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Nissan comes out of lockdown … and braces for Brexit

Jasper Jolly
Photograph: Phil Noble/Reuters

It must have been a strange last four years for the workers at Nissan’s Sunderland factory, as they went about their business of making cars while at the same time being caught in a symbolic tug of war between a divided Brexit nation.

When things are going well for the plant, it apparently shows that Global Britain is surging ahead of rivals; when the wind turns, it is a symbol of the UK’s industrial decline, with government having to go chequebook in hand to bureaucrats in Japan to keep it afloat.

Workers will return to the plant on Monday, with a phased restart as it gradually raises its output from the zero cars produced in April and May towards the 28,000 monthly total achieved on average in 2019.

Britain’s largest single car factory has the potential to build 600,000 cars a year, but it last broke the 500,000 mark in 2016. Even if carmaking restarts quickly, production for 2020 will surely be the lowest in years. What happens beyond that is an open question, as a result of comments last week from Nissan’s chief operating officer, Ashwani Gupta.

“You know we are the number one carmaker in the UK and we want to continue,” he told the BBC. “We are committed.”

Two sentences; two inaccuracies. First, Nissan made 346,871 cars in the UK in 2019, against Jaguar Land Rover’s 385,197 (although the latter were produced at various locations). The second caveat was rather more important: the carmaker is committed, but only up to a point.

“Having said that, if we are not getting the current tariffs, it’s not our intention, but the business will not be sustainable,” Gupta said. “That’s what everybody has to understand.”

Standard World Trade Organization tariffs would add 10% to the cost of exports to countries with which the UK does not have a trade deal. For companies used to shaving off fractions of a percentage point in efficiencies, the prospect of carrying on as before in such circumstances is as absurd now as it was before the referendum.

The exasperation of car executives at still having to deal with Brexit on top of everything else is almost palpable – particularly at Nissan, which has already said it will be shedding 2,800 workers in Barcelona as part of a deep restructuring in favour of the UK plant.

Sunderland is one of 35 Nissan plants worldwide, according to industry data company Marklines, even when those operated by its alliance partners, Renault and Mitsubishi, are not included. It has survived one crisis so far; a second might be tempting fate.

As Adrian Hallmark, chief executive of luxury carmaker Bentley, put it last week after announcing 1,000 job cuts, a no-deal Brexit would add another human-made disaster on top of the virus. Thousands of redundancies at Aston Martin, McLaren, Renault and parts manufacturer ZF are testament to the difficulties facing the entire global car industry. “My message to politicians is this: please don’t push us off a second cliff,” Hallmark told the Financial Times.

So where does this leave Sunderland? A symbol of Great British quality or of Britannia’s declining fortunes? The truth is, as in most cases, somewhere in between. Britain’s largest car plant is a genuine exemplar of car-a-minute efficiency, and Nissan does not want to let it go. At the same time, the pandemic has shown how everything can change for the worse overnight – whether because of politics or otherwise.