First city to back Brexit, Sunderland has no fears of leaving EU

Nissan employs 6,500 people in the city and has warned of impact of new tariffs

Workers on the production line at Nissan's car plant in Sunderland, Britain, on October 10, 2019. Reuters

With a large home loan agreed and a baby on the way, the last thing that Stuart Hills needs is a crisis at work. But this is Brexit Britain so for Mr Hills there is as much uncertainty in the air as the whiff of paint and plastics near the Nissan car plant in north-east England.

“It’s crazy that people up here voted for Brexit in the first place when Nissan is here,” says Mr Hills, 27, who voted to remain in the European Union. “But people here are under the impression that Nissan will stay – could [the government] afford Nissan to go?”

The city of Sunderland where the plant is located has its own place in Brexit folklore. Its unexpectedly strong 61.3 per cent backing for Brexit was the first official declaration as ballots from the June 2016 referendum were counted. The result heralded Britain’s decision to leave the EU and prompted a plunge in sterling as the likely outcome of the vote became apparent.

Amid all the uncertainty of what Brexit means, polls show that people in Sunderland still back that outcome. The stakes for the area are higher than most.

If the UK leaves the EU without a deal on future trade, Nissan faces tariffs on the 70 per cent of its car products currently sold duty-free in the other 27 members of the European single market.

A tariff of 10 per cent would mean the company’s business model “will not be sustainable in the future”, the chairman of Nissan Europe, Gianluca de Ficchy, said last week as he launched production of a new model, casting doubt on the car-maker’s long-term presence in the UK.

The Japanese firm’s departure would be a heavy blow for its 6,500 workers and the 26,000 jobs reliant on the company in a region that has suffered more than most from Britain’s industrial decline over the last 50 years.

The sprawling Nissan factory is ringed by allied industries that supply its production lines. Earthmovers are preparing the ground for a planned high-technology park designed to build on Sunderland’s reputation as a car-making centre.

The International Advance Manufacturing Park – a joint initiative by local and central government – aims to “meet pent up demand for supply chain companies needing to be close to Nissan UK”, according to its promoter.

The project is part of a broader industrial strategy dubbed the Northern Powerhouse drawn up by the government of former premier David Cameron to create wealth in the less prosperous north of the country. Gross household incomes in the region were 56 per cent of London’s in 2017, according to official statistics.

Disillusionment with central government was a key reason why Sunderland voted for Brexit – despite the importance of Nissan.

Although a clean break from the EU would end the free movement of goods and services on which the success of the plant depends, the idea of it closing is derided by workers taking a cigarette break.

“I voted for Brexit for loads of reasons,” says one worker in his 50s, who declined to be identified. “The only thing that I have changed my mind about is just how pathetic the government is. We just want a conclusion now, the uncertainty is the biggest threat.”

Production has already been cut sharply over the past two years. The night shift ended last week as a result of reorganisation of the plant. Some workers blamed the 2015 emissions scandal in Germany, which has seen buyers shift away from diesel cars.

Nissan said it still intended to build in Sunderland where it has invested £100 m to make a revamped Juke model that started production last week.

But production of the Juke, Qashqai and electric Leaf models at Sunderland will fall to 360,000 vehicles this year, down nearly 20 per cent from the 2018 figure of 442,000. A trade body said this month that one in three car companies were cutting jobs because of fears of a no-deal Brexit.

For David Richardson, walking his dog on the perimeter of the plant where he once worked, concerns about its future reflect a wider economic decline in the region.

Mr Richardson, 78, used to operate the cranes in the area once dubbed the largest shipbuilding town in the world before the last of them closed in the 1980s. He worked at the Nissan plant as a contractor before he retired.

“It would be a crying shame if that goes. We’ll have to turn it into one of those theme parks, with roundabouts and animals for the children,” he says.

He says the EU has done “stupid things” but, as a man born during the Second World War, he is grateful that there have been no wars between member states during the UK’s 46 years inside European institutions.

The plant was built in the 1980s on the site of an airfield from where pilots fought in the Battle of Britain in 1940.

The pilots’ former dining room is now an Italian restaurant owned by the son of a Montenegrin diplomat. Basha, 32, is betting on the continued operation of Nissan.

In December, he says, he will start building a hotel behind the restaurant that will be used to mainly house short-term contractors working at the plant.

“I don’t think Nissan will be moving, they’re just threatening.”