Honda's Factory Closure Will Be Worse Than You Think

Honda Motor Co. President Takahiro Hachigo bows as he arrives for a press conference on February 19, 2019 in Tokyo, Japan. Honda announced on Tuesday the company plans to close its factory in Swindon, U.K. in 2021 putting 3,500 jobs at risk.
Honda Motor Co. President Takahiro Hachigo bows as he arrives for a press conference on February 19, 2019 in Tokyo, Japan. Honda announced on Tuesday the company plans to close its factory in Swindon, U.K. in 2021 putting 3,500 jobs at risk.
Photo: Getty Images
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Jobs lost, Nissan is moving for a separation, and the familiar refrains of “uhhh.... what I MEANT was...” This is The Morning Shift for February 20, 2019.


1st Gear: Don’t Forget The Suppliers

News broke yesterday that Honda plans to close its plant in Swindon, England, taking with it 3,500 jobs, British production of the Honda Civic, and a full 10 percent of all car production in the United Kingdom. But given that this one factory is such a huge portion of the national automotive industry, it’s not just going to take those 3,500 jobs. It’s going to cost a lot more, according to the Financial Times:

Honda has said up to another 3,500 roles could be lost among its suppliers, striking at the deep and complex network of businesses that make everything from tyres and body panels to screws.

“Astounded” was the word used by John Nollett, chief executive of Pressmark Pressings, after he heard the news. His company makes metal components and relies on Honda for about one-fifth of its turnover.

“I can’t see that the supply chain in the UK, unless it’s got a niche product, will survive this,” Mr Nollett said.

Some British companies count on Honda for 40 percent of their total business, the FT reports. And while Honda is saying this is all definitely not because of Brexit, the timing is certainly a bit off as the U.K. looks like it’s headed for an amputation-without-anesthesia from the European Union next month.

But inherent in the would-be promises of Brexit would be that it would be a boon for British industry, as British consumers would be forced to buy cars produced in-country by British manufacturers, much like in the good(?) old(??) days(???) of British Leyland(????????????????) which made only good that cars everyone loved (?????????????????!!!!!!!!!!!!!!!!!!!!!!), while “foreign” cars would be pushed out.

Even if that were the case, however, it’s going to be a while until someone brings back the Austin Maxi.


2nd Gear: Nissan’s Divorce Rumblings Are Growing Louder

It’s no secret anymore that Nissan is supremely unhappy in the lopsided relationship that is its tie-up with Renault (really unbelievably long story short: Nissan is much bigger than Renault, but due to some deal-with-the-devil-type decisions in the 1990s, Renault and, correspondingly, the French government, can basically control Nissan), but the mystery has been how Nissan plans to get out.


Taking out former joint chairman Carlos Ghosn may have been the first step, but as every terrible TV trope will tell you, certain things cannot be stopped by the elimination of one man. Renault owns a massive chunk of Nissan, and in the world of capitalism, ownership is all that matters.


And since Renault is officially in charge, and both companies need a new head honcho with Ghosn gone, it looks like Renault will choose the new Chairman for both companies.

But not if Nissan can stop it. Again, from the Financial Times:

Renault and the French state, its largest shareholder, are pushing for its newly installed chairman, Jean-Dominique Senard, to take the same role at Nissan, according to people familiar with the situation.

However, people with knowledge of the discussions said Nissan’s independent committee on governance was expected to recommend against the Japanese group having the same chairman as Renault — in part to avoid recreating the role Mr Ghosn held before his arrest in November on charges of financial misconduct.

The Japanese group is wary of appointing Mr Senard as chairman and again facing a situation that it said concentrated too much power with a single individual, according to people with knowledge of Nissan’s thinking.


It’s a little unclear what Nissan can even do here. Can it appoint its own head without influence from Renault? If not, can it restrict his powers? If it can’t do that, can it get the new guy arrested somehow, as well?

Grab the popcorn, we’re just getting started.

3rd Gear: Rumors Of White Collar Layoffs At Ford

It’s trying times, seemingly as always, for the American car industry. That means that rumors tend to circulate about layoffs pretty much constantly, but this one from Ford Authority is oddly specific:

According to sources familiar with the matter speaking to Ford Authority on the basis of anonymity, the newest round of Ford layoffs will target white collar vehicle development and engineering positions.

We’re currently unsure of the exact number of jobs that will be cut, but we do know that the automaker is focusing on white collar positions with 30 or more years of experience in vehicle development and engineering roles.


Ford Authority goes on to say that if someone laid off is close to the retirement age of Social Security, but isn’t quite there, that Ford will supplement their Social Security income until they can take full benefits at age 66. Which is at least the decent thing to do.

We’ve reached out to Ford for comment and will update if we hear back.

UPDATE 4:47 PM: A Ford spokesperson told us that, as Ford has previously said, the company is undergoing some re-structuring, and that may involve a planned reduction in its workforce. The company expects the process to be completed in the second quarter of this year.


4th Gear: Prosecutors Raid Hyundai’s Korean Offices

Prosecutors in other countries like to occasionally raid corporate offices, which is Good and Wise. South Korean prosecutors are doing just that at Hyundai’s offices, according to Reuters:

South Korean prosecutors on Wednesday raided the office of Hyundai Motor Co’s quality division in southern Seoul as part of a probe into how the automaker and affiliate Kia Motors Corp handled vehicle recalls over engine defects, online media Chosun Biz reported.

In 2017, South Korean civic group YMCA filed a complaint with prosecutors alleging the automakers delayed fixing engine defects that prompted massive recalls in Korea and the United States. Hyundai and Kia have denied the allegations.


If this really does affect the United States, I’m sure American prosecutors will be right on this one, too.

(They will not be.)

5th Gear: This Is What A History Of Getting In SEC Trouble Will Get You

Tesla CEO Elon Musk is fond of triumphantly announcing BIG TESLA NEWS on Twitter, even if it’s not big or not real or not even about Tesla. Historically that wasn’t much of a problem because humanity is mostly unjust, but after Musk got in trouble with the Securities and Exchange Commission over his “funding secured” tweet, that’s apparently changed a bit.


Last night, Musk announced that Tesla will make an astounding 500,000 cars in 2019:


That’s not just impressive, it’s also false. Tesla’s own SEC filings have said that Tesla can produce a maximum of 400,000 cars a year, as the Verge’s Sean O’Kane pointed out, and which is a far cry from “we will make 500,000 cars.”

And since contradicting your own SEC filings to pump up your publicly-traded company is Bad, Musk now had to walk it back:


See folks? The system works.

Reverse: Get That Twin-H Power

...on this day in 1909 Hudson Motor Car Company was born. The company made its first home in the old Aerocar factory on the intersection of Mack Avenue and Beaufait Street in Detroit, Michigan and quickly went to work. The first car rolled off the production line on July 3, 1909.


Neutral: Who Should Be Chairman Of Nissan?

And why is it Uzi Nissan?

Deputy Editor, Jalopnik. 2002 Lexus IS300 Sportcross.


Porschebago Redux, formerly Mini Mid-life Crisis

Honda needs to be honest and admit that this decision is directly related to the Brexit shitshow. They would be doing the UK, the EU, themselves, and the entire world economy a tremendous favor.