Nissan's Sunderland plant to miss out on 741 extra jobs in X-Trail U-turn - as Government offered firm up to £80MILLION to build new cars on Wearside

Nissan's decision not build its new X-Trail car in Sunderland means that 741 additional jobs will no longer be created, Business Secretary Greg Clark has said.

By Reporter
Monday, 4th February 2019, 5:40 pm
Updated Thursday, 7th February 2019, 4:33 pm
Sunderland's Nissan plant will no longer be building the new X-Trail
Sunderland's Nissan plant will no longer be building the new X-Trail

The news comes on the same day that it emerged the Government offered Nissan support of up to £80million if the Japanese firm built new models at its Wearside plant.

Business Secretary Greg Clark made the offer in a letter to the then-head of Nissan, Carlos Ghosn in October 2016, a few months after the EU referendum.

Sunderland's Nissan plant will no longer be building the new X-Trail

Mr Clark said he wanted to set out ways the Government wanted to work with the car firm ahead of investment decisions it was due to make.

The letter said: "As a demonstration of the UK Government's commitment, we are already working with your UK team on a package of support in areas such as skills, R&D and innovation.

"Work continues but I understand this could amount to additional support of up to £80 million. You will understand of course that this figure will be subject to business cases being developed, which are independently assessed, and the usual processes of due diligence.

"It is contingent too on a positive decision by the Nissan Board to allocate

production of the Qashqai and X-Trail models to the Sunderland plant. We recognise that the UK has a stake, and we are backing your continued success in Sunderland to the hilt."

The letter was published a day after Nissan announced it would not be building its X-Trail car in Sunderland.

The company said the decision was taken for business reasons, but made clear that continued uncertainty around the UK's future relationship with the EU was not helping it plan for the future.

Mr Clark said in his letter: "The Government fully recognises the significance of the EU market to your presence in Sunderland. It will be a critical priority of our negotiation to support UK car manufacturers and ensure that their ability to export to and from the EU is not adversely affected by the UK's future relationship with the EU.

"We will set our ambitions high and vigorously pursue continued access to the European market as an objective in future negotiations."

The development came after union leaders pressed Nissan for guarantees on jobs and future production.

Business Secretary Greg Clark, making a statement to the Commons today, said Nissan's announcement that it would not build its X-Trail car in Sunderland meant that 741 additional jobs would no longer be created, adding: "Nissan confirmed that production of the new Qashqai, Juke and Leaf will continue at Sunderland and there are no implications of the decision for existing jobs at the plant.

"They also pointed out what they've said consistently since 2016, that a risk of a no-deal Brexit is a source of damaging uncertainty.

"While I'm pleased the decision taken in 2016 to build the Qashqai and secure the Sunderland plant is unchanged, it's deeply disappointing to me and to the workforce that the extra jobs that would have come from the X-Trail will no longer be available.

"While the decision was made on broader business grounds, Nissan commented on the need for us to come together and to resolve the question of our future trading relationship with the EU.

"I believe their advice should be listened to and acted upon so that our automotive industry, which is undergoing more change through innovation in the decade ahead than it has for most of the last century, can seize the opportunities for Britain to be a world leader in state-of-the-art car-making - providing great jobs and careers for hundreds of thousands of people across our country during the years ahead."

An offer of grants totalling £61 million was made to Nissan in June 2018, Mr Clark revealed today.

The Business Secretary said in a letter to Rachel Reeves, who chairs the Business Select Committee, that a package of support included skills, research and development and innovation.

Mr Clark said that when he appeared before the committee in December 2016, there were aspects of his letter to Nissan that were commercially confidential.

"Further to my discussions with Nissan on Friday and over the weekend, I understand that the commercial confidentialities for Nissan are now reduced," he wrote.