with little unemployment in the area, recruiting skilled professionals is proving difficult for other businesses. Without Honda, employers will have access to a larger pool of potential jobseekers.

“The Honda site itself should prove very attractive for other larger manufacturers, who will move into the town and offer employment.”

Meanwhile, recruitment agencies said help was at hand for employees, some who have worked at Honda for more than 20 years, in finding a new position.

Dan Barfoot, operations manager at CMD Recruitment Ltd, said: “We try to give as much guidance as possible to candidates in these situations. Entering the world of job hunting after continued employment of many years can be a daunting process.

“We offer a lot of resourcing tools especially on our website, from how to put CVs together to coaching around interview techniques to try and ready them as much as possible.”

He added that redundancies at Honda and at Cooper Tyres in Melksham would benefit other manufacturing businesses in Wiltshire.

“The struggle will be that both Honda and Coopers are well paid employers, which means the people leaving the companies will need to be open to accepting a drop in pay,” said Dan.

“But with Brexit around the corner it would be great to see the manufacturing gain momentum, and the UK turn into one of the leading manufacturers in world.”