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Honda Warns Brexit Could Force it Out of the UK

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Workers at Honda's Swindon Facility

Honda has delivered a fresh warning to UK officials that thousands of British jobs could be lost if the nation leaves the EU’s customs union.

Meeting with British members of the European Parliament, Honda representatives explained that the government’s plan to leave the union could hurt their profits so substantially that it would be forced to leave the UK.

Honda’s European headquarters are located in Bracknell and the company currently employs approximately 3,600 people at its Swindon factory, with 350 deliveries of EU-sourced parts coming in every day for the new Honda Civic alone.

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MEPs were explained that some of these components arrive less than one hour before assembly as part of Honda’s “just in time” supply chain, which the customs union makes possible by eliminating border checks.

But any delay in deliveries could cost Honda up to £1 million per day. “We must assume the plant could not realistically continue under conditions where goods could not flow,” said Seb Dance, an MEP for the Labour Party.

The UK government has put forward a “Chequers plan” that would involve a free trade area for goods, in which the UK would accept EU rules and collect tariffs on behalf of the EU. However, the plan was rejected in Brussels and some British officials believe it is already dead.

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Hiroaki Nakanishi, chairman of the Japanese business federation Keidanren, said that Japanese businesses operating in the EU, such as Honda, are frustrated at the lack of clarity over what will actually happen when the UK officially ceases to be a member of the EU (when the Article 50 period ends on March 30, 2019).

“We just can’t do anything. Everyone is seriously concerned,” Nakanishi said. “Various scenarios get discussed from no Brexit to plunging into Brexit without any kind of deal at all. We’re now in a situation where we have to consider what to do in all of them.”

What seems increasingly certain is that if the UK doesn’t come up with a solution to accommodate not just Honda but all of the manufacturers and industries that were benefiting from its inclusion in the EU, its economy will take a nasty downturn.