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Daily Mail: Now BMW hints it will cut UK operations if there is a no-deal Brexit

Date: 23 06 2018

Now BMW hints it will cut UK operations if there is a no-deal Brexit… a day after Airbus threatened to axe 15,000 UK jobs

  • BMW boss has issued a warning about their future in the UK after Brexit
  • Politicians have accused firms of scaremongering to put pressure on Gov’t 
  • Comes after Airbus said it would ‘reconsider investments’ after a no-deal Brexit
  • Firm employs 14,000 in the UK but its supply chain supports 110,000 more jobs

BMW has followed Airbus’s warning about the consequences of its future in the UK following Brexit.   

The German car giant’s UK boss Ian Robertson says clarity is needed by the end of the summer. 

BMW makes the Mini and Rolls Royce and employs about 8,000 people in the UK. 

Ian Robertson, BMW’s special representative in the UK, said uncertainty was causing problems for the industry.

Politicians however have accused businesses such as BMW and Airbus as scaremongers who are putting pressure on the Government for a favourable Brexit deal.   

Airbus and BMW have been joined by other leading names in business to cast doubts over Britain’s exit from Europe.  

Juergen Maier, chief executive of the UK arm of German engineer Siemens, told the Financial Times executives were frustrated that with the second anniversary of the EU referendum today no one knew the final post-Brexit arrangements.

He told the paper companies like his would ‘take different investment decisions’ in a no-deal scenario. 

Meanwhile John Neill, chief executive of Unipart, a car parts supplier that employees 6,000 people in Britain warned: ‘The implications for the British economy are very, very severe and could result in busloads of jobs disappearing into Europe.’ 

And Tom Crotty, group director at petrochemicls group Ineos, said some companies were putting investment decisions on hold because of Brexit uncertainty. He told the FT: ‘the government is relatively paralysed. It is not good for the country.; 

But their comments have been dismissed by Eurosceptic MPs as ‘scaremongering’.    

Tory Remainers Greg Hands and Philip Hammond are understood to have been encouraging big companies to go public with their concerns about Brexit to strengthen their hand in the cabinet debate over future customers arrangements. 

Tory MP Peter Bone said: ‘It is just another part of Project Fear.

‘You couldn’t have a more politically motivated threat than this and I don’t believe for one minute that Airbus would move from the UK,’ Mr Bone told the Telegraph.

BMW boss Ian Robertson told the BBC: ‘If we don’t get clarity in the next couple of months, we have to start making those contingency plans – which means investing money in systems that we might not need, in warehouses that might not be usable in the future, in effectively making the UK automotive industry less competitive than it is in a very competitive world right now.’

The Government insisted the negotiations with Brussels were making ‘good progress’ and it was confident that a ‘no-deal scenario’ would not arise.   

But unions and opposition parties attacked the Government for the impact already being felt across industry from the lack of a deal.

Unite called on the Government to stop the ‘infighting’ and provide some certainty for British industry and millions of workers.

Prime Minister Theresa May has ruled out staying in the customs union. The UK is due to leave the EU on 29 March 2019. 

As Airbus unveiled its plans to pull out of Britain, it prompted a scramble from Downing Street to cool tensions and ease fears.

But the threat was dismissed by Brexiteers who derided the claims as a renewed ‘Project Fear’ aimed at undermining the mission to leave the EU.   

Tthe impact could go wider with an estimated 110,000 jobs at risk in companies supplying the European aircraft maker.

Airbus, which generates £1.7billion in tax revenues, said it would ‘reconsider its investments in the UK, and its long-term footprint in the country’ if Britain left the single market and customs union without a transition agreement. 

John Longworth, Co-Chair of Leave Means Leave said: ‘The latest scare story from Airbus screams of more Project Fear.

‘The French-run Airbus is a classic multi-national business that clearly doesn’t care about the UK as we embark on a new post-Brexit future, because it is intrinsically wrapped up in the EU and trying to undermine the UK Government’s negotiating position.

‘Airbus are claiming that they might relocate out of the UK because of uncertainty, but if we leave the customs union nothing will change as tariffs on aeronautical products are zero. They are also claiming that they may move production to countries outside the EU, which clearly can have nothing to do with Brexit.’ 

The PM’s spokesman played down the prospect of Airbus carrying out its plans today, saying she had already ‘listened to concerns’ from business and plans were making ‘good progress’. 

‘We are confident we are going to get a good deal, one that ensures trade is as free and frictionless as possible,’ the spokesman said.

‘We have made good progress – part of that work is listening to business.

‘What commercial companies choose to do in the public domain is down to them.’

The blunt statement from Airbus is one of the most significant interventions by a major company since the 2016 EU referendum.

It would make the firm the first big manufacturer to pull investment from the UK over fears about the stalled Brexit negotiations. 

Publishing a Brexit ‘risk assessment’ on its website, the firm also called on the Government to extend the planned transition period due to run until December 2020 if a deal is agreed, saying it was too short for the business to reorganise its supply chain.

If there was no extension it would ‘carefully monitor any new investments in the UK and refrain from extending the UK suppliers/partners base’, it said. 

Tory MP Stephen Crabb said the warning from Airbus should be a ‘wake-up call’. 

The former Secretary of State for Wales, who represents Preseli Pembrokeshire, tweeted: ‘The enormous Airbus factory in North Wales is one of the jewels in the crown of UK manufacturing. This is a wake-up call. A pragmatic, sensible Brexit that protects trade & jobs is vital.’

And Shadow Brexit Secretary Sir Keir Starmer tweeted: ‘If proof was needed that the PM’s Brexit red lines need to be abandoned (and fast), this is it.’ 

Tom Williams, the chief operating officer of Airbus Commercial Aircraft, said: ‘In any scenario, Brexit has severe negative consequences for the UK aerospace industry and Airbus in particular.

‘Therefore, immediate mitigation measures would need to be accelerated.

‘While Airbus understands that the political process must go on, as a responsible business we require immediate details on the pragmatic steps that should be taken to operate competitively.

‘Without these, Airbus believes that the impacts on our UK operations could be significant.

‘We have sought to highlight our concerns over the past 12 months, without success.

‘Far from Project Fear, this is a dawning reality for Airbus. Put simply, a no-deal scenario directly threatens Airbus’ future in the UK.’

In its risk assessment, Airbus says it is ‘getting increasingly concerned by the lack of progress on the Brexit process’.

It says it supports more than 110,000 jobs among 4,000 suppliers in the UK, with parts crossing the Channel ‘multiple times’.

This business relies on ‘frictionless trade’ under customs union and single market rules, it added, saying ‘any change in customs procedures, logistics and environmental standards would have major industrial and cost impact’.

It went on: ‘A no-deal Brexit must be avoided, as it would force Airbus to reconsider its footprint in the country, its investments in the UK and at large its dependency on the UK.

‘Given the ‘No-deal/hard Brexit’ uncertainties, the company’s dependence on and investment in the flagship Wing Of Tomorrow programme would also have to be revisited, and corresponding key competencies grown outside the UK.

‘This extremely negative outcome for Airbus would be catastrophic.

‘It would impair our ability to benefit from highly qualified British resources, it would also severely undermine UK efforts to keep a competitive and innovative aerospace industry, while developing high value jobs and competencies.’

The news was greeted by anger from Labour MPs.

Darren Jones, whose Bristol North West constituency contains Airbus’s Filton wing plant, attacked the Government for only listening to ‘hardline pro-Brexit MPs and not to the businesses that employ thousands of British workers, including Airbus’.

The People’s Vote supporter added: ‘Thousands of skilled, well-paid jobs are now on the line because of the shambolic mess the Government have created over the Brexit negotiations.’

Shadow Brexit Secretary Sir Keir Starmer hit out on Twitter, saying: ‘If proof was needed that the PM’s Brexit red lines need to be abandoned (and fast), this is it.’

And former shadow chancellor Chris Leslie wrote: ‘And we’re all supposed to go along with this Government’s disastrous #Brexit strategy?! Constituents in manufacturing & service sectors who jobs are at risk will be unforgiving of any more MP fence-sitting ‘constructive ambiguity’.’

Ben Bradshaw described it as ‘devastating news’, adding: ‘When are we going to wake up to the disaster of this Tory #BrexitShambles??’, while Chuka Umunna questioned: ‘What will it take for the establishments running Westminster to wake up!’

June 23rd, 2018: Daily Mail