Honda closure adds to UK's Brexit gloom

Japanese car giant Honda has announced it will close its only car plant in Britain in 2021. Several carmakers have announced plans to trim UK operations, with concerns that a no-deal Brexit could disrupt supply lines.

Honda will shutter its operations in southwestern England in 2021, the Japanese carmaker announced Tuesday. The move adds to a growing number of car manufacturers scaling down operations in the UK.

The plant, near the town of Swindon, accounts for more than 10 percent of Britain's total car output, although it has struggled increasingly in recent years.

The announcement means the loss of 3,500 jobs in the UK.

Local lawmaker Justin Tomlinson, of the ruling Conservative Party, commented publicly on the apparent closure soon after the news broke, saying that he had spoken to the company. The Brexit-supporting member of parliament insisted that the closure was not Brexit related.

"It is a reflection of the global market," said Tomlinson. "They are seeking to consolidate production in Japan."

Speaking to reporters in Tokyo, Honda president Takahiro Hachigo said: "I'd like you to understand this is not related to Brexit."

Read more: Hard Brexit risks 100,000 German jobs: report

This septic isle

It never rains

A delay by UK Prime Minister Theresa May to allow Parliament to vote on her Brexit deal has increased the chances Britain will leave the bloc without a deal in March. The odds on a no-deal Brexit have shortened to 2/1, according to, while Steve Eisman, the trader whose prediction of the 2008 crisis was dramatized in the film The Big Short, is betting against UK banks.

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Money where your mouth is

The IMF says that while some sectors like agriculture and mining might benefit, the majority of sectors would shrink by between about 1 percent and 33 percent. The Bank of England said no-deal would wipe between 4.75 percent and 7.75 percent off what the UK would have produced by 2024 and the pound would fall by 25 percent.

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Not waving, but drowning

The EU has said the UK would have "third country" status under a no-deal scenario, giving it the same status as China, Russia and Pakistan. All goods crossing EU borders would be subject to tariffs of up to 38 percent. The Confederation of British Industry (CBI) said additional paperwork attached to trading under WTO rules would act as an extra tariff of up to an average of 6.5 percent.

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Love's labor lost

Britain’s farmers and manufacturers face the largest shortage of skilled workers since 1989 due to a fall in the numbers of EU27 nationals coming to work since the Brexit vote. A no deal would likely accelerate that process.

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A road to nowhere

The financial industry and British regulators say a hard Brexit poses a threat to trillions of euros worth of derivative and insurance contracts London could lose up to to €800 billion to Frankfurt, lobby group Frankfurt Main Finance has said. Some 30 banks and financial firms have already chosen the city as the site of their new EU headquarters, with others opting for Dublin or Paris.

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Movers and shakers left in limbo

No-deal would have significant implications for people's ability to go where they want. A €7 charge for visiting the EU's Schengen Area would kick in in 2021, after the UK's transition period ends. British expats would face uncertainty, as many foreign governments have not yet established their rules for residency under no-deal.

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Can't beat a good queue

The UK Road Haulage Association has said a lack of planning over no-deal would mean the manufacturing sector would be put under "severe pressure" and hauliers would go out of business. European airports have warned that no-deal would cause "major disruption and heightened safety risks" to the air network. Ryanair's chief executive Michael O'Leary has warned planes could be grounded.

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All in it together

The biggest impact of no deal could be felt in Ireland, which exports 12 percent of its goods and 40 percent of its food to the UK, and two-thirds of its other exports travel through the UK. The IMF believes the Netherlands, Denmark, the Czech Republic and Belgium also face taking moderate hits to their economies of between 0.5 percent and 0.7 percent.

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Where there is harmony, May brings discord

The Police Federation has said it was worried about "widescale disruption and dangers for the general public." Defence Secretary Gavin Williamson has said 3,500 troops are on standby to cope with the fallout of no deal. The government is preparing for potential shortages of key items in the wake of a no-deal Brexit. But May refused to guarantee the health service (NHS) would have enough medicines.

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Christmas-voting turkeys play chicken in Ireland

The border between Northern Ireland and the Republic of Ireland would remain unresolved with no deal. The main sticking point has been the Irish 'backstop' — the insurance scheme for avoiding a hard border in Northern Ireland. One solution has been a Canada-style agreement that would remove most EU restrictions but would not abolish the need for a hard border. But uncertainty breeds fear.

Leaving Britain

Honda's rival Japanese carmaker Nissan announced earlier this month that it was canceling plans to build the X-Trail SUV in the northeastern town of Sunderland. Nissan said explicitly that uncertainty around Brexit was a factor in its decision.

The absence of a withdrawal agreement — a so-called no deal Brexit — would likely mean the imposition of customs checks and tariffs as products enter and leave the UK.

The supply chain for most British cars crosses the channel several times as parts are shipped back and forth as part of a "just in time" supply arrangement.

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Last week, the carmaker Ford said such a scenario would be "catastrophic for the UK auto industry and Ford's manufacturing operations in the country."

Read more: German businesses watch Brexit with bated breath

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DW News | 16.01.2019

Brexit chaos drives Brits crazy

Meanwhile on Monday, Mercedes Formula One chief Toto Wolff said a no-deal Brexit could be a "nightmare scenario" for motorsports teams based in Britain.

"The way we get parts and services is just in time at the last minute ... taxes would massively damage the Formula 1 industry in the UK," Wolff said.

Visa and right-to-work worries were also high on Wolff's list of concerns, given the "26 nationalities in our team" who travel to several European races in the course of a season. Mercedes, a team ultimately funded in Stuttgart, but run out of factories in Brackley and Brixworth, is arguably the most obvious example of British F1 teams' ties to continental Europe.

Little time remaining

Ireland's Deputy Prime Minister Simon Coveney on Monday expressed frustration at the failure of Britain to ratify a deal it struck with Brussels in November.

"We have less than 40 days to go until the United Kingdom formally leaves the European Union, and we still don't know what the British government is actually asking for to actually get this deal ratified," said Coveney, who is also Ireland foreign minister, after holding more talks with EU colleagues in Brussels.

Read more: Brexit: Why is the Irish backstop so controversial?

The EU's chief Brexit negotiator Michel Barnieron Monday evening met the UK's Brexit minister Stephen Barclay and Britain's attorney general Geoffrey Cox as the search went on for a way to avoid a no-deal Brexit.

Prime Minister May has so far been unable to pass the Brexit agreement reached in December through the British parliament. Among the major sticking points is a failure to agree arrangements on the border between Britain and Northern Ireland should the regulatory arrangements between the two countries diverge.

rc/se (AFP, Reuters, dpa, AP)

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