Honda Motor Co.'s announcement that it is pulling out of Britain serves as a major warning over the latter's withdrawal from the European Union (EU).
The Japanese automobile giant will end production at its sole factory of four-wheeled vehicles in Europe by the end of 2021.
There are apparently multiple reasons for the decision. Still, it is difficult to take Honda's explanation that the decision has nothing to do with Brexit at face value. Several months ago, an executive of a European unit of the carmaker expressed grave concerns about Britain's pullout from the EU without a deal saying, "The blow that the move will deal is beyond imagination."
The withdrawal will hurt Britain more than Honda. The automobile manufacturer currently makes roughly 160,000 vehicles annually mainly the compact car Civic, at its factory in Britain, which accounts for about 3 percent of cars that the company produces worldwide. However, the 160,000 units Honda manufactures account for approximately 10 percent of all vehicles made in Britain.
Honda can shift its production to another area relatively easily. However, it will be difficult for thousands of people, who will lose their jobs as a result of the pullout of Honda and other relevant businesses such as parts suppliers, to find new work.
There are obviously more companies beside Honda that are considering downsizing their operations in Britain or withdrawing from the country altogether. The potential impact Brexit will have is becoming clearer.
Prime Minister Theresa May and a Cabinet member in charge of private companies have expressed disappointment at Honda's decision, but such criticism is unreasonable.
The prospects for a post-withdrawal Britain remain unclear even though the end-of-March deadline for Britain's negotiations with the EU is drawing near. The ruling party remains split over the issue. In the eyes of global companies, a market whose situation several months later cannot be foreseen is not a promising destination for their investment. Companies that are deeply involved with Britain are disappointed with the uncertainty over its future.
Britain would feel regret for a long time unless it humbly listens to the alarms that are thundering out now. What the country will lose as a result of its withdrawal from the EU are not only jobs but also production methods, know-how on management and labor-management relations brought in by foreign companies. In other words, Brexit means that the country will abandon a wide diversity of sources of vitality.
Britain should consider why so many foreign companies have made investments in the country. It was attractive to these companies, particularly Japanese automakers, as a free entrance point to the massive EU market.
Britain should calmly think about what would happen if it were to lose this attractiveness. There is not much time left before the deadline for negotiations with the EU, but it is still not too late.