There is a fascinating battle playing out in the media about Honda and whether or not the closure of the Swindon plant was Brexit related. It's an important battle in what will probably be a very long war and we should study the present media coverage carefully. On the one hand even some employees think it is related with one describing Brexit as 'idiocy of epic proportions' (HERE) and an editorial in The Guardian (HERE) says it is 'partly' to blame. The company itself say the closure is 'unrelated' to Brexit.
Some commentators think Brexit might have played a more significant role but Honda are playing it down because they don't want to upset the workers, customers or the government. I think this is quite possible. Let's be honest the car industry has been warning what a catastrophe it will be if we don't get frictionless trade with Europe and at the moment that seems exactly what we will be getting. So to deny the two events are not linked seems to fly in the face of logic.
Meanwhile over at Brexit Central (HERE) an operation is under way to declare the two issues completely separate, as you might expect from the part-owner of the bull in the proverbial china shop to say.
Conservative Home (HERE) asks rhetorically if staying in the EU would have prevented the plant shutting in 2022 and concludes, entirely predictably, that it wouldn't.
Not to be outdone, The Telegraph ran a piece yesterday by one of their journalists, Ross Clark (HERE no £), who says: Let’s stop blaming the car industry's woes on Brexit - there's far more to it than that. This is quite the most bizarre article of all since Mr Clark claims it is all down to the industry itself being in a huge 'state of flux'. On this point I note in this morning's EU Referendum blog (HERE) Dr North says, more graphically, the industry is going through a 's**tstorm'. But it amounts to the same thing.
This to me is like arguing that you have a relative who is gravely ill but was left outside overnight during a blizzard in winter and subsequently died. The death might not be down to the blizzard but did it help? Probably not.
But back to Mr Clark and a bit of cognitive dissonance, because he says:
"The message for government is: stop trying to pick winners and instead concentrate on creating the fiscal and regulatory conditions which will attract businesses of all kinds to invest here".
The government, far from concentrating on creation, is busy vandalising and dismantling the fiscal and regulatory conditions that attracted Honda (and others) here in the first place. It is like urging Bradley Wiggins to jam the brakes full on and still go on to win the Tour de France.
Clark finishes with this:
"Honda has helped to bring prosperity to Swindon for the past 30 years, but if we keep taxes low and regulation efficient the town will have no problem attracting industries to replace it".
Really? Who will come to Swindon as a base to export into Europe? It would not make any sense whatsoever to use the UK, outside the single market and the customs union, to spearhead an operation to access the European market. Indeed it is apparently more economic for Honda to supply Civics and CR-Vs from Japan after the EU-Japan trade deal.
I daresay something will be found to help Swindon but it will probably focus on the domestic market and will therefore be much smaller and will not help our balance of trade. For a country that imports about 30% of its food and much of its manufactured goods this is not a good thing. To survive we need to export. Driving companies like Honda away will not help that.
Over the coming months we will see what happens to Toyota and the old Vauxhall (now Peugeot) factories as well as Nissan, JLR and BMW and whether or not Brexit is to blame. There are plenty of media battles ahead.
Update: The Japanese ambassador has said (HERE) to believe Brexit had nothing to do with Honda's decision is 'fanciful' - take from that what you will.
2nd Update: The company now say there was no one reason behind the plant closure after being confronted by warnings about Brexit that they themselves delivered last September (HERE).
Update: The Japanese ambassador has said (HERE) to believe Brexit had nothing to do with Honda's decision is 'fanciful' - take from that what you will.
2nd Update: The company now say there was no one reason behind the plant closure after being confronted by warnings about Brexit that they themselves delivered last September (HERE).
