Union seeks answers over British Nissan factory as Honda merger looms

Thousands of workers at Nissan’s giant UK car factory are facing uncertainty after the company began talks to merge with competitor Honda.

The Unite union has called for assurances after details emerged about the planned merger of major Japanese companies, along with smaller rival Mitsubishi, which would bring together three companies worth a combined £46bn.

The companies argue that combining their firepower makes sense as they battle companies like Tesla, as well as cheaper Chinese manufacturers like BYD amid the shift to electric vehicles.

The combined group, following a Nissan-Honda merger, would have annual sales of almost £182 billion, making it the world’s third largest car maker and employing 360,000 people.

It adds to the uncertainty surrounding Nissan’s Sunderland plant. Last month, the Japanese giant announced proposals to cut 9,000 jobs, or 7 percent of its global workforce.

However, the merger could be a boost for Sunderland if, as has been speculated, it means a return of Honda to the UK using some of the plant’s surplus capacity.

Today the factory, Britain’s largest car plant, employs more than 6,000 people and makes the Qashqai, Juke and Leaf models.

Nissan did not say whether or how Sunderland might be affected by yesterday’s announcement.

Unite union’s national head for the automotive industry, Steve Bush, said: “Unite will closely monitor the progress of the merger talks and will seek assurances from Nissan about any potential impact on its UK operations.”

Sunderland is currently operating at half capacity and executives have reportedly discussed the possibility of Honda producing vehicles there.

If that happens, it would mark a return to car manufacturing in the UK for the company, which once employed thousands of people at its Swindon plant but closed the site in 2021, blaming Brexit.

Professor David Bailey, of Birmingham Business School, said: “If the Government had an industrial strategy it would do everything it could to get Sunderland producing not just Nissan vehicles but also Honda and Mitsubishi as they have capacity there.”

Honda hopes to close a deal in June, and in August a new parent company for the three will be listed on the Tokyo Stock Exchange.

Although it has been billed as a merger, observers say Honda is taking over Nissan and Mitsubishi as it will pick most of the directors for the new owner of the three Japanese car brands, including key executives.

Nissan has been struggling with falling sales in the United States and China and last month issued a profit warning. Bailey said it was in “the last chance room.”

‘Nissan squandered its early lead in electric vehicles and did nothing in hybrids. “It’s in a terrible state now, this is very much a bailout by Honda,” he said.

Honda CEO Toshihiro Mibe said the company’s deal with Nissan was “essential” to help it cope with the changes taking place in the auto industry.