It was heralded as the flagship post-Brexit agreement between the Government and the car industry.
But bosses at Japanese carmaker Nissan are set to renege on their promise to build a new car model in the North East, in a major blow to the Prime Minister’s Brexit plans.
The agreement to make new Qashqai and X-Trail SUVs in Sunderland was made just months after the referendum in 2016 and was hailed by Theresa May as ‘fantastic news’.
Bosses at Japanese carmaker Nissan are set to renege on their promise to build a new car model in the North East, in a major blow to the Prime Minister’s Brexit plans
She added at the time: ‘This vote of confidence shows that Britain is open for business and that we remain an outward-looking, world-leading nation.’
Today those comments will ring hollow to 7,000 Sunderland workers, with Nissan set to scrap plans to build the X-Trail there.
Precise details are expected to be made tomorrow, according to Sky News, and will prompt questions over the car giant’s future commitment to the UK.
Last night, Bridget Phillipson, Labour MP for Houghton and Sunderland South, said: ‘If confirmed, this would be deeply troubling news for the North East economy.
‘So many jobs depend on Nissan and the Brexit uncertainty has done huge harm to the automotive sector.’
The decision comes just weeks after Jaguar Land Rover and Ford both said they will axe nearly 5,000 jobs over fears of a No Deal Brexit. Manufacturers are warning Ministers that leaving the EU without a deal could destroy the industry. World Trade Organisation tariffs for car exports to the Continent are at ten per cent.
The agreement to make new Qashqai and X-Trail SUVs in Sunderland was made just months after the referendum in 2016 (Pictured, a worker assembles the Infiniti Q30 automobile)
Precise details are expected to be made tomorrow, according to Sky News, and will prompt questions over the car giant’s future commitment to the UK
The secretive deal with Nissan was struck in 2016, with Ministers refusing to reveal details beyond insisting it did not involve financial incentives for the company.
However, it was made with the company’s former chairman Carlos Ghosn, who is holed up in a Japanese prison cell.
The shamed ex-CEO is facing allegations of tax evasion and financial irregularities, with current bosses turning their backs on him.
Scrapping the X-Trail plans is not expected to have a major impact on current staff at the plant, but it is likely to mean the creation of several hundred new jobs will now be on hold.
The Nissan factory already produces the electric Leaf car, and other models including the Juke and QX30, with 440,000 vehicles rolling off production lines.
The secretive deal with Nissan was struck in 2016, with Ministers refusing to reveal details beyond insisting it did not involve financial incentives for the company
The X-Trail is currently made only for the Japanese market, but, without a free trade agreement between Britain and the EU, any plans Nissan may have to ship the X-Trail to Europe could be binned.
Last night, the Unite union’s assistant general secretary Steve Turner said: ‘We will be meeting with the company on Monday morning. Our priority is to ensure investment commitments are upheld.’
The car industry has been struggling in recent months, especially as diesel vehicles fall out of favour with drivers. But more concerning is that investment has collapsed in the past 12 months in the UK, according to the Society of Motor Manufacturers and Traders.
Mike Hawes, SMMT chief executive, said: ‘With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert.’
In January, Jaguar Land Rover said it would cut 4,500 jobs in the UK, mostly management positions, and Ford said 400 jobs would go from its Bridgend engine plant. Airplane and engine maker Airbus has also warned it could withdraw from the UK in the event of a hard Brexit. Nissan declined to comment.