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LONDON – Honda will close a car factory in the west of England with the potential loss of 3,500 jobs, British media and a local lawmaker announced Monday, making a new shock for a British economy made nervous by Brexit.
Sky News announced that the Japanese automaker would announce Tuesday the closure of the Swindon plant in 2022. Honda is manufacturing its popular Civic model at the factory, located 115 km west of London.
Local lawmaker Justin Tomlinson has confirmed the news in a series of tweets. He said he spoke to Honda and that the decision "is based on world trends and not on Brexit, because the entire production of the European market will consolidate in Japan in 2021".
He added that no loss of employment at the factory was expected before 2021.
Honda said that he could not comment "at this point".
"We take our responsibilities to our associates very seriously and will share any important news with them first," the firm said in a statement.
The union Unite, which represents the factory workers, said it was reviewing the information. Quinn, the union's national car industry leader, said the closure of the plant "would be a blow to the heart of the British manufacturing industry".
The news comes as British companies issue increasingly urgent warnings about the damage caused by the uncertainty surrounding Britain's imminent exit from the European Union. The United Kingdom is due to leave the bloc on March 29 but has yet to sign an agreement setting out the terms of the divorce and setting the trade rules applicable after the Brexit.
Many companies fear economic chaos if there is no agreement on the rules and conditions that will replace the 45 years of no-nonsense trade that preceded EU membership. Uncertainty has already led many companies to transfer certain operations abroad, store goods or postpone their investment decisions.
Earlier this month, Nissan announced it would not build new SUVs at its Sunderland, England plant as previously planned.
Nissan said it made the decision "for commercial reasons," but added that "the lingering uncertainty surrounding future relations between the UK and the EU is not helping companies like ours to plan their future. "
Last week, Ford said that if Britain left the EU without an agreement on harmonious relations, it would be "catastrophic for the British auto industry and Ford's manufacturing activities in the country" .
Christian Stadler, professor of strategic management at the Warwick Business School, said automakers were hit by several factors, including the slowdown in the global economy and the European crackdown on diesel engines.
Add to this that the supply chain of most British-made cars crosses the Channel several times as parts are shipped, so any delay at the border after Brexit could seriously disrupt the just-in-time production method of the industry. The UK is starting to look like a less attractive place for international companies that build cars, "he said.
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