NISSAN’s boss has told the BBC that the future of its factory in Sunderland, the biggest car manufacturing plant in the UK, is still in jeopardy if the UK leaves the European Union without a favourable trade deal.
The comment from Ashwani Gupta, director, representative executive officer and COO/CPO, follows an announcement from the company last week that there will be no job cuts at Sunderland, despite ambitions to cut annual spending by £2.3bn.
It said its Spanish and Indonesian plants would close their doors instead, as part of the cost-saving plans. In Barcelona, where manufacturing for the company has operated for four decades, workers burned tyres in protest.
But when Driving.co.uk asked if a new deal had been struck with the UK government to mitigate the potential costs to Nissan of a no-deal Brexit, a spokesperson said its position had not changed, adding:
“As previously communicated, unfavourable changes to trading conditions between the UK and EU would impact not only Nissan’s UK operations but our European business model. This is why we continue to urge UK and EU negotiators to reach an agreement which maintains mutually beneficial trade.”
Today, Gupta confirmed that the EU is the Sunderland outpost’s main customer, and therefore leaving it without a trade deal would make future operations in the UK “unsustainable”.
He told the BBC: “You know we are the number one car maker in the UK and we want to continue. We are committed. Having said that, if we are not getting the current tariffs, it’s not our intention but the business will not be sustainable. That’s what everybody has to understand.”
Post-Brexit talks between the UK and the EU resumed this week, after the coronavirus pandemic abruptly reallocated the government’s resources and attention. The UK has already formally left the EU but is currently in a “transition period”, during which trade agreements with the union are being agreed. The transition period ends this December, after which World Trade Organisation (WTO) rules will apply to goods crossing between the UK and Europe.
For vehicles that means a 10% tariff on all cars produced at Sunderland, bound for the EU. Around 70% of the cars manufactured at the plant currently are sold in Europe.
The BBC reported that Nissan chiefs have repeatedly pleaded with the UK government to ensure that WTO rules are not adopted by the UK.
The chairman of Nissan Europe has previously said: “If we are in a situation in which tomorrow we have to apply 10% export duties to 70% of our sales, the entire business model for Nissan Europe will be in jeopardy.”
Many thought that the government would extend the transition period due to the coronavirus, and the EU’s chief negotiator Michel Barnier said that it would be open to a two-year Brexit delay, but the UK government has ruled that out. The UK only has until the end of this month to request an extension, under an agreement made last year.
It has been suggested that Renault, which is in a strategic alliance with Nissan, could take up some of the manufacturing operations in Sunderland, but now Gupta says that would be a decision for the French company to make itself.
Last week Renault said that it has no immediate plans to begin manufacturing in Sunderland. The company, in which the French Government has a 15% stake, had to cut 15,000 jobs from its own workforce last week, having also been severely affected by the coronavirus pandemic.
The Sunderland plant, which currently employs 7,000 people, manufactures the Qashqai and Juke SUVs, as well as the Leaf electric hatchback. The Qashqai was the UK’s sixth bestselling car last year.