You Still Can’t Read Nissan’s Brexit Letter
Oh 2016, you were a pretty bad year. We’ll see how 2017 ends up measuring against you, but considering that you took David Bowie, Carrie Fisher, and Harper Lee, you’re pretty far ahead. The UK also voted to leave the European Union in a move dubbed “Brexit,” which continues to be a hot topic (and headache) in that country. Before Brexit, Nissan UK had threatened in a not too subtle way to pull out of its large facility in Sunderland, England if it lost access to the EU’s single market. After the vote, the UK government sent a letter to Nissan, which the company followed with a major investment in its plants in the area. But what exactly did the letter say? You’re not allowed to know.
The content of a letter might not seem like a big deal, but sources told Reuters that the government promised to help support Nissan’s UK operations if the country left the single market. Without the single market, taxes and tariffs will make the products Nissan sends to Europe (or products fellow Alliance member makes in France to the UK) cost much more to manufacture. There were whispers that Nissan could move its plant in Sunderland, which helped stabilize the region, to France or Spain to save money in that case. This rumor was probably true, given that Carlos Ghosn, head of the Renault-Nissan-Mitsubishi Alliance, is a big fan of cutting costs to let Nissan vehicle pricing be more competitive.
If the British government really did promise to support Nissan as an incentive to make them stay, that could be a lot of money that the government would spend on Nissan instead of on needed social programs. Other UK car companies would also be unable to compete with a subsidized Nissan, which could be seen as an unfair advantage.
When the letter was originally sealed, business minister Greg Clark said it would be released one it was no longer sensitive. When Reuters requested to see it this month, they were told that “the letter will be released once the particular commercial confidentialities for the company are no longer there, and this remains the position.”
If we hear anything else about the deal Nissan made with the British Government, we will let you know. But we wouldn’t encourage you to hold your breath, it might be a while.
News Source: Reuters