What’s The News?Japanese automobile major Honda will shut down its only factory in Europe. Their Swindon factory in Wiltshire, UK is 30 years old, and more than 1.5 million Honda Civic hatchbacks have been manufactured here, till now. Click To Tweet
The factory’s capacity is 150,000 cars per year, and if we consider the supply chain, then 10,000+ employees are directly or indirectly employed due to this factory.
In fact, the entire town of Swindon will be unemployed, in a way, once the shutdown is complete by 2021.
What Does This Mean?
Worst hit by this sudden shut down will be Goans, from India. Out of 10,000 total workforces in the Swindon factory (direct, indirect, supply chain), 65% or 6500 are Goans who had immigrated to this English city in the last 30 years.
In their announcement of the job cut, Honda said that only 3500 jobs will be terminated immediately. In this, 900 would be PIOs or Persons of Indian origin. But gradually, more than 6000 Indians, mainly Goans will be out of a job.
A Goan working in the Honda factory said, “People are in shock. I have a child and my parents live with me, plus my wife. This will have a huge impact on our household income.”
Honda Motor Europe President Katsushi Inoue, in a statement, said that they want to manufacture electric cars, and this is the main reason for shutting down this factory.
But is that the main reason?
Why Does This Matter?
The Bigger Picture: It seems that Brexit is the main reason for Honda shutting down down its only European factory. Honda doesn’t have the capability to manufacture electric cars in the Swindon factory, and to overcome this, Honda and EU had signed a pact to transfer the technology and to arrange the workforce needed for the same.
But in March 2019, the UK will leave the European Union, under Brexit.
And this changes everything.
Not only Honda, but other automobile majors to have announced major job cuts and closures due to Brexit.
Tata-owned Jaguar Land Rover has announced that 4500 employees from the UK factories and offices will be terminated, and Brexit has been the main reason. Jaguar Land Rover is UK’s largest automobile manufacturer, and 40,000 employees work there across various sites
Nissan has decided not to manufacture their X-Trail sport-utility vehicle in the UK, and again, Brexit has been the culprit.
Liberal-Democrat Party leader Vince Cable has said, “I think Brexit is clearly a major factor. It may be one of several but it is certainly a major factor and it’s not just for Nissan, the same calculations are being made throughout the current industry.”
BMW, another major automobile manufacturer in the UK will shut down its factory for a week, in the UK, after Brexit happens in the month of March 2019. It is still uncertain whether BMW will resume its production with full force or not.
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