Without the Sunderland Deal, Nissan Warned May UK Operations Would Close

If Nissan was not guaranteed competitive trading conditions with Europe, it warned the British government that the carmaker would wind down UK operations, the British media reported quoting two people involved in negotiations over future investment in its Sunderland plant.

In a move that would lead to the closure of its British plant and other UK sites, the Japanese carmaker said it was prepared to shift production to its Spanish and French factories during Bottom of Form

talks that led to a meeting between Theresa May and Nissan chief Carlos Ghosn.

Safeguarding more than 30,000 jobs at the site and in its supply chain, its decision this week to locate two new cars at the plant from 2019, was influenced by government assurances offered to Nissan.

Sunderland’s closure would have set a precedent for other carmakers to locate future work outside Britain and caused a political tidal wave.

To shield them from the impact of Brexit, the same assurances offered to Nissan are now being demanded by rival carmakers. While some exporters including chemicals manufacturers have set tariff-free access to the EU as a priority, technology and pharmaceuticals companies are prioritising visas for skilled workers.

“Now is the time to influence — to prepare our arguments and to get our arguments in,” said Terry Scuoler, chief executive of EEF, the manufacturers’ body.

Including the contents of a letter written by Greg Clark, the business secretary, to Nissan’s executive committee in Japan, the prime minister’s office faces calls from Labour to disclose details of its exact pledges to Nissan.

Assurances such as the carmaker would face no change in its trading conditions following Britain’s exit from the EU are elements that are contained in the letter and are the same that were offered to Mr Ghosn by the prime minister, said the media quoting several people familiar with the contents of the letter.

Nissan had made it clear that any future Qashqai investment was critical to Nissan’s survival in Britian saying: “Our whole UK operation is linked to Sunderland”, said one of the people involved in the talks. With 7,000 at the factory, 500 at a research centre in Milton Keynes and around 50 at a design studio in West London, in total the company employs close to 8,000 people in the UK.

These other sites have a “natural relationship” to the Sunderland plant, the person added, and it was “critical to get the Qashqai” to safeguard these in the long term.

More than half of the nearly 500,000 vehicles produced at the site, of which almost 80 per cent are exported to the EU, are accounted for by the Qashqai, a small family SUV.

The plant would struggle to be profitable and would be forced to lay off workers without the car.

In several years’ time when it came up for renewal, the Nissan Leaf, also made at the site, would be likely to be moved to a plant in France. The French plant currently produces the same-sized Nissan Micra.

According to one person familiar with the contingency plans, the R&D and design functions would all be wound down and moved to be closer to the production of the vehicles, with the plant closed, the ancillary operations such as a battery assembly site in Sunderland.

Number 10 and Nissan both denied that the potential closure of Sunderland was discussed at the meeting between Mr Ghosn and the prime minister.

(Adapted from CNBC)

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