Nissan Reverses UK Investment Decision
In the aftermath of the UK’s decision to leave the EU, good economic news was in short supply. For this reason, the announcement that following reassurances from the government Nissan would be investing in its plant in Sunderland, in north east England, and building the new X-Trail there was a rare ray of sunshine. At the time, the government would not reveal what it had said in a letter to Nissan, but denied that financial incentives had been offered.
The planned new production would have created 741 new jobs directly with more in allied areas, one assumes. However, at the weekend, Nissan reversed this decision and instead will build the new model in Japan. It has emerged that the UK government had agreed to up to £80 million in support to Nissan should the project go ahead. A letter from the business secretary to Nissan written at the time has now been published. In a bid to perform damage limitation, the government has insisted that Nissan’s decision will not result in any job losses at the plant (but this is unsurprising as it is a planned expansion that has been cancelled).
Nissan announced its decision on Sunday. One of the underlying reasons for the decision was uncertainty over Brexit which was adversely affecting business, noting: “The continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.” Nissan’s executive vice president for manufacturing and supply change management, Hideyuki Sakamoto, pointed out that: “A model like X-Trail is manufactured in multiple locations globally and can therefore be re-evaluated based on changes to the business environment. As always, Nissan has to make optimal use of its global investments for the benefits of its customers.”
Nissan’s Sunderland plant directly employs 6700 at the site and produces 2000 cars per day, making it one of the largest employers in the region. The city backed leave by 61% in the referendum, but some workers blamed Nissan for keeping silent about the potential consequences of the vote. A local MP, Phil Wilson (Labour) said: “we were in the single market, the customs union and the EU” (when Nissan invested in Sunderland) “If companies like this are starting to think twice in investing in Sunderland and in the UK, it could have a significant downside for the economy on this area,” liking it to “the equivalent of when the collieries closed in the 1980s” an event regarded as having a devastating effect on the regional economy.