Nissan UK delays pay talks as threat of no-deal Brexit looms

Pay talks between Nissan UK and its employees on Wearside have been delayed because of Brexit fears.

Companies in the car-manufacturing sector generally sign two-year pay deals with their staff and Nissan UK was due to begin this process this autumn. However, the company, which employs almost 8,000 people in the UK – most of whom are based in Sunderland – has decided to wait until the shape of Brexit is clearer.

A spokesman for the manufacturer said: “In agreement with our employee representatives, the 2019/2020 pay negotiations in our UK plant and technical centre will commence in 2019 when we have better clarity on the future business outlook.”

The firm said it would not comment beyond this for the time being.

Nissan UK, owned by the European arm of the Japanese majority-owned company, struck a single-union agreement with the Amalgamated Engineering Union (now part of Unite) when it agreed to build its plant at Sunderland in 1984.

A Unite spokesperson, responding to the pay negotiation delay, acknowledged the difficult position of the company in respect to Brexit: “This is disappointing news, but we have agreed this course of action with Nissan because of a lack of clarity on what Brexit means for the UK car industry. We have been assured that next year’s pay award will be backdated to January 2019 whenever we conclude negotiations. The delay is a further sign of the pressure that uncertainty surrounding Brexit is putting on the UK car industry.”

Last week the company warned of “serious implications” for its Sunderland plant if the UK left the European Union without a deal under which the current seamless parts supply chain could continue. Britain is due to leave the EU on 29 March next year.

Its statement said: “Since 1986, the UK has been a production base for Nissan in Europe. Our British-based R&D and design teams support the development of products made in Sunderland, specifically for the European market.

“Frictionless trade has enabled the growth that has seen our Sunderland plant become the biggest factory in the history of the UK car industry, exporting more than half of its production to the EU.”

Around 85% of the parts used at Sunderland are made outside the UK and currently arrive without customs checks or extra tariffs.

In 2016, in a major boost for Theresa May’s government soon after the Brexit referendum, Nissan announced it would build two new models at its Sunderland site after securing assurances of extra support from the government if Brexit damaged the plant’s competitiveness.

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Since then, growing unease among businesses has seen large employers such as Honda UK and Airbus issue warnings over the extra costs and negative effects on productivity and competitiveness that tariffs would introduce.

A further complication for Nissan UK may be caused by the fact that French car giant Renault owns a controlling 43.4% of Nissan, and is said to be pushing for a closer relationship, even a merger. Renault is part-owned by the French government.