U.K. Prime Minister Theresa May was given her most important corporate endorsement since the Brexit referendum in June after Japanese car-maker Nissan announced that it will build its new Qashqai model in Britain despite the vote to quit the EU.
A source, who was not identified, was quoted in the media claiming that as a package of support pledged by May’s government to counter any damage from leaving the EU was the thing that helped the carmaker’s decision to build the new model at Britain’s largest car plant, rather than elsewhere in Europe.
“This vote of confidence shows Britain is open for business and that we remain an outward-looking, world-leading nation,” May said in a statement.
Britain’s big car-makers ship more than half of their exports to the other 27 countries in the European Union and they are nearly all foreign-owned. While Nissan in particular had threatened to halt spending unless the government guaranteed it would be protected, al the foreign carmakers had had collectively warned that the June vote would make Britain a less-attractive destination for foreign investment.
Almost one in three of Britain’s cars last year were built in Sunderland, in the north east of England. Crucial to the fate of its 7,000 workers was the decision over the new model manufacturing place.
Nissan was convinced to build the next version of the Qashqai there and also start production of a new SUV, the X-Trail as the British government had promised to ensure the competitiveness of the plant, Chief Executive Carlos Ghosn, who met May earlier this month, said.
“The support and assurances of the U.K. government enabled us to decide that the next generation Qashqai and X-Trail will be produced at Sunderland,” Ghosn said.
With French car-maker Renault, its largest shareholder, Japan’s Nissan is part of an alliance. Ghosn runs both companies. After Reuters reported that the decision had been taken, the firm made the formal announcement. In the event of any negative effect on its business resulting from Brexit, the British government had pledged to provide additional relief to Nissan, reported Reuters citing a separate person familiar with the situation.
Nissan has earlier reportedly said that the final decision in the pans for the new models would be taken early next year, but the assurances that were given by the government had had helped the firm bring forward its decision on the issue, a company spokesman told the media.
Beginning a recovery in British car-making that had nearly collapsed in the 1970s, the then-Prime Minister Margaret Thatcher persuaded Nissan to open the Sunderland plant in 1984, and since then the plant has been a point of pride for May’s Conservative Party.
Despite that fact that car manufacturers and their unions campaigning to stay in the EU, this area had voted heavily in favor of Brexit on June 23 like other parts of England’s industrial north.
(Adapted from CNBC)
Categories: Economy & Finance