Nissan cites Brexit 'uncertainty' as it scraps plans to build model in Britain
Posted February 3, 2019 8:05 a.m. EST
CNN — Japanese car manufacturer Nissan has confirmed it is scrapping plans to build a new model in the English city of Sunderland, citing uncertainty over Brexit and further highlighting employers' fears of a no-deal departure by the UK from the European Union.
The company had said in 2016 that it would produce the new X-Trail model at its Sunderland factory after getting reassurances from the government over Brexit -- an intervention hailed by Prime Minister Theresa May as a "vote of confidence" in British business after voters backed leaving the EU.
Now it's reversed those plans and will instead continue to build the X-Trail in Japan, it confirmed on Sunday, dealing a major blow to the region's economy and underlining repeated concerns from the British automotive industry that a no-deal Brexit would damage the sector.
"The continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future," Nissan's Europe chairman Gianluca de Ficchy said in a statement, after explaining that keeping production in Japan would reduce "upfront investment costs."
The decision was quickly seized upon by anti-Brexit MPs and campaigners, and places further pressure on May as she seeks to salvage her withdrawal agreement with the EU and pass it through parliament.
"This represents a serious blow to the communities that depend on the jobs Nissan creates and supports," Keir Starmer, the opposition Labour Party's Brexit spokesman, wrote on Twitter.
"The Tories' chaotic handling of the Brexit negotiations is having a devastating impact on business investment. It's time ministers got a grip on this crisis," he added.
Nissan's Sunderland facility is the largest car factory in the UK, employing more than 7,000 people. Plans for two future Nissan car models, the Juke and Qashqai, to be produced at the plant are "unaffected," the company's statement said.
"We appreciate this will be disappointing for our UK team and partners. Our workforce in Sunderland has our full confidence, and will continue to benefit from the investment planned for Juke and Qashqai," de Ficchy said.
During the 2016 referendum, Nissan said it opposed Brexit and that remaining in the EU would make "the most sense for jobs, trade and costs." Sunderland ultimately voted to leave by 61% -- making it one of the most pro-Brexit cities in the UK.