Thread by @EdConwaySky

As you may have seen, my colleague @MarkKleinmanSky just broke the news that Honda are planning to close their car factory in Swindon. 3,500 jobs at risk. Will be closed by 2022. A very big deal. A few further thoughts:

Some will be tempted to put the Honda closure down to Brexit. But not so hasty: major secular shifts happening in auto industry: dieselgate, shift to electric powertrains, econ demand moving from G7 to China etc. They are likely to have played as big if not bigger a part

More directly significant than Brexit is the fact that Japan now has a free trade deal with the EU. All of a sudden the economic obstacles to making a car in Japan and sending it to the EU have diminished. More on this here trade.ec.europa.eu/doclib/press/i… #Honda

But for any company wondering where to invest, Brexit raises big questions. It's likely to have played a part in Honda's decision, albeit smaller than many appreciate. No deal wld be disastrous for the continental supply chains that matter so much for 21st century manufacturers

Big fear for manufacturers is that they recognise (even if those in Westminster don't) that even a deal won't end the insecurity over future terms of trade. We'll still spend the next few yrs debating/fighting abt tariffs etc. Only now the cliff edge will be end-2020 not Mar 2019

Important Honda point: they have been far less reliant on govt bungs than most other car manufacturers in UK.
Taxpayer grants/assistance offered since 2016:
Nissan: £83m
Ford: £24m
Toyota: £21m
JLR: £12m
Honda: £0

How important is the Honda plant to UK car exports? Put it this way: in 2017 the Honda Civic was the single biggest UK-made car model exported to the US. Figs from @SMMT:

@SMMT Ominously, Honda story coincides with this one from the FT: UK's plans to attempt to piggyback on/emulate that EU-Japan trade deal aren't going well. As I say, that trade deal was likely a key factor behind both Honda and Nissan decisions ft.com/content/9cd62b…