Nissan: another Project Fear myth debunked

The carmaker has developed a plan to ‘double down’ on the UK in the event of a ‘Hard Brexit’.

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Topics Brexit Politics UK

‘Leave means they leave’, said the Remainers, predicting catastrophic job losses in Britain’s manufacturing sector as a result of Brexit. Major manufacturers like Airbus, Honda and Nissan, they said, would be unable to cope with tariffs being slapped on imported parts and on exported vehicles, and so factories would simply shut down.

But since it has become clear that the government is actually intent on pressing ahead with Brexit, and that the game is up for pro-Remain capitalists pushing for Brexit to be softened or overturned, many of the dire warnings have been tempered, if not reversed entirely.

Airbus, once one of the shrillest proponents of Project Fear, last month made clear it was committed to maintaining its UK operations. And this is before the trade talks with the EU have even begun.

Nissan was in the past equally shrill in its warnings of post-Brexit job losses. Indeed its European chairman said that post-Brexit tariffs would mean the ‘entire business model for Nissan Europe will be in jeopardy’.

But the Financial Times has uncovered contingency plans drawn up by Nissan, which show that, in the event that tariff-free access to the EU market ends after Brexit, Nissan may ‘double down’ its focus on the UK.

Under this plan, rather than shutting down its Sunderland plant, which employs 6,000 workers, Nissan would instead close down its operations in France and Spain. It would prioritise cornering the UK market rather than exporting to the EU.

Nissan denies that any such plan exists, and its public position is that a Brexit that results in tariffs would be unsustainable. But as the FT points out, Nissan has invested over £4 billion already in its UK plant. Meanwhile, its sales to the rest of the EU have declined significantly (falling 17 per cent just last year), and the Sunderland plant’s reliance on parts from the EU is set to decrease in future as its diesel production ends in 2022.

Many businesses have grown comfortable with the current EU set-up – not only the tariff-free trade within the EU, but also the protectionism the Customs Union offers from outside competition. And so they will continue to make anti-Brexit noises.

But when Brexit becomes a reality, most businesses will adapt to the new conditions of trade, rather than throw their toys out of the pram.

Picture by: Getty.

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Comments

James Knight

3rd February 2020 at 5:50 pm

A key reason for having Japanese auto manufacturers in Europe was the tariffs of the EU. Now there is a free trade deal between Japan and the EU, they can pull back manufacturing to Japan as and when it suits. .

Sue Eaton

3rd February 2020 at 3:58 pm

Remainers said Nissan “would be unable to cope with tariffs being slapped on imported parts and on exported vehicles, and so factories would simply shut down.”
And this is what Nissan said today:
“We’ve modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs .“

James Knight

3rd February 2020 at 6:01 pm

If in June 2016 the government really did what people voted for – “take back control” – we could easily have a free trade deal by now. Taking back countrol would have meant telling the EU we are leaving in 2 years, what we want is a free trade deal and start negotiating from day 1 for that. With the clear intention of leaving without a deal if none could be reached. As WTO rules allow 10 years to finalise a deal in principle, doing that in 2 years is hardly a big ask (and now we have much less than 2 years because the concept of doing things is parallel is beyond the EU).

But instead we waited over years “negotiating” everything the EU wanted only to find out last week that the offer of a “Canada style” free trade deal is premised on the UK being an EU rule taker. Not only have negotiations on trade deal been stalled for purely ideological reasons of the EU, even now they are dragging their feet again by saying they cannot start negotiations until the end of March, despite the suppposed challenging time table.

So if Nissan’s business is not sustainable in the UK and Europe, that is down to the EU and spineless Remainers in the UK political leadership.

Jim Lawrie

3rd February 2020 at 3:50 pm

Why would anyone want to close down “… one of the most efficient car plants in the world, Nissan Sunderland builds half a million Qashqais, Jukes, Notes, Leafs and now Infiniti Q30s a year, at such a speed that raw material is turned into a car in less than a day.”
It employs 7,000, not 6,000 people, with another 25,000 upstream.

Neil John

3rd February 2020 at 2:20 pm

Makes some sense, considering how the Nissan/Renault cooperation has gone. I’d love to be able to buy a new R52 Pathfinder, but the EU wouldn’t allow them to be sold in EU land. Australian’s pay ~ the same for a 7 seat 3.5L V6 petrol Pathfinder as we pay for a gutless 5 seat X-Trail derv burner, we got better fuel mileage than the even more gutless 1.3 petrol X-trail can achieve out of one we hired in Canada.

ZENOBIA PALMYRA

3rd February 2020 at 2:18 pm

I’ll believe it when I see it.

Michael Lynch

3rd February 2020 at 12:48 pm

It’s the age old story – money talks and bullshit walks.

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