Autos

Honda confirms UK factory closure but says it's not Brexit-related

Key Points
  • CEO Takahiro Hachigo said in a press conference Tuesday the decision was part of a global restructuring plan. Hachigo also said that Honda would continue to base its European headquarters in the U.K.
  • Meanwhile, another official from Honda told BBC radio on Tuesday that the closure was not Brexit-related, according to Reuters.
A transporter loaded with Honda cars leaves the Honda car factory in Swindon, southwest England, on January 30, 2009. Workers at Honda's British factory made the last cars Friday before a four-month shutdown caused by a sharp fall in worldwide sales. Production at the Japanese giant's plant in Swindon, southwest England, will be halted until June 1, with 4,200 workers receiving full pay for the first two months, reduced to 60 percent for the rest of the shutdown. AFP PHOTO/Max Nash (Photo credit should read MAX NASH/AFP/Getty Images)
MAX NASH | AFP | Getty Images

Japanese automaker Honda confirmed Tuesday that it plans to close its Swindon car plant in the U.K., risking the loss of 3,500 jobs.

CEO Takahiro Hachigo said in a press conference Tuesday the decision was part of a global restructuring plan. Hachigo also said that Honda would continue to base its European headquarters in the U.K.

Meanwhile, another official from Honda told BBC radio on Tuesday that the closure was not Brexit-related, according to Reuters.

British government officials have expressed their disappointment over Honda's decision to close its only plant in the U.K.

"The U.K. is one of the leaders in the development of these technologies and so it is deeply disappointing that this decision has been taken now," Business Secretary Greg Clark said, according to Reuters.

"This is a devastating decision for Swindon and the U.K.," Clark said. "This is a commercial decision based on unprecedented changes in the global market."

VIDEO3:4103:41
Something broader than Brexit happening in the auto industry: Analyst

On Tuesday, Honda said it had informed all of its employees about the proposal to close its Swindon plant.

"Honda of the U.K. Manufacturing has today informed associates (employees) of the proposal to close its Swindon vehicle manufacturing plant, at the end of the current model's production lifecycle, in 2021," it said in a statement.

In an emailed statement to CNBC, a spokesperson for Honda said the challenges due to uncertainties around Brexit remain.

"We still continue to see challenges in the future relating to Brexit. As we have previously mentioned, our desired outcome is frictionless trade between the UK and the EU, access to the right talent and regulatory alignment."

The Swindon factory builds the Honda Civic five-door hatchback and the CR-V crossover for sale in Europe and the U.S.

Honda's Hachigo said Tuesday that the company is not considering possibility of leaving the European market. However, it plans to export electric vehicles made in Japan. China to European markets.