Belfast Telegraph

Nissan may 'adjust' UK business after Brexit deal finalised

Nissan made
Nissan made "a strong request" for Britain to remain within the European Customs Union
Nissan senior vice-president Colin Lawther gives evidence to the Commons International Trade Committee on UK trade options after 2019.

Car giant Nissan may "adjust" its business in the UK, dependent on the outcome of Brexit, a senior executive has told MPs.

Senior vice-president Colin Lawther warned it would be a "complete disaster" if the delivery of parts to its giant Sunderland plant was disrupted by customs checks as a result of the UK leaving the European Customs Union (CU).

The car manufacturer announced in October that it was investing in production of new Qashqai and X-Trail models at Sunderland after receiving Government assurances that EU withdrawal would not affect the plant's competitiveness.

But chief executive Carlos Ghosn later said the company would "re-evaluate the situation" once the final Brexit deal is concluded.

Now Mr Lawther has told MPs that Nissan will "constantly review" its decision in the light of any material changes to its ability to trade with the remaining EU.

Giving evidence to the House of Commons International Trade Committee, Mr Lawther said that Nissan's preferred outcome from Brexit negotiations was for Britain's relations with the EU to "stay as they are", with continued membership of the single market.

Nissan had made a "strong request" to Government for Britain to remain within the CU, which was "very important to us", he said.

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He warned that a move to World Trade Organisation tariffs would "change the business circumstances" for the company.

If the UK crashed out of the EU without a deal and was forced to revert to WTO rules, Nissan "would have to look at the degrees of change and adjust our business to take into account whatever this new trading platform would be", said Mr Lawther.

The decision to expand in Sunderland was based on "a set of circumstances" at that point in time, he said.

"As those circumstances change, and we wouldn't wait until the end of the process, we will continually review the decisions that we take, based on anything that materially changes," he told MPs.

"So at the moment we have got a set of circumstances we are happy with and we will honour that decision going forward.

"But if anything materially changes, we would review constantly."

Prime Minister Theresa May all but ruled out full membership of the CU in a speech last month. And speculation that the UK may have to fall back on WTO rules was heightened by her declaration that "no deal is better than a bad deal".

Asked about the possible impact of tighter customs checks if Britain left the CU, Mr Lawther said that the smooth delivery of five million parts every day - many of them entering the UK through ports such as Folkstone - was vital to the operation of the Sunderland production lines. Delays totalling as little as six minutes a day were "a disaster" for competitiveness, he said.

"Any disruption to that supply chain is a complete disaster," he told MPs. "It would be a big business disruption to us if we didn't have free flow of parts."

Mr Lawther said that Nissan has not sought or received "monetary compensation" from the Government to offset the impact Brexit might have on its UK operations.

"The Government gave us assurances that it was the Government's intention that they would have a competitive trading environment at the end of the process," he said.

"I would expect that competitive trading environment be something that doesn't detriment our business."

Liberal Democrat leader Tim Farron said: "The promises Nissan got from the Government clearly weren't worth the paper they were written on.

"This is a damning indictment of this Government's hard Brexit plans which are putting thousands of jobs at risk."

Labour's MP for Sedgefield Phil Wilson, a supporter of the Open Britain group, said that Government assurances to Nissan were "built on sand".

A Downing Street spokesman said: "We have been pretty clear all along that what we want is to secure a deal that allows there to be an environment for Nissan and other companies in the automotive sectors to flourish.

"As we prepare to go into these negotiations, we do that in a spirit of optimism that we will get the right deal that will secure the environment that Nissan wants."