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Last Updated: Thursday, 24 May 2007, 15:47 GMT 16:47 UK
UK euro stance problem for Honda
Takeo Fukui, president and chief executive of Honda Motor Co
Takeo Fukui says the UK's "reluctance to join the euro is a big problem"
The chief executive of Honda says the UK's decision not to swap the pound for the euro has made car manufacturing in Britain more difficult.

"We made a mistake," Takeo Fukui told the Financial Times. "We thought the UK was in Europe but its reluctance to join the euro is a big problem."

Honda's Swindon facility covers 370 acres and employs 5,000 people.

Mr Fukui says Honda has "no plans to expand, though we may change our minds if Britain were to join the euro".

Not alone

Honda is not the only manufacturer to have criticised the UK's decision not to adopt the euro.

Japanese rival Nissan has also said in the past that retaining the pound threatens jobs at its Sunderland plant.

However, Honda said that jobs were not under threat at Swindon, which it would continue to operate as a European centre of excellence.

A spokesman for Honda said that the Swindon plant would be operating at full capacity by October having recently recruited an extra 700 workers.

Referring to an article in the Financial Times that claimed Honda was not planning any big investment projects at Swindon, the spokesman said that there was no room to expand the plant even if the company wanted to.

Using a UK plant to build cars for Western European consumers exposes Honda to additional currency volatility as the value of the pound moves against the euro.

The car maker is currently expanding its Turkish plant to help supply continental Europe, because while there are still currency issues, costs are lower.

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