Nissan’s Sunderland factory safe but plant in Barcelona will close

Nissan has confirmed it will not close its Sunderland manufacturing plant, instead shutting a factory in Barcelona as the Japanese carmaker seeks to cut £2.3bn in costs worldwide.

The decision puts 2,800 jobs at risk in Spain but removed a short-term threat to most of the 6,700 jobs at Britain’s biggest car plant in Sunderland.

However, the carmaker said it would seek to “improve efficiency” at the factory in the north-east of England as it revealed a plan to reduce annual spending by ¥300bn (£2.3bn) worldwide.

“In western Europe we will maintain production of our core models in Sunderland and improve efficiency,” said Makoto Uchida, Nissan’s chief executive, through a translator.

The cost-cutting programme came as the coronavirus pandemic pushed Nissan to its first annual loss in 11 years. Revenues fell by 14% year on year in the 12 months to 31 March, pushing it to a net loss of ¥671bn (£5.1bn).

The carmaker was forced to temporarily close plants around the world, including Sunderland, as the pandemic hit. Production in Sunderland, which produces the Qashqai and Juke SUVs and the Leaf electric car, is scheduled to restart in early June.

A Nissan spokesman declined to comment on employment levels at Sunderland but said that “Europe will remain an important part of Nissan’s global business”, even though the Barcelona plant closure would leave the Japanese carmaker with no EU car factories.

“The company will be focusing on core models and technologies, which in Europe is our range of crossovers and electrified technologies,” the spokesman said. “Sunderland remains an important part of our plans for the European business. The new Juke was recently launched, and the plant is now preparing for the arrival of the new Qashqai.”

Unite, the trade union representing British Nissan employees, demanded assurances that the plans for efficiency savings at Sunderland did not include job cuts or changes to workers’ contracts.

Steve Bush, Unite national officer for automotive, said: “We are seeking clear assurances from Nissan that the cost-cutting measures spoken about will not impact on our members’ jobs, terms and conditions or other benefits at Europe’s most efficient plant, Sunderland.”

Nissan has previously warned that a no-deal Brexit would jeopardise the “entire business model for Nissan Europe” because of the threat of 10% export duties on the majority of the plant’s production.

David Bailey, professor of business economics at the University of Birmingham, said options for Nissan in the case of a no-deal Brexit might include refocusing on the UK market.

The plant could also bid to build vehicles for Renault and even Mitsubishi under their three-way carmaking alliance. The three alliance partners on Wednesday said they would employ a “leader-follower” model, with Renault the leader in Europe.

Nissan is in talks over a proposal to build two models for Renault at Sunderland, according to the Financial Times. However, Bailey said the French government’s €5bn (£4.5bn) emergency loan guarantee to help Renault through the pandemic might mean it is less likely to allow production to move to the UK. The French government owns 15% of Renault’s shares.

“It [Sunderland] will still have to compete for investment,” Bailey said. “That will be a brutal competition.”

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