Nissan, Brexit and the UK’s industrial headache

In our 2017 company report, we revealed that Nissan UK had received £800 million in corporate welfare from the UK government. The Nissan case shows a pattern of transnational corporations either getting the deal they want, or taking investment elsewhere. Brexit, therefore gives Nissan nearly unprecedented bargaining power with the UK government.

Writing in the Guardian, David Conn draws on our report to examine Nissan and UK industrial policy in the wake of the Brexit vote. Conn addresses the question of whether Nissan will stay, if the UK leaves the EU. Access to Europe is crucial for both Nissan and the north east economy. Conn, describes Nissan’s concern that Brexit will damage its Sunderland operation. In September 2016, chief executive, Carlos Ghosn said the government needed to provide “commitments for compensation”. Teresa May’s administration subsequently offered guarantees that Nissan’s competitiveness would not be adversely affected. Nissan however, is reluctant to make further investment while trading conditions remain unclear.

Margaret Thatcher opened Nissan’s Sunderland plant in 1986. The original deal was worth £124 million in 1984 (equal to more than £380m in 2017). In addition to regional development grants, financial assistance, and heavily discounted land Nissan gained access to European. The north east of England gained desperately needed employment.

Thirty years after Nissan’s arrival, Theresa May sought to publicly reassure the car maker that Brexit would not adversely affect it. In reality, if the UK leaves the EU the nature of that exit will determine the future of UK industry. If costs increase significantly, Nissan, like many companies may move operations elsewhere. In the north east, the impact would be profound. As Conn sets out in his article, in 2016-17, Nissan’s UK operation generated £6.4bn from sales and employed 7,755 people (a further 30,000 were employed by companies supplying parts to Nissan).