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Fears for Sunderland plant as Nissan silent on reports 10,000 jobs at risk worldwide

Tom Belger
·Finance and policy reporter
SUNDERLAND, ENGLAND - FEBRUARY 04: A general view of signage at the Sunderland car assembly plant of Nissan on February 04, 2019 in Sunderland, England. Nissan has announced to workers that the next-generation X-Trail will be made in Japan and not at it's Sunderland manufacturing plant. (Photo by Christopher Furlong/Getty Images)
The Nissan plant in Sunderland. Photo: Chris Furlong/Getty Images

Fears are growing for the future of Nissan’s Sunderland plant after reports the carmaker could axe 10,000 jobs worldwide.

Nissan has remained silent on reports in Japanese media and Reuters that the carmaker could more than double the number of planned job cuts after previously announcing 4,800 roles would go.

Analysts expect Nissan to announce a heavy drop in profits when it unveils its results on Thursday morning, with US profits particularly poor after heavy discounting.

One source with knowledge of the Sunderland plant played down fears for its survival, telling Yahoo Finance UK they did not expect any further cutbacks beyond the several hundred job losses announced last year.

They also pointed out the next-generation QashQai and Juke models are due to be built at the site. But another source told Reuters job cuts could be announced alongside the company’s results.

READ MORE: Business chief warns Boris Johnson no-deal Brexit ‘opening trapdoor to quicksand’

Shares in Aston Martin (AML.L) were also down more than 20% as it downgraded its forecasts on Wednesday, in a bleak week for carmakers with Boris Johnson’s victory also seen to increase the risk of a no-deal Brexit.

And the chief executive of French car giant PSA, which has previously warned its Vauxhall plant in Ellesmere Port’s future depends on a deal with Brussels, urged the UK to “hurry up” resolving the Brexit crisis.

Any job losses in Sunderland would come as a huge blow to the city in northeast England, where it is a major local employer.

The Nissan plant employs around 6,700 people, supports an estimated 27,000 more in its supply chain largely across the north-east.

It has previously been described as the most productive car plant in Britain, with around one in three British cars made by Nissan and exports to more than 130 countries around the world.

The mouth of the river Wear is seen from the Wearmouth road bridge in Sunderland in north east England on March 16, 2019. - The former shipbuilding city in northeast England, where the Nissan carmaker plant is now the lifeblood, played a starring role in Britain's seismic decision to leave the European Union. The city's 61 percent vote in favour of leaving in the 2016 referendum signalled early on where the nation was heading on the night of June 23, 2016 and celebrations at the count were beamed worldwide. (Photo by ANDY BUCHANAN / AFP)        (Photo credit should read ANDY BUCHANAN/AFP/Getty Images)
Nissan is a major employer in Sunderland. Photo: ANDY BUCHANAN/AFP/Getty Images

But it has faced huge uncertainty over its very survival amid Brexit concerns and the carmaker’s decision not to build its new X-Trail SUV in the north-east.

Britain’s car industry is already bracing itself for hugely damaging disruption from a no-deal Brexit, with concerns new checks, delays and tariffs could devastate ‘just-in-time’ supply chains.

The prospect of a Boris Johnson government has heightened concerns in industry that Britain could be heading towards crashing out of the EU, a major export market for carmakers, without a deal in place to secure continued frictionless trade.

READ MORE: Brexit-backing CEO says no ‘democratic mandate’ for no-deal Brexit - and calls for a public vote

A Nissan spokesperson told AFP the company had “not yet decided” what would be announced on Thursday, and “don’t comment on speculation.”

Carlos Tavares, chief executive of Peugeot, Vauxhall and Citroen owner PSA, also reportedly told the British government to "please hurry up" with resolving the Brexit crisis on Wednesday morning.

Tavares used a call with analysts to say the French company "love the UK" but need "clarity," according to the FT, and warned: "A no-deal cannot be considered."

The company has previously said Vauxhall workers at Ellesmere Port in Cheshire, north-west England, will build the next Astra only if a Brexit deal is reached with Brussels.

Meanwhile Luxury carmaker Aston Martin announced on Wednesday it had cut several forecasts, saying economic slowdown in Britain and Europe was sales.

The company has seen its costs increase partly from its contingency planning for Brexit, as well as heavy investment.

It said it now expects wholesales this year to be between 6,300 and 6,500 cars, rather than its previous estimate of between 7,100 and 7,300, with underlying profit margins cut. It also said spending could be as much as £40m lower than planned, falling to around £300.

"We are disappointed that short-term wholesales have fallen short of our original expectations... We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term," said CEO Andy Palmer.