Pay talks suspended at Nissan and JLR due to Brexit scenario

29 October 2018

Vehicle manufacturers with plants in the UK are delaying pay talks with their staff until the terms of Brexit become clearer.

Jaguar Land Rover (JLR) and Nissan have delayed talks over wage increases due to the potential financial pressures that any no-deal Brexit could offer. The news is the latest in a series of contingency plans issued by automotive companies.

The Japanese manufacturer, which until recently had refrained from vocalising any concerns over the ongoing situation between Britain and the EU, is taking action as it looks to fully understand how the future relationship between the two parties will affect manufacturing and trade.

Nissan was expected to start negotiating its next two-year pay deal with staff this autumn, with those working at its plant in Sunderland coming to the end of their existing contract.

“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,” a representative said.

The company has been quiet on the subject of Brexit until now, but with the deadline for a deal looming, and nothing seemingly positive coming from both sides, it has joined the chorus of carmakers, suppliers and authorities highlighting their concerns over the present situation.

′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. We urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade,’ the company told a UK newspaper recently.

Meanwhile, JLR has also said it has agreed with unions to adjourn pay talks after a weak financial performance caused by difficult issues in China, declining diesel sales and Brexit uncertainty.

′The company and the trade unions will meet regularly for strategic business reviews to monitor these developments, and we will reconvene the pay talks once the company and the JNC have gained further clarity on market conditions and the outcome of Brexit over the coming months,’ it said in a joint statement with the Unite union.

The company recently shut down two of its plants over the UK half term, while it is also looking at moving workers to a three-day week due to financial pressures.

Tata Motors, the Indian owner of JLR, said in September that prolonged negotiations are affecting the company’s recovery. The business reported a loss of £210 million (€236 million) in Q2 2018 and warned the government that failing to secure a good deal with Europe would wipe billions off its value and seriously damage its operations.