Ministers are reportedly considering pulling a multi-million pound support package for Nissan after it scrapped plans to build its X-Trail model in the UK.
Staff at the car maker’s Sunderland plant are due to meet union officials on Monday after Sky News broke the story that Nissan will make the SUV in Japan rather than in the North East as previously planned.
The firm’s Europe division boss later wrote to staff confirming the news, saying uncertainty over Brexit was “not helping companies like ours”.
The government is now considering withdrawing what The Times reports is a £60m package of support for Nissan after being given less than 24 hours’ notice of the firm’s decision.
It comes after Business Secretary Greg Clark was told by the car giant that the switch of production from Sunderland to Japan was “not negotiable”, according to the newspaper.
Nissan had pledged – four months after the 2016 referendum – to manufacture the new SUV model in the UK as well as the Qashqai, a move seen as a major vote of confidence in the country’s manufacturing outside the EU.
But its U-turn casts doubt over Nissan’s future investment in the UK, and stokes debate about the future of British car manufacturing less than eight weeks before the UK’s planned Brexit date.
Many Remain supporters said the withdrawal was a worrying indicator of Brexit having a corrosive impact on the British economy.
Liberal Democrat leader Sir Vince Cable said Nissan’s decision showed that big companies were “very seriously reconsidering their future here”.
“I’m afraid that where Nissan leads the others, Toyota, Honda, BMW, the rest of them, we’re going to see a down-scaling of their operations in the UK,” he said.
Meanwhile, shadow Brexit secretary Sir Keir Starmer said the withdrawal represented a “serious blow to the communities that depend on the jobs Nissan creates and supports”.
Nissan employs roughly 7,000 people in Sunderland, and was thrust into the heart of the Brexit debate in 2016 when it received a letter from government ministers offering undisclosed reassurances about the company’s future competitiveness.