Nissan shuts Sunderland factory as coronavirus disrupts industry

Carmakers including Ford and VW cite global economic turmoil as production is suspended at European plants

Nissan has shuttered its Sunderland factory, Britain’s biggest car plant, joining a number of automotive firms and aerospace giant Airbus in ceasing production as the coronavirus pandemic causes widespread industrial disruption.

The mass shutdowns came as US aircraft manufacturer Boeing, still reeling from the grounding of its 737 Max planes after two fatal crashes, asked the US government for financial assistance to support it through the Covid-19 outbreak.

Japanese carmaker Nissan, US rival Ford and Germany’s Volkswagen all cited global economic turmoil as they suspended production at European plants on Tuesday.

Nissan’s decision means work will stop at its Sunderland factory, which employs 6,000 staff and produces about 440,000 vehicles a year. The company said: “Further measures are currently under study as we assess supply chain disruption and the sudden drop in market demand caused by the Covid-19 emergency.”

It did not say whether it might resort to job cuts to shore up its finances if disruption is prolonged. But the suspension of work will be a huge blow to workers at the plant, who were told less than a fortnight ago that the company would press ahead with a £400m plan to build its new Qashqai sports utility vehicle at its factory, despite its misgivings about Brexit.

Volkswagen, the world’s largest carmaker, will also pause assembly lines, with work stopping at factories across Europe for two weeks. Frank Witter, the company’s chief financial officer, said on Tuesday that uncertainty about the severity and duration of the virus outbreak made it impossible to give a reliable outlook for sales.

VW’s powerful works council has also concluded that it is not possible for workers at its plants to maintain a safe distance from one another to prevent contagion and has recommended a suspension of production from Friday.

The stoppages will take hold at VW’s Spanish plants, in Setubal in Portugal, Bratislava in Slovakia, and at the Lamborghini and Ducati plants in Italy before the end of this week. Brands under the VW umbrella that will be affected include Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda.

Manufacturing at the European plants of US counterpart Ford will cease a day earlier, on Thursday, for “a number of weeks”, affecting plants in Germany, Romania and Spain. Ford’s shutdown does not affect its UK engine factories at Bridgend and Dagenham.

Stuart Rowley, Ford’s European president, said: “While the impact of coronavirus at our facilities so far has been limited thankfully, its effects on our employees, dealers, suppliers and customers, as well as European society as a whole, is unprecedented.

“Due to the dramatic impact this ongoing crisis is having on the European market and the supplier industry – together with the recent actions by countries to restrict all but essential travel and personal contact – we are temporarily halting production at our main continental Europe manufacturing sites.”

In the aerospace industry, Airbus will suspend production at its French and Spanish facilities for the next four days to implement tougher health and safety protocols, including more rigorous sanitation and enforced distancing between workers.

Work will continue at the main UK sites where Airbus designs, tests and manufactures aircraft wings, at Broughton in north Wales and Filton in Bristol.

In the US, Boeing has already confirmed that it is in talks with senior White House officials and congressional leaders about short-term assistance for itself and the entire sector.

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The aviation industry has been devastated by the dramatic plunge in cross-border travel, amid warnings that a flurry of airlines could follow UK regional carrier Flybe in going bust.

Boeing has reportedly called for Donald Trump’s administration to offer support for manufacturers, suppliers and airlines to help the sector survive the crisis. US airlines have asked Washington for $50bn (£41.5bn) in federal grants and loans, plus tens of billions in tax relief.

European airlines are also demanding urgent tax relief to avoid multiple bankruptcies. As the region’s transport ministers prepared to discuss financial support, the Airlines for Europe group called for widespread tax deferrals “to ensure that as many airlines as possible survive” the crisis.

Contributor

Rob Davies

The GuardianTramp

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