Reports indicate Japanese carmaker plans to cut back production line shifts at Sunderland plant, threatening 400 local jobs
Nissan is planning to cut back production line shifts at its Sunderland plant putting 400 jobs at risk, according to reports.
The proposals involve reducing the number of shifts on a production line that makes Qashqai and Leaf models from three to two, sources told Sky News.
Nissan, however, has not confirmed the news, simply telling the broadcaster such reports were “rumour or speculation”.
Nissan cancels plans to build the X-Trail in the UK
Nissan has announced it will not move production of its X-Trail SUV from Japan to Sunderland, reversing a decision made in 2016.
Five months after the 2016 referendum, Nissan received assurances from the British Government that no additional tariffs or diplomatic red tape would be placed upon it as a result of the leave vote. Partly as a result of those assurances, the car maker committed to build the latest-generation Qashqai in Sunderland, and shift X-Trail production to the plant as well. Those decisions were seen as a pre-emptive vote of confidence in post-Brexit UK.
However, Nissan has gone back on the X-Trail decision, keeping its production in Asia – though the Qashqai, the smaller Juke SUV, and the electric Leaf will continue to be built at the Sunderland plant. No jobs are expected to be lost as a result of the X-Trail decision – though none are likely to be created, either.
Nissan Europe chairman Gianluca de Ficchy said: “While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”
Critics were quick to hold Nissan’s reported decision up as an example of the Brexit malaise said to be gripping car companies ahead of the UK’s departure from the EU on 29 March, but the true reasons behind it are likely to be more numerous than Brexit alone.
Nissan produced 10.7 per cent fewer cars in the UK last year than they did in 2017, for example. The X-Trail is also a relatively large SUV and is well-paired with a diesel engine, however sales of diesel-engined cars declined by almost 30 per cent in 2018.
And, while the X-Trail’s diesel engines come from business partner Renault in relatively nearby France, the model’s petrol engines would have to be shipped over from Japan. Finally, while the Qashqai has been a huge success for Nissan, the larger X-Trail is a far less common sight on UK roads.
Whatever the associated explanations behind the X-Trail’s production staying in Japan, Nissan’s decision comes against a backdrop of declining investment in the UK automotive industry, which fell by 46.5 per cent in 2018 compared to the previous year.
Revealed: Government’s £80m letter to Nissan
Despite refusing to publish it at the time, the Government has now made public the letter written to Nissan in October 2016 offering post-Brexit reassurances.
Addressed to then-Nissan chief executive Carlos Ghosn, the letter, written by Greg Clark, the Secretary of State for Business, pledges financial incentives that “could amount to additional support of up to £80m”, with the money dependent upon Nissan moving “production of the Qashqai and X-Trail models to the Sunderland plant.” Clark also promised to “ensure that Nissan’s interests are fully reflected as other local infrastructure is developed.”
Clark reassured Ghosn that “it will be a critical priority of our negotiation to support UK car manufacturers and ensure that their ability to export to and from the EU is not adversely affected by the UK’s future relationship with the EU.”
An independent advisory board subsequently reduced the £80m figure to £61m. While some reports indicate Nissan will receive at least some of that £61m grant, a letter written by Greg Clark after the company decided to cancel the X-Trail move says the money “will only be awarded in line with the terms of the offer”. Either way, Nissan is likely to be betting post-Brexit trading conditions will mean greater savings can be made by keeping the big SUV’s production out of the UK.
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