Sunday, May 22, 2022

Ford U-turn: no-deal Brexit could force carmaker to reconsider UK plans | Business

The US carmaker Ford has described a no-deal Brexit as a “red line” that would force it to reconsider the scale of its presence in Britain in a dramatic reversal of an earlier commitment to stay put.

Ford issued the warning on the same day as the pharmaceuticals company AstraZeneca and the carmaker Nissan said the prospect of a hard Brexit was already disrupting their businesses.

The interventions, from firms employing nearly 30,000 people between them in the UK, offered a timely reminder of the anxiety within British industry as Theresa May revealed that talks with Brussels had reached an impasse over arrangements for the border in Northern Ireland.

Ford’s European boss, Steven Armstrong, said: “For Ford, a hard Brexit is a red line. It could severely damage the UK’s competitiveness and result in a significant threat to much of the auto industry, including our own UK manufacturing operations.”

The US auto firm employs 14,000 people in the UK, including 3,000 making engines in Dagenham in Essex and 1,950 at a plant in Bridgend, south Wales.

“While we think this is a worst-case scenario and that a UK-EU deal will be reached, we will take whatever action is necessary to protect our business in the event of a hard Brexit,” Armstrong told the BBC.

He rubbished the Canada-style trade deal championed by Brexiters such as Jacob Rees-Mogg, saying existing arrangements between the EU and Canada involved time-consuming customs and border checks. “If this was introduced for all UK-EU trade, the level of congestion and blockages at the ports would undermine our just-in-time manufacturing system,” he said.

Armstrong’s comments, a change of stance from Ford’s vow in April to remain in the UK whatever the outcome of Brexit talks, echo similar sentiments among carmakers such as Toyota, Jaguar Land Rover and BMW.

Nissan, which has previously warned of “serious implications” from a no-deal scenario, said on Monday that it had postponed pay talks with staff until it knew more about the Brexit deal.

The firm, which employs about 8,000 people in the UK, was due to begin thrashing out a two-year wage deal this autumn. “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,” said a spokesperson.

Nissan built nearly one in three of Britain’s 1.67m new cars last year at its Sunderland plant.

Drugmaker AstraZeneca’s chairman said it had put investment in manufacturing on hold owing to confusion about the ease with which medicines will be able to flow between the UK and the European Union.

In an interview with the French newspaper Le Monde, Leif Johansson said preparations for Brexit, which include stockpiling medicines and spending £40m to build laboratories outside the UK, were distracting the company from day-to-day business.

He confirmed plans revealed by the Cambridge-based company last year to suspend investment in manufacturing in the UK. “If a transition deal does not make clear what will happen in the future, we will maintain our decision not to invest,” he said.

The postponement is because of concern that gridlock in cross-border movement of medicines will reduce sales to the continent, limiting the need for more manufacturing capacity at its plant in Macclesfield, Cheshire.

AstraZeneca has a team of 30 people, out of a 7,000-strong UK workforce, dedicated exclusively to Brexit preparations. “I spend between a fifth and a quarter of my time on it,” Johansson said. “It is very rare that we have a board meeting that does not mention it.

“In business, we are often forced to act amid uncertainty, this kind of thing happens. But the frustrating thing is to do it while what currently exists works very well. It costs us money and it does not bring us any benefit.”


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