Why do people always mention the iceberg when discussing the sinking of the Titanic?
Honda’s decision to shut its factory in Swindon with the loss of 3,500 jobs is nothing to do with Brexit.
The move, which comes on the back of a number of crushing manufacturing blows, was confirmed as a non-Brexit-related issue by the firm’s most senior executive in Europe on the Today Programme.
Like Sony, Dyson, Jaguar Land Rover, Panasonic, Lloyds, Unilever, Goldman Sachs, Barclays, Airbus, Flybmi, P&O, HSBC, JP Morgan, UBS, Ford, Hitachi, Toshiba, AXA, Moneygram, Philips and the Bank of America, it’s just a coincidence that it coincides with Britain’s departure from the biggest single market in the World.
And the Leave-supporting press have been quick to make that known.
“So much for the supposedly sacrosanct importance of geographic proximity in trade”, Guido noted.
“So much for the supposedly sacrosanct importance of ice proximity in the Titanic’s sinking”, Twitter responded.
Although there are doubtless a number of factors that contributed to Honda’s decision to leave British shores – global trends, the EU’s future free trade agreement with Japan and the sudden move towards electrification all played a role – to discount Brexit altogether is senseless.
As Bob Hancké, an Associate Professor of Political Economy at the LSE, noted here, “unless free trade in goods survives the EU-UK talks – something that looks increasingly unlikely – industry will quickly pack its bags and decamp to locations on the continent from where it can continue to produce, export and import without tariffs”.
The UK’s industrial supply chains are dependent on European manufacturers, and any disruption to that or uncertainty around it will lead to casualties and that is a simple fact.
And even if firms stay put for now, future investment and research will go elsewhere.
As the Guardian explains, “foreign-owned businesses, which have little allegiance to Britain, will have demoted the angry island in their global supply chain by the time a transition period is exhausted in 2020.
“Investments in new models will go to continental firms instead.”
So Honda may have moved to distance themselves in the Brexit debate – perhaps because they made a commitment to keep producing cars in Swindon “whatever the Brexit outcome” in September last year- but to not talk about Brexit as a factor is like discounting icebergs in the sinking of the Titanic. It’s time to get real, guys, because there’s trouble ahead.