Nissan Said to Have Informed U.K. That Car Plant Would Be Closed

  • Automaker made clear site was at risk, person familiar said
  • Brexit impact was discussed by company officials, government

Nissan Motor Co.’s decision to keep investing in Britain came after the carmaker told the government it might shut down manufacturing in the country after Brexit, according to a person familiar with the private discussions.

The Japanese automaker announced Thursday it would start making the X-Trail sport utility vehicle and the next-generation Qashqai at the Sunderland plant. But only a month ago it warned that possible tariffs could damage investment in the country’s biggest car factory. The sudden shift drew questions about what assistance the government may have promised to keep Nissan in the U.K.

The company made clear to the government that failure to build the two new car models in Sunderland would eventually lead to the closure of the plant, the person said, asking to remain anonymous because the conversations were sensitive. The site employs more than 7,000 people and supports another 28,000 supplier jobs.

“There’s no special deal for Nissan” or for the automotive industry as a whole, May’s spokesman, Greg Swift, told reporters in London. Still, what emerged was that the government was informed of possible steps that Nissan would have to make to mitigate the effects of Brexit.

The person said it wasn’t accurate to describe the points made by Nissan -- during talks before Chief Executive Officer Carlos Ghosn met Prime Minister Theresa May -- as a threat: The company was simply spelling out the inevitable implications of having to move production of the new models to other plants elsewhere in Europe.

Models produced in Sunderland would over time probably be phased out by the automaker, and replaced with new lines, the person said. The rationale being that there is no point keeping a factory open if there is nothing to build. Other operations to support the factory -- such as battery production and research and development -- would also have been hit, if Nissan hadn’t committed to the future of the plant, the person said.

Former business minister Anna Soubry called on May’s administration to reveal whether it had promised to use taxpayers’ money to underwrite any tariffs imposed on the automotive industry after the U.K. leaves the European Union.

“I’d be very surprised if there hasn’t been some sort of guarantee to mitigate any tariffs,” Soubry said on Friday in a BBC radio interview. Nissan officials, she said, had told her tariffs were their main concern when she met with the company before the June referendum.

Labour lawmaker Chuka Umunna urged the government to publish the details of  commitments given to Nissan, according to a statement e-mailed by Open Britain on Saturday.

"It seems extraordinary that the government would reveal elements of its negotiating strategy to multinational companies when it is at the same time doing its best to keep parliament and the public in the dark," Umunna said.

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