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The Threat of a no-deal Brexit is the Source of Widespread Concern Across UK Industries

Japan warns against No-Deal

The Threat of a no-deal Brexit is the Source of Widespread Concern Across UK Industries

Japan warns that Theresa May’s successor must avoid a no-deal Brexit

Businesses located in and working within Britain could move out if the next Prime Minister drags the UK out of the bloc without a deal, warns Japan’s foreign minister, Taro Kono.

The Japanese foreign minister has beseeched the frontrunners for the number 10 spot to avoid a no-deal Brexit on October 31st because Japanese firms working in the UK are most likely to move elsewhere in Europe should Britain withdraw from the EU without a deal.

Mr. Kono told the BBC’s Today Programme that: “There are a few Japanese automotive manufacturers and operations in the United Kingdom, and some parts are coming from Europe and right now they have very smooth operations. Their stock for each part is only for a few hours, but if there is a no-deal Brexit and if they have to go through actual custom inspection physically then those operations may not be able to continue. Many companies are worried about the implications because they don’t know what is going to happen, they don’t know what happens legally or physically. So, some companies have already started moving their operations to other places in Europe. We do not want to disrupt the economic relationship with the UK so, we have been asking the UK’s Government to let the Japanese companies know what they can expect and things should happen smoothly without any disruption.”

The two frontrunners for the Prime Minister role, Boris Johnson and Jeremy Hunt have claimed that they would be willing and ready to leave the European Union on no-deal Brexit terms by the end of October. Mr. Kono underlined the possible damage and repercussions that could ensue from a no-deal Brexit, that could impact the Japanese car manufacturers operating in Britain.

PSA Group says it could produce its latest Vauxhall Astra model in Britain on the condition that a no-deal Brexit is sidestepped.

The French car company PSA Group has pointed out that it could make its Vauxhall Astra at the plant in Ellesmere Port if a no-deal Brexit is evaded. Frankly, this warning comes as an array of car companies voiced their concerns and disapproval of the prospects of a no-deal Brexit.

The Vauxhall Astra is PSA Group’s most successful model and is set to be manufactured in Germany and the UK if a disruptive no-deal Brexit is kept off the negotiating table.

The trade association for the UK’s car industry, SMMT (The Society of Motor Manufacturers and Traders) published a report on the 27th of June 2019, which outlined the following key findings:

  • Last month British car production figures fell by more than 15 percent with more than 21 thousand less unites made in May.
  • 80 percent of all cars produced in the UK are exported overseas which highlights the crucial role that free trade agreements with the EU play in the manufacturing and selling process within the UK’s car sector.
  • General production levels have plummeted for four consecutive quarters dropping by minus 20 percent since the beginning of 2019.

‘In the month, manufacturing for domestic buyers fell by -25.9%, while overseas orders were down -12.6%. Exports accounted for 80.9% of all cars made, reemphasizing the importance of maintaining free and frictionless trade. In the year to date, UK car production is down -21.0% with 557,295 new models rolling off production lines – almost 150,000 fewer compared with the same point in 2018. This is due, to a certain extent, to the decision by some manufacturers to bring forward summer shutdowns to April in anticipation of the expected March date for the UK to leave the EU.’

Taken from SMMT’s website.

SMMT’s CEO, Mike Hawes commented on the report’s gloomy findings saying:

‘12 consecutive months of decline for UK car manufacturing is a serious concern and underlines yet again the importance of securing a Brexit deal quickly. The sector is facing multiple seismic challenges simultaneously: technological, environmental and economic. The ongoing political instability and uncertainty over our future overseas trade relationships, most notably with Europe, is not helping and, while the industry’s fundamentals remain strong, a brighter future is only possible if we secure a deal that can help us regain our reputation as an attractive location for automotive investment. No deal is not an option.’

The UK’s damaged car industry is in dire need of resuscitation and PSA Group’s plans to build its Vauxhall Astra model in its Ellesmere Port manufacturing plant would be a great pillar of support for thousands of jobs and the growth of the economy. However, this depends on whether the UK leaves the EU with or without a deal.

In an interview with TalkRadio’s political editor, Ross Kempsell, Boris Johnson said:

“We will be pushing our plan for Brexit into action and getting ready to come out of the EU on October the 31st come what may. I think that the best way to come out is with a standstill between the UK and the EU so that we keep going with the existing arrangements until such a time as we’ve completed our free trade agreement and we use that period to solve the questions of the Northern Irish border. For three years we’ve been sitting around wrapped in defeatism, telling the British public that they can’t do this or that. It is pathetic.”

Click here to watch the full interview.

Unite the Union also voiced its concerns regarding the risk that no-deal Brexit poses of erasing any prospects of a prosperous future for the PSA Group’s Ellesmere Port plant. Mick Chalmer, the regional coordinating officer at Unite the Union said:

“Unite has been in positive discussions with PSA about a new vehicle agreement and securing new models for Vauxhall’s Ellesmere Port plant. A no-deal Brexit will destroy all of that along with the hope of securing the plant’s long-term future.”

“It is imperative for the future of the thousands of people who depend on Vauxhall Ellesmere Port that a no-deal Brexit is taken off the table and a deal reached with the European Union that secures frictionless trade and tariff free access.”

“This will then allow PSA to commit to allocate the new Astra to Ellesmere Port and for Unite to put the new vehicle agreement to our members for ratification.”

Click here to read the full article.

The new model is scheduled to be manufactured in 2021 which could guarantee the creation of electric vehicles in Britain, as climate change concerns increase and car companies are researching innovative ways to move away from the internal combustion engine, the PSA Group’s production plant could give the UK’s car industry a boost.