Ford’s European boss has warned that a no-deal Brexit would prompt the firm to review its future in the UK.
Steven Armstrong told the BBC that failure to reach a deal for Britain’s departure from the EU, which could lead to the imposition of World Trade Organization rules and tariffs, would be “pretty disastrous” for British industry.
Brexit: what it means for the UK car industry
Ford currently makes engines at its plants in Dagenham and Bridgend, and transmissions at Halewood. Those units are shipped to other plants to be installed in chassis.
Trading under a WTO arrangement, which would involve tariffs on parts shipped between Britain and the EU, would “put a significant amount of cost in our business", said Armstrong. He added: “It would certainly make us think long and hard about our future investment strategy [in the UK].”
Armstrong also cautioned against a proposed Brexit arrangement based on the EU’s deal with Canada, which would allow for tariff-free trade but still involve border checks. Armstrong said that “would upset the just-in-time delivery model used by the company in Europe”.
Ford is currently understood to be considering a major restructuring of its business due to falling profits, with analysts at Morgan Stanley suggesting the firm could cut 24,000 jobs in Europe. That report was dismissed by Ford as "pure speculation".
Armstrong is the latest in a number of senior car industry executives to speak out against a possible no-deal Brexit. Jaguar Land Rover boss Ralf Speth has previously said fears over Brexit had already cost jobs, while Toyota has warned of disruption at its Burnaston plant.
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Rtfazeberdee
JIT
that will make sense if they rely on Just in Time and convenient if they are restructuring. Probably safer for them if they hit delays when delivering complete cars to buyers i.e. they've got paid and the buyer has to wait
Ski Kid
threaten a 30% to 50% duty on imported cars from the Eu
They would have to rethink on that and build in the UK again and support British Industry with the revenue
typos1
Ski Kid wrote:
The numbers dont add up, that sort of talk is a deluded pipe dream.
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Bar room lawyer
I. suspect a smokescreen.
The truth might also be that neither Jaguar Land Rover or Volvo buy Ford engines anymore, so with a substantial percentage of their business gone, they are probably going to end UK engine production anyway. I doubt that any Brexit deal will change that.
macaroni
Bar room lawyer wrote:
Probably true and not to mention the current decline in diesel sales (Dagenham) and forthcoming decline in petrol engines/gearboxes (Bridgend/Halewood) with the increase in electrification.
But hey ho...let's blame Brexit!
Symanski
Trust Brexit supporters or Business Leaders?
It amazes me how Brexit supporters seem to know more about running a successful business than the leaders of those businesses.
Just remember that we got the likes of the Nissan plant because we were in the EU and they needed somewhere to manufacture.
There is no better deal than the one we currently enjoy. The EU gives us free-trade and more importantly frictionless-trade. Nothing else compares.
typos1
Symanski wrote:
Its no use trying to win the argument with common sense and logic, they just dont understand, theyd cut off their right arms and kill their grandmothers to achieve their deluded goals.
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disco.stu
Symanski wrote:
True, but it's equally likely that Brexit is going to be a convenient excuse for large manufacturers to shift production to cheaper eastern European (or non-European) factories. Ford closed its last vehicle factory five years ago, moving Transit production from Southampton to Turkey – not an EU country – to save money.
Brexit simply gives the car manufacturers an excuse to blame someone else while they continue to shift production of cars from expensive countries to cheaper ones, as they've been doing for years. Why do you think JLR has really moved Discovery production to Bratislava, joining VW/Audi/Porsche/Bentley in building big, expensive SUVs there? It's not because of Brexit.
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