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Honda Plans to Leave Britain as Brexit Draws Close (nytimes.com)
61 points by CaliforniaKarl 32 days ago | hide | past | web | favorite | 54 comments



I remember working in telecommunications in "high-cost" sites. Even when there wasn't a portfolio consolidation due to some merger, people were constantly living with the fear of heaving their jobs moved to "lower-cost" countries.

When I read such news, I automatically wonder how much of this is because the company wanted the option to move some other place anyway and now Brexit gives them that excuse. I'm not saying that's always the case (especially with smaller companies or what is referred to as the "Mittelstand" in Germany). But in a climate where an employer can simply open a new site in a more forward looking region/climate (and be welcomed with state funding promises by that country), it would make sense.

EDIT: this guy on twitter has been tracking the companies that plan to downsize or leave UK due to brexit: https://twitter.com/uk_domain_names/status/10669721715185582...

for the automotive specifically: https://twitter.com/uk_domain_names/status/10539482087984168...


Moving back to Japan is hardly the low cost option.


They already have factories and extensive supply chains in Japan, so it’s not necessarily all that expensive, especially if the Swindon plant needs re-tooling for new models. Typically such decisions coincide with plant and tooling refresh cycles.

Remainer though I be, looking at it objectively I suspect this has more to do with the recent EU trade deal with a Japan. Cars made in Europe were exempt from import duties, but now that import duties on cars from Japan are going away that incentive is going away with it.

But then making cars in the UK may become liable to EU import duties after brexit, and we wouldn’t benefit from reduced duties selling our native cars into Japan either, so there are a lot of increased risks over here.

Brexit hasn’t happened, so it’s hard to draw a straight line between any one event like this and Brexit. That doesn’t mean it isn’t a factor and we do know investment in the UK has collapsed over the last few years, particularly in manufacturing.


it's not about returning to low cost but about global competition. The UK has outdone itself to proof they can't be trusted with providing a stable climate in which to plan ahead.

also we don't know what kind of concessions the city of Tokio, Osaka or Nagoya have made as a promises to the company if they return and create X number of jobs there. As others mentioned it might be because of the recent EU-JP trade deal but usually the reason is that the region has promised to give tax breaks or other incentives ...


I'm literarly hanging on the edge of the seat in this self inflicted catastrophe that is Brexit.

I view it as an experiment in what happens when common sense fails to win in an election.

I'm a EU citizen and Brexit will have negative impact, but I really want them to see this through, preferably in a no deal fashion.

I want to see what happens. Was it realy project Fear, or - what I belive - this will spell total shit for UK for comming years and decades.


> I view it as an experiment in what happens when common sense fails to win in an election.

I see it as that combined with a poor electoral system. Common sense wasn't on offer from either major party at the last General Election, the main party offering it is now rather minor and considered tainted through the last coalition, and others (Green etc) are tiny.

The small parties are held in check by our antiquated First Past The Post voting system which disenfranchises all votes but the winner in a given area.

So people are faced with the old dilemma - I'd like to vote for C or D really, but if I don't vote for A, B is likely to get in, and I hate B. I really hate B!

> Was it realy project Fear

There was definitely an element of fearmongering, and there has been ridiculous hyperbole on both sides of the argument. I believe outcomes will be a net negative, but also that you can't really take anyone's forecast seriously.


Two elections, May gambled on the needless General Election and then had to go to bed with the radicals from the DUP.

As interesting as the "lesson" of a no-deal would be (and it would be shit because France or Ireland can't just keep the border wide open as it is without getting sued by the EU, the majority of the UK voters are coming to realize that it is a stupid idea and has to be prevented. What has to change is this toxic english press that wrote so many lies about the EU for decades.


I think a no-deal is very likely at this point. It will be interesting to see how much everything was hyped by media and what are the real lessons for other countries ... Could it really be that a complex set of contracts is so poorly implemented that the exit conditions will push a state over the brink ?? If yes then I wonder how nobody thought about risk and contingency - after all contracts can always be reviewed, re-negotiated and revised. Preferably every couple of years. If EU membership is a one way road that can only be untangled with economic hardship (or even civil war) then other countries should start thinking for their own contingency. Even they don't intend to leave it's just good practice ... Similar like Russia planning to shut off their connection to the rest of the Internet. If you don't plan for such scenarios and practice resilience and recovery it'll eventually end in tears (whatever system/s you build).


> the exit conditions will push a state over the brink ?

It doesn't have to be a disaster; the separation of Czechoslovakia was comparatively easier!

It is a disaster of choice due to lack of coherent planning. The government position makes no sense - why are we trying to leave the customs union too?

The EU membership brought benefits. It should not be surprising that leaving it is disadvantageous.

Russia leaving the Internet would cost them a lot more if they had a tech industry and weren't a non free petrostate.


It will be "total shit" because the EU wants to punish the UK so the other European countries stay in line.


Hardly punishing. We can no longer use the pool because we resigned gym membership. That's not exactly innovative. The same deal for paying members and non members would be a very unusual association.

It will be total shit because those who most vocally backed Brexit are amongst the first relocating themselves and their businesses. Like Britain's richest Jim Ratcliffe, Dyson etc.


"Using the pool" is not a good analogy here.

The EU has been trying to force airlines to become majority EU owned. That's not a "pool" that's being "used". It's a simple economic attack in retaliation for leaving.

The EU also tried to force euro clearing out of London again, although it appears they just gave up on that and ESMA decided the EU would allow it to continue in the UK. Which is odd because losing the financial passport was supposed to spell certain doom for the Euro clearing market, but apparently it wasn't that easy for the EU to forcibly relocate all that business. Being able to sell services to people in Europe is not a pool - it's the absence of artificial blockades.

The EU is doing or threatening to do lots of things that aren't comparable to a sports club. In fact it would appear that most of the "benefits" of EU membership appear to merely be the absence of various forms of economic attack. There's no technical reason why the EU has to implement these policies after all. It's just that if they didn't impose artificial penalties on non-members, membership would be even less attractive than it already is.


Great. European carriers get the strongest protections for delays, lost luggage and what have you. Something UK citizens can keep.

Doesn't, to me, seem an economic attack. A non EU carrier can still fly to and from the EU. It merely potentially limits flying slots within the EU. Want to fly Paris to Madrid route, be an EU carrier. That seems to hold with the analogy. Pretty sure US and other nations have limits on internal routes too.

Incidentally, in preparation for a no deal farce, Ryanair are reregistering some planes in the UK to still have the option of flying our few internal routes.


Even assuming that anyone in the EU wants that, it doesn't seem necessary. The UK government has taken care of that.

Look at https://www.bbc.com/news/uk-47213842 for example.


"the EU" _is_ "other European countries"


Maybe they don't? I'm pretty sure most EU politicians prepare for a no deal brexit.


I think at this point the exodus will continue regardless of Brexit outcomes. The underlying social divisions and political mess aren’t going away, and the unpredictable reality of British politics has been thoroughly exposed. The ERG isn’t going away, the people who voted for Brexit aren’t going away (at least not quickly). Moving a business now will hurt, but less then potentially a decade or more back and forth maneuvering depending on who is in power.

I truly believe this spells the beginning of the end of us as a center for business and finance.


It's worth noting that a lot of major car manufacturers have raised concerns about this:

- Nissan cited Brexit as a reason for not building one of its latest models in England

- Jaguar/Land Rover is cutting jobs citing 'geopolitical reasons'

- Toyota has warned against Brexit

All taken from: https://www.bbc.com/news/business-47225787

As an expat, I'm fascinated to see how Brexit will play out.


It’s interesting how every company that suddenly leaves the UK as the deadline approaches says it’s due to some other reason and factors.

Even if it were true, it does bring up that when you destabilize an economy by adding uncertainty it puts you at more risk when weathering the other normal economic bumps. So what breaks the camel’s back may not be Brexit, but you’ve added a lot of burden to make a straw a bigger concern now.


> It’s interesting how every company that suddenly leaves the UK as the deadline approaches says it’s due to some other reason and factors.

Nobody wants to get in a fight with the Brexit press.


To them brexit is a colossal cardboard box sitting on camel. They have no idea what’s even in it let alone compute how much it weighs.


Here's an interesting question about uncertainty.

Can you measure it? What units is uncertainty measured in? If there are any, is there a curve that maps uncertainty to changes in GDP and if so on which historical events was this curve calibrated?

If you ask these questions you rapidly find yourself into a bottomless spiral of, ironically, uncertainty, as the economics profession can't give a straight answer to any of them. In fact some economists think uncertainty based recessions don't exist at all.

The UK appears to be a strong counterexample. It was supposed to experience a recession that wiped out half a million jobs due to the plunge in investment that would be triggered by the uncertainty of voting Leave. In fact the economy grew, wages went up, employment went up, immigration levels have hardly changed overall, and the UK is now the best performing EU country in the G7.

Moreover despite there being tremendous uncertainty about whether there'll be a deal of any sort of all, there still doesn't seem to be any measurable impact. That's why the Remain contingent keeps pointing at individual cases - there is no observable Brexit effect in the actual economic statistics themselves. And for every case of a company leaving and blaming Brexit, debatable thought these cases are, there seem to be other cases of companies doing the opposite, like Citigroup who donated to the Remain campaign yet nonetheless appears about to spend £1.2 Billion buying its London HQ:

https://www.thetimes.co.uk/edition/business/citigroup-hands-...

So you said this:

it does bring up that when you destabilize an economy by adding uncertainty it puts you at more risk

But where is the evidence of this destabilisation? As far as I can tell, if you somehow didn't know about the vote or the negotiations, you'd conclude the opposite - German growth has hit zero, Italy is in recession, the Spanish government just collapsed, and there are massive riots every weekend in France. Where's the instability in the UK? It looks pretty peaceful in comparison.


Bentley is estimating their cost at > £1B.


"All European market production is being consolidated to Japan, where the company is based"

It really isn't a Brexit story.

Material Brexit issues are interesting, but just as interesting is the fact that every single issue facing the UK seems to be drawn into the narrative, whether it should be or not.

Brexit is therefore just as much a story of warring perceptions, as it is any kind of reality.


> "All European market production is being consolidated to Japan, where the company is based"

I don't know if your conclusion is true or not, but I don't understand why you think that statement demonstrates it? A company could easily decide that, due to Brexit, it is no longer worth manufacturing offshore at all, because the European market overall is now fragmented too much (manufacturing in either region incurs export costs to the other).


"I don't know if your conclusion is true or not, but I don't understand why you think that statement demonstrates it?"

The article clearly indicates that Japan is shutting down manufacturing in across Europe.

We also know that the Japan just signed a major trade deal with Europe, which would abnegate the need to manufacture in Europe.

Though surely Brexit could be mentioned in the article, there's no reason at all to cram it into the headline, as there are no facts on the table to tie the events together.

A more obvious headline would read "Japanese auto makers shuttering plants across Europe after EU-Japanese Economic Agreement Signed".

But that would imply an entirely different narrative - which is by the way my interest and point i.e. 'how these stories are presented' whatever the facts.

As with a few other 'tiggering' subjects - it's hard to have a discussion about Brexit on HN.


That trade deal was stalled for a long time over cars and cheese until Brexit came along. Then it was agreed in no time.


That sounds like the timing of the decision is so as to deliberately use Brexit as an excuse - which doesn't surprise to be honest.


I don't think so, on the whole companies are going out of their way to avoid getting dragged into the debate. There is nothing to be gained for them.



"All European market production is being consolidated to Japan, where the company is based"

Doesn't seem to be related to brexit.


Honda will be able to fall back to production in Japan thanks to a trade deal with the EU that has just come into force. That trade deal was agreed in 2017 after the UK had formally started it's withdrawal, so the UK was no longer able to make sure the deal suited UK industry. There is no guarantee that the UK would have done so of course, we have no idea what we're doing and we are no longer fooling anyone.

Car sales are down globally but, while the downturns are when large companies make their cuts, the decision to pull out of a country completely will be driven by long term considerations. I think the Japanese establishment have lost confidence in the UK and, having prepared their lifeboat in 2017, they are now abandoning ship.

Two years of lunacy have brought things to the point that parts and vehicles in transit between Japan and the UK are in a legal limbo: if you ship something now you don't know what customs and regulatory arrangements will be in place in six weeks time when your goods are unloaded! The 29th of March will not bring a moment of clarity. Whether it's an exit under the withdrawal agreement or a crash-out, the exit will not establish the replacement trade agreements. We still need to negotiate them all [1]. What we've done so far was the easy part and we clearly were not ready even for that.

[1] Well, not all of them. At least we've wrapped up an agreement with the Faroe Islands.


"Like Nissan, Honda stands to benefit from a new trade deal between the European Union and Japan, which will make it easier to produce cars in Japan for export to the bloc. "

Due to Brexit they no longer have access to the EU internal market from the UK. Add to that a new trade deal between the EU and Japan and there is little reason for them to stay in the UK.


Sort of. Primarily it's because of the EU-JP FTA.

But even if they didn't happen they would've had to leave since both UK parties want to leave the single market. And without the single market it's very difficult to run a frictionless supply chain across the channel.

It's why you are seeing lots of manufacturing companies preparing to leave UK.


There is only one Honda plant in the EU. Also because of the new trade deal between the EU and Japan it’s possible cheaper for them to export from Japan than a UK because of the brexit (regardless if there is a deal)


> There is only one Honda plant in the EU

That's not correct; there is an auto parts factory in Belgium and a light-machinery plant in France ( my lawnmower and generator hail from there ).

They are also planning to close the Civic production factory in non-EU Turkey which produced the saloon to import to the EU, to complement Swindon's hatchback.




“About 40 percent of the components that Honda uses at the Swindon factory come from the European Union”


How is this comment possibly downvoted?

The facts of the article poignantly contradict the headline, which is quite common as the Brexit narrative is distorted daily in all directions.

Japan is withdrawing from Europe, point blank, this really isn't so much a Brexit issue, certainly not warranted in the title.


You are trying to tell me that its an unlucky coincidence that the businesses are shutting down right around Brexit deadline, and Brexit nothing has to do with it?

Sure.


"All European market production is being consolidated to Japan, where the company is based"

Japan just signed a major trade deal with the EU which would abnegate them from the need to actually make any cars in Europe anymore, since they can be imported into Europe sans tariffs.

Ergo - this is a story about how an EU/Japan trade deal is causing the closure of plants across Europe.

Clearly Brexit might be part of the calculus but there's no evidence to suggest how they are related.

You've offered no evidence or logic, and neither has the article. I don't think there's any clear reasoning on how Brexit factors into this.


> Ergo - this is a story about how an EU/Japan trade deal is causing the closure of plants across Europe.

Any examples of closures elsewhere in the EU?


Taken from a comment further up: "They are also planning to close the Civic production factory in non-EU Turkey which produced the saloon to import to the EU, to complement Swindon's hatchback."


Exactly, that's non-EU just like the UK is about to become.


Turkey is in a customs union with the EU.


Meanwhile Austria's chancellor Kurz is visiting Honda [1]...

(Austria has a strong automotive industry)

[1] https://www.bundeskanzleramt.gv.at/-/bundeskanzler-kurz-sued...


Per the BBC, this has nothing to do with Brexit:

"Honda said the move was due to global changes in the car industry and the need to launch electric vehicles, and it had nothing to do with Brexit."

https://www.bbc.com/news/business-47287386


Good update on Brexit yesterday from Last Week Tonight:

https://www.youtube.com/watch?v=HaBQfSAVt0s

This answered a lot of questions that I (an American) was wondering about the current state of things.

The most telling moment is when a man who imports flowers says that his entire business will probably be ruined by Brexit, but then goes on to say that he voted to leave. When pressed further about whether he considered his business when he voted, he says "I didn't really think about it."


"I didn't really think about it."

Seems to sum up politics for 25% or more of the electorate across plenty of the globe right now. Summed up another way might be "they're all a bunch of useless, corrupt bastards".

Sigh, I'd have to switch my VPN endpoint to watch that clip.


You Americans might laugh at this, but then you voted Trump. Us Aussies have our own shitty politicians, so we are not laughing.


Are you familiar with the show? No American viewer of Last Week Tonight is so lacking in self-awareness that they would condescendingly "laugh" at Brexit as if their own country was doing fine. There's nothing contradictory about thinking Brexit and Trump are both fiascos. The point of the segment (and the show in general) is to inform, not to laugh.

Also, no American host would ever really do a segment like this. John Oliver is British so he has a unique sort of soapbox being the host of a show whose audience is primarily in the US. That cross-cultural dynamic is one of the things that makes the show unique.


—-


How is Amazon’s pulling out of NY related to Brexit?




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