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UK Courted Nissan to Keep the X-Trail in Sunderland

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Nissan X-Trail in Geneva 2016
Source: Nissan UK

To say the economic future of the United Kingdom is foggy is probably the understatement of the decade. After voting to leave the European Union in 2016, the island nation has yet to strike a deal to stay in the European Economic Area. Thanks to Nissan deciding to move scheduled production of the X-Trail SUV from Sunderland to Japan, we now know how far the U.K. government is willing to go to keep big employers happy and stabilize its economy.

We first reported on a mysterious letter from the U.K. to Nissan in Dec. 2017. Before the Brexit vote, Nissan threatened to leave its huge Sunderland, England, facility behind if the U.K. left the EU. In the aftermath of the referendum, where a big majority of Sunderland residents voted against Nissan, the automaker made its disappointment known. To encourage it to stay, the U.K. government reportedly sent a letter to Nissan leadership. Following the communication, Nissan announced that X-Trail production was coming to England.

Rumors swirled about the letter, with several news sources believing that it promised money and support if Nissan stayed in Sunderland. Greg Clark, the business secretary, claimed at the time that it wasn’t true, but at the same time his office made sure that the letter didn’t become public. It turns out that Clark had offered Nissan a £61m package of state aid if they promised to produce both the Qashqai and the X-Trail in England, according to The Guardian. Since Nissan broke its part of the bargain and the X-Trail remains in Japan, the letter is now public.

When rumors of the Nissan letter first surfaced, other manufacturers and global companies were upset that the government would do so much to help one company and not others. Now that it’s public, other parts of the U.K. government are frustrated that they were misled about the contents of the letter. So far, £150 million in state aid is going to automakers in the U.K. like Ford, BMW, and Toyota, all without Parliament’s approval. Even though Nissan backed out of its original deal, it’s still eligible to apply for state aid again for the Qashqai.

Members of Parliament have made Greg Clark promise to inform them when he grants state aid packages, but it doesn’t seem as if the repercussions of the story are quite over. Will the U.K. pay companies to stay for the near future? Or will it eventually make them face whatever economy Brexit creates? We’ll see what happens in March.

News Source: The Guardian