Published on February 19, 2019 | by Steve Hanley
February 19, 2019 by Steve Hanley
In a press release issued on February 19 by Honda UK, the company would close its Swindon plant by the end of 2021. This facility manufactures approximately 150,000 Honda Civic vehicles a year, which are distributed in the United Kingdom and Canada. Europe. The first reaction of many people has been that the chaos surrounding the Brexit is responsible for the decision, but the company's statement makes no mention of this tumultuous topic. Instead, it would seem that the closure of the automotive business for the benefit of electric vehicles is the main reason for the closure.
Honda of UK Manufacturing (HUM) today informed its associates (employees) of the proposal to close its vehicle manufacturing plant in Swindon, at the end of the production cycle of the current model, in 2021. The factory currently produces 150,000 cars annually around 3,500 partners.
This proposal comes as Honda accelerates its commitment to electrified cars, in response to unprecedented changes in the global auto industry. Due to the significant challenges posed by electrification, Honda will revise its global manufacturing operations and focus on its operations in areas where it anticipates high production volumes. As part of this proposed restructuring, the current role of HUM as a global manufacturing center may no longer be viable.
The consultations will begin today and HUM will work closely with its collaborators, including the recognized Unite the Union union, in the coming months.
Katsushi Inoue, Chief European Regional Operations Officer, Honda Motor Co., Ltd. and president of Honda Motor Europe, said; "Given the unprecedented changes affecting our industry, it is critical that we accelerate our electrification strategy and restructure our global operations accordingly. As a result, we had to make this difficult decision to consult with our staff on how we could prepare our manufacturing network for the future. This has not been taken lightly and we deeply regret how much the announcement made today will be troubling for our people. "
HUM Director Jason Smith said, "We understand the impact of this proposal on our associates, the broader supplier base and the local community. We are committed to helping employees help them through this difficult time.
For every factory job, there are a similar number of jobs outside the factory in industries that provide and support manufacturing. In another statement reported by Yahoo, An additional 3,500 people could be affected if we take into account other activities of Honda … that provide spare parts, logistics and support the Swindon factory. The jobs are in Honda's subsidiaries and "affiliates". statement said.
"All of this represents a huge amount of resources for automakers," says Peter Wells, a professor at the Car Industry Research Center (CAIR) at Cardiff Business School. New York Times. "They must access these new markets, restructure their operations; it's a huge financial burden. This puts pressure on the entire sector. Everything is going on around this industry and it is a hectic strategic moment for the participants, "he said.
Although the company insists that Brexit has nothing to do with the decision to close the Swindon plant, others are not so sure. "I've listened to several senior Honda executives [at a recent industry event] saying that membership in the [EU] The customs union was essential for them to operate in the UK … This should not surprise those who take seriously the warnings of the industry, "says Professor Oxford Matthias. Hollweg. Yahoo.
He added that Japan and the United Kingdom had recently concluded a new free trade agreement that made it cheaper for Japanese companies to make cars at home and ship them to foreign markets. Nissan has also recently decided to build its new X Trail model in Japan rather than at its Sunderland plant, where it is building LEAF for its British and European customers.
It's hard to see how Brexit could do not to be a problem. About 40% of the components used by Honda at the Swindon plant come from the European Union, says the New York Times. According to Patrick Keating, head of government affairs at Honda Motor Europe, 35% of his exports go to the European region. In 2017, he told a parliamentary committee that Honda had "about 2 million components per day on 350 trucks" coming from Europe.
It is difficult to give credence to the claim that the move to electric vehicles is behind the closure of the Swindon plant, especially for Honda, which has so far shown little appetite for 100% electric cars, apart from an Urban EV which is supposed to be a form of production in Geneva in a few weeks. The elephant in the room is China, where electric vehicles are virtually mandatory and where sales growth prospects are almost limitless.
The announcement made by Honda is perhaps all the more revealing as all the players in the automotive industry turn to China as European regulations on emissions emissions harden and builders continue to scratch and negotiate for sales in an almost saturated market. GM sold its European assets in 2017. Ford of Europe has only had losses to demonstrate for its efforts in recent years. In the United States, Ford and GM are shutting down car factories and firing workers in an attempt to fend off the oceans of red ink.
Perhaps the news about the closure of the Swindon plant does not concern Brexit or electric cars at all. Maybe it's the world of car manufacturing that breaks down along new lines of flaws. Tesla may be the engine of change, but new industry trends are legion. What is likely is that in 10 years we will see a real realignment of the industry, which we can only guess at today.