Nissan delays pay talks with UK workers until terms of Brexit made clearer

'Pay negotiations in our UK plant and technical centre will commence in 2019 when we have better clarity on the future business outlook,' carmaker says

Nissan built nearly a third of Britain's 1.67 million new cars last year at its Sunderland plant (Reuters)

Nissan has delayed pay talks with its UK workers until the government makes the terms of Brexit clearer.

The announcement comes after the latest delay in Brexit negotiations, as the EU demanded a second “backstop” arrangement to avoid a hard Irish border.

Nissan built nearly a third of Britain’s 1.67 million new cars last year at its Sunderland plant, and has issued warnings about the impact of a no-deal Brexit on its operations.

The Japanese vehicle maker was due to start negotiating a new two-year deal with employees this autumn but the talks have now been pushed back.

“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 spokesperson said.

The UK car industry is particularly vulnerable to potential trade barriers after Brexit because firms rely on hundreds of parts crossing from mainland Europe, meaning delays caused by additional checks or paperwork could be costly.

If the government doesn’t reach agreement with the EU before Brexit day, on 29 March, production in the UK risks being severely affected.

This month Nissan warned a hard Brexit would have “serious implications” for its Sunderland factory.

The company employs around 8,000 people in the UK, and announced in April it would shed hundreds of staff because of plummeting demand for diesel cars.

Sales of diesels are down almost 40 per cent in 12 months, thanks to confusion about their environmental impact.

Nissan said in 2016, 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.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders said in July, no carmaker is ready for Brexit.

Members are “increasingly concerned” about the prospects for the UK leaving the EU on World Trade Organisation terms, Mr Hawes said.