North East leaders have expressed confidence in the future of car making in the region, despite news that merger talks between Nissan and Honda have been abandoned.
It emerged on Thursday morning (12 February) that the two Japanese firms have called off talks to create what would have been the world’s third-biggest automotive corporation.
Nissan had previously announced 9,000 global job losses and production cuts, amid concerns about the company’s future.
The manufacturer, which employs around 6,000 people at its Sunderland plant, described its immediate prospects as a “severe situation” last year after financial results for the first half of 2024 revealed how its operating profit plummeted by £1.59 billion.
It had been hoped that a merger with Honda could have provided new investment to help safeguard Nissan’s future, but the negotiations collapsed with Nissan saying that Honda wanted to make it a subsidiary rather than an equal partner.
It remains unclear how the end of the merger talks, or the job cuts, will affect Nissan’s operations on Wearside.
North East mayor Kim McGuinness said on Thursday that car making “will play a vital role in our future as we transition to electric vehicles”, highlighting the announcement last month that a new factory will be built in Sunderland by Nissan supplier Jatco.
She added: “I’ll continue to work closely with Nissan and Sunderland City Council to grow the sector in our region. We are taking steps now to deliver just that: our Investment Zone has attracted global investment from JATCO, creating 183 skilled jobs in the electric vehicle supply chain, while we are also training the next generation of workers in electric vehicles and battery technology through MADE North East.
“I’ll continue to champion our region on the national and international stage, to create more jobs, training and opportunity for people across the North East.”
On a visit to Sunderland in December, Chancellor Rachel Reeves said the Government was “working to protect” Nissan jobs in Sunderland.
North East Combined Authority’s (NECA) chief executive Henry Kippin also confidently predicted that the company will stay in the North East “for a long time to come”.
On Thursday, Sunderland City Council leader Michael Mordey said Nissan had a “strong track record of investing in the city”.
He added: “It’s important we all continue to work closely together to ensure Nissan can continue to remain competitive here in the UK for the benefit of our economy in Sunderland, the North East and for UK plc, and can maximise its contribution to growing our green economy for the long-term.”
In a statement announcing the end of the Honda merger talks, Nissan confirmed: “During the discussions between the two companies, various options were considered regarding the structure of the business integration. Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU [memorandum of understanding], to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.
“As a result of these discussions, both companies concluded that, to prioritize speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate the MOU.
“Going forward, Nissan and Honda will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles, striving to create new value and maximize the corporate value of both companies.”
