05 February, 2019

Nissan to lose UK Government investment as union calls for Brexit clarity

Nissan could lose £61 million (€69.2 million) of investment following the announcement that it will no longer build its X-Trail model in the UK.

The manufacturer was given assurances following the Brexit referendum result in 2016 that saw the UK decide to leave the EU, and part of this was a financial package. Business Secretary Greg Clark has confirmed that the business was awarded the sum, with it going towards training, environmental improvements and research and development.

This was reliant on the new model being built at the company’s Sunderland plant, alongside its Qashqai, Juke and Leaf models. The X-Trail was also to be built in Japan. However, Nissan recently announced it would concentrate production of the SUV solely in the Asian plant.

Speaking in the House of Commons following the announcement, Clark said that the decision will have ‘no implications for existing jobs at the plant’, but that the additional 741 jobs proposed alongside the decision to manufacture the new car model in Sunderland ‘will not take place.’

He also suggested that Nissan would now have to reapply for the grant: ‘If the company wishes to compete in these industry funding schemes, as I hope and expect it will, it will have to submit an application and undergo an independent assessment.’

Around £2.6 million (€2.9 million) of the grant has already been paid to the Japanese company, although there is no word yet as to whether this will need to be repaid.

Union pressure

Sunderland’s production fell 11% in 2018, reflecting a wider slump across the UK. Nissan builds around 30% of the total UK car output at the plant and exports the vast majority of these vehicles to EU countries. It is wary of the threat that a no-deal Brexit would bring, including customs delays and import/export tariffs.

The Japanese firm had kept fairly quiet while other manufacturers highlighted their concerns over the lack of a deal. However, it broke its silence in October last year. In a statement to UK newspaper The Guardian, authorised by the company’s main board in Japan, Nissan said: ‘Frictionless trade has enabled the growth that has seen our Sunderland plant become the biggest factory in the history of the UK car industry, exporting more than half of its production to the EU.

‘Today we are among those companies with major investments in the UK who are still waiting for clarity on what the future trading relationship between the UK and the EU will look like. As a sudden change from those rules to the rules of the World Trade Organisation will have serious implications for British industry, we urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.’

Speaking after a meeting with Nissan, Unite union acting national officer Steve Bush said: ‘Nissan was left in no doubt of our anger and disappointment over how the X-Trail announcement leaked to the media over the weekend. It has caused a great deal of anxiety among a workforce in one of the most efficient and productive Nissan factories in the world.

‘What this saga shows is that the sector-wide uncertainty caused by Brexit urgently needs to be addressed by ministers because it is draining the industry of skills, investment and new jobs. The Government also needs to get a grip and do more to support car workers and the industry in the transition away from diesel to alternatively powered vehicles.’