Nissan to 'constantly review' future of its Sunderland plant during Brexit process

Nissan may 'adjust' its business in the UK depending on the outcome of Brexit, a senior executive has told MPs.

Tuesday, 28th February 2017, 11:28 am
Updated Wednesday, 1st March 2017, 9:11 am
Colin Lawther

Senior vice-president Colin Lawther told the House of Commons International Trade Committee today the firm would 'constantly review' its decision to build two new models on Wearside in the light of any material changes to its ability to trade with the remaining EU

The car giant announced in October that it was investing in production of new Qashqai and X-Trail models at Sunderland after receiving Government assurances that EU withdrawal would not affect the plant's competitiveness.

But chief executive Carlos Ghosn later said the company would 're-evaluate the situation' once the final deal is concluded.

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The Japanese firm employs more than 7,000 people at its Sunderland plant and supports almost 30,000 more in its supply chain, the vast majority of which is based in the North East.

Mr Lawther said today that Nissan's preferred outcome from Brexit negotiations was for Britain's relations with the EU to 'stay as they are'.

In talks with the Government, Nissan made 'a strong request' for Britain to remain within the European Customs Union, said Mr Lawther, and he warned that a move to World Trade Organisation tariffs would 'change the business circumstances' for the company.

Prime Minister Theresa May all but ruled out full membership of the Customs Union in the Lancaster House speech setting out her goals for Brexit last month.

And speculation that the UK may have to fall back on World Trade Organisation (WTO) rules was heightened by her declaration that "no deal is better than a bad deal".

Mr Lawther told the committee a move to WTO tariffs would change the business environment for Nissan's UK operations, adding: "We would have to look at the degrees of change and adjust our business to take into account whatever this new trading platform would be."

The decision to expand in Sunderland was based on 'a set of circumstances' at that point in time, he said.

"As those circumstances change, and we wouldn't wait until the end of the process, we will continually review the decisions that we take, based on anything that materially changes," he told MPs.

"So at the moment we have got a set of circumstances we are happy with and we will honour that decision going forward.

"But if anything materially changes, we would review constantly."

Mr Lawther said that Nissan had not sought 'monetary compensation' from the Government to offset the impact Brexit might have on its UK operations.

A letter setting out the assurances which the Government could offer to Nissan contained no promises of grants to make up for additional tariffs which the company may face in future trade with the remaining EU, he said.

"The Government gave us assurances that it was the Government's intention that they would have a competitive trading environment at the end of the process," he said.

"I would expect that competitive trading environment be something that doesn't detriment our business."

Nissan was seeking grants from the Government to support competitiveness, but this was not linked to Brexit, he said.

Mr Ghosn's suggestion that there could be 'compensation' for car firms related to 'compensatory measures, tax measures, infrastructure measures or competitiveness measures', said Mr Lawther.

This could involve measures such as lower corporation tax, duty-free movement of parts coming into and out of the Customs Union or a sector-specific deal for the automotive industry, he suggested.