BUSINESSES and politicians have expressed their concerns as two North-East manufacturers in Honda's supply chain could be affected by the decision to close its only UK plant.

On Tuesday, Honda announced the closure of its Swindon plant, and the potential loss of up to 3,500 jobs.

The manufacturer said the plant would stay operational until 2021, however, concerns over its knock on effect in the region have grown.

Teesside-based, Nifco UK, which has a site in Eaglescliffe, near Stockton, and Elringklinger GB, which has a factory in Redcar, said they would be affected by the plants' closure.

The Northern Echo:

Andy McDowall who is 'disappointed' over Honda's decision

Andy McDowall, general manager at Nifco UK, said: "The confirmation that Honda intends to close its production plant in Swindon will have a bearing on our business.

"Trading conditions between Japanese and EU companies have changed because of the recent Economic Partnership Agreement, which has eliminated tariffs on car exports – Honda, unsurprisingly, is capitalising on this, it makes good business sense for them to do so.

"Honda has been a fundamental part of our product portfolio for many years – through the supply chain – we are disappointed that this UK-relationship will draw to a close."

Mr McDowall said Nifco would continue to support Honda until the plant closed, and said the company was working with new customers to minimise the impact on its workforce.

The Swindon plant currently produces the Honda Civic.

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The Honda Civic is made in Swindon, Wiltshire

Elringklinger GB said the announcement would have a "minor business impact," but agreed that the automative industry was challenged and hoped for a positive outcome.

Glen Pearson, general manager, said: "Elringklinger GB in Redcar is a valued supplier for Honda into their Swindon Plant – the recent announcement will have a minor business impact in 2021, affecting our sales plan but not the production volume through Redcar.

"The automotive industry today is a challenging time and this is another change where we can adapt. We have a strong and dedicated workforce in Redcar with many positive opportunities to deliver and continue our success."

However, that level of confidence has not been echoed by politicians.

Alex Cunningham, Labour MP for Stockton, said he feared that the closure could lead to a loss of jobs within his constituency as time progressed.

He said: "These must be very anxious times for people in the automotive trade and supply chain as manufacturers close plants and cancel plans for new models. I fear that if confidence in the market doesn’t pick up soon I fear hundreds of people, many of them in my constituency, could lose their jobs."

Whilst Anna Turley, MP for Redcar said Honda's plant closure would be felt across Teesside.

She said: “Honda's decision is a massive blow and will be felt not just in Swindon but across the country, including on Teesside where we have firms like Elringklinger supplying parts. This follows the Nissan announcement and is yet another worrying sign for the future of the UK's car industry which is one of our region's big success stories.

The MP said the government must do more to ensure the UK remained at the "forefront" of innovation in the car industry, whilst keeping jobs in Britain.

Keith Burge, managing director for Newcastle-based economic consultancy ERS, remained less confident overall.

He said: "Whilst automotive suppliers in the North East are mainly associated with Nissan, most of them supply other UK car plants, including Honda in Swindon. The announcement of the plant's closure will see job losses amongst some North-East suppliers in due course, but perhaps even more damaging is Honda's decision further undermining confidence amongst the parent companies of North-East suppliers. Their next investment decisions are more likely to favour factories inside the EU rather than outside it."

Honda did not blame Brexit for its decision to close the plant, instead the carmaker said it was part of restructuring within the company as it looked towards manufacturing electric vehicles.