Spotlight on Nissan's future in Sunderland as Japanese ambassador warns firms could leave UK after Brexit

Japanese companies could move operations out of the UK if Brexit makes it a less profitable place to do business, the country's ambassador in London has warned.

Monday, 5th September 2016, 8:30 am
Updated Monday, 5th September 2016, 1:06 pm
The future of Nissan's plant in Sunderland has been raised by ambassador Koji Tsuruoka.

Koji Tsuruoka said he had spoken with executives at leading Japanese firms in the UK and none of them wanted to pull out.But he stressed that all options are open to the companies, which have a duty to their shareholders to remain profitable.Mr Tsuruoka's warning comes a day after Japan's government issued a 15-page list of demands aimed at protecting the country's car manufacturers and financial institutions as well as the jobs of Britons working for Japanese firms after Brexit.Prime Minister Theresa May was due to speak face to face with Japanese counterpart Shinzo Abe at the G20 summit in China later on Monday.

The Liberal Democrats have called on her party not to risk jobs at Nissan's Sunderland factory and Hitachi in County Durham after Japan said its companies will withdraw from Britain unless its free trade is guaranteed with the rest of Europe.

Susan Kramer, Liberal Democrat treasury spokesperson, said: “Theresa May promised to govern for the whole country but losing Japanese businesses would devastate the North East, which can ill afford to lose jobs.

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“The Government must give urgent re-assurance to Nissan and Hitachi that Britain’s number one priority is to remain part of the Single Market to protect jobs and grow our economy. Unfortunately, Conservative cabinet ministers fighting among themselves over what Brexit means sends out all the wrong signals.

“The Liberal Democrats are the only party fighting to keep Britain open, tolerant and united and are the real voice of opposition to the Conservative Brexit Government.”Mr Tsuruoka told the BBC Radio 4 Today programme that hundreds of Japanese companies have operations in the UK, adding: "They are companies responsible to their stakeholders and their duty is to produce profit."If the way Brexit ends up does not provide companies with a prospect of making sufficient profit to continue operating in the UK, of course there is no option that they can't choose. All options are open to them."Asked whether that could mean a company like Nissan closing its car plant in Sunderland, Mr Tsuruoka said: "These are exactly the predictions that are going to hurt the future of the economy because these decisions have not been made."I have been talking to a number of Japanese business leaders operating in the UK and they all agree that the UK is the best place to do business in Europe.

"They want to continue to operate from the UK, and the list of issues we have put out to the UK as well as the EU are issues that they are seeking to achieve."However, there is a negotiation that will have to be conducted and if these requests are not met, then it will be for industry to decide what to do."It is very difficult to imagine that all Japanese companies - including the auto companies - will be pulling out in totality from UK, because the UK economy will be here and vibrant and it will be a good market for auto manufacturers to continue to sell their cars."The problem we will have to confront is what is the market that could be accessed for production outside of the UK?

"If there are conditions that block Japanese auto makers' cars being exported to continental Europe, such as customs duties, that of course will affect the competitive nature of the pricing of the cars."But that is also something that can be affected by the currency exchange rates as well. It is not just customs duties."Mr Tsuruoka said Tokyo wanted to see a "well thought-through consideration" of the issues before formal talks on the UK's withdrawal from the EU begin, and welcomed Mrs May's "cautious and very patient" approach to the invocation of Article 50.Japan accepted that Brexit will happen, as a democratic decision of the British people, he said.But he warned that European and international economies could be damaged if withdrawal harms the UK economy, adding: "Therefore we have a very important stake in making Brexit a success that will not damage or hurt the global economy."