Nissan told to told to reapply for United Kingdom funds

07 February, 2019, 14:13 | Author: Emmett Howard
  • Why Brexit uncertainty means companies plan for the worst

Nissan has taken a swipe at Brexit "uncertainty" as the vehicle giant confirmed in a letter to workers that the next-generation X-Trail, planned for its Sunderland plant, will instead be made in Japan.

"It's obviously very disappointing".

To date, some £60m of that money has already been provided to Nissan and a junior minister yesterday confirmed that the sum, disclosed for the first time yesterday in a letter sent by Business Secretary Greg Clark in 2016 to Nissan's then chief executive Carlos Ghosn, would not have to be repaid.

"The letter, written in October 2016, shows Nissan and the United Kingdom government's continued desire to support investment in the United Kingdom and maintain Sunderland as one of Nissan's manufacturing hubs in Europe", the company said Monday.

The vehicle giant is a major employer in the region, a former industrial powerhouse that has suffered decades of economic decline, and which voted heavily in favor of Brexit.

They are disillusioned with the ambiguous stance taken by leftist leader Jeremy Corbyn, who has been a long-term eurosceptic but said he voted to Remain in 2016.

The North East England Chamber of Commerce has responded to the news that auto manufacturer Nissan has chose to scrap plans to build one of its models in Sunderland.

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The plant was expected to create 741 manufacturing jobs, however, the prospect of a disorderly Brexit did not allow the company to move forward. Sunderland ultimately voted to leave by 61% - making it one of the most pro-Brexit cities in the UK.

BRITISH Prime Minister Theresa May said on Sunday she would be "armed with a fresh mandate and new ideas" when she next meets European Union negotiators over her Brexit deal.

In the case of Nissan, the availability of the full $104 million (£80 million) was contingent upon the Japanese firm allocating production of its Qashqai crossover SUV and X-Trail to Sunderland.

Nissan sought to allay concerns of its Sunderland employees, saying it will go ahead with planned spending on the next-generation Juke and Qashqai models.

Whist the company claims that existing production and the nearly 7000 jobs at the plant are safe, the decision to cancel X-trail production at the site - which was expected to create hundreds of new jobs - has caused a great deal of concern.

The backstop would kick in if Britain and the European Union have not agreed a trade deal on their future relationship after a limited transition period of up to two years.

Nissan's announcement has added to worries for local parts makers. Supply chains would be snarled and shipments could be delayed at the border. Diesel cars dropped from a 55% share of the European market - the UK, Germany, Italy, France, Spain - in 2014, to 36% in 2017.

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