Brexit: Ford warns no-deal would be ‘catastrophic’ and could cost thousands of UK jobs

US car giant tells Theresa May it is preparing alternative manufacturing sites abroad

Ben Chapman
Wednesday 13 February 2019 15:00
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Ford has said it will do “whatever is necessary” to protect its business in the face of no-deal Brexit as it ramps up plans to move UK manufacturing jobs overseas.

The US car giant employs 13,000 people in the UK including 5,000 in manufacturing roles at its Bridgend, Dagenham and Halewood plants and 3,000 at its research and development hub.

On Wednesday, Ford warned that crashing out of the EU with no trade deal would threaten the future of its UK operations.

“Such a situation would be catastrophic for the UK auto industry and Ford’s manufacturing operations in the country,” the company said in a statement.

“We will take whatever action is necessary to preserve the competitiveness of our European business.”

During a private conversation between business leaders and the prime minister this week Ford said it was preparing alternative sites abroad, The Times reported.

It is the latest in a string of dire warnings from Britain’s car industry and comes just days after Nissan U-turned on a decision to build its new X-Trail in Sunderland, opting for Japan instead.

Jaguar Land Rover (JLR) announced last month that it would slash 4,500 jobs as it makes radical cost savings in the face of plunging demand for diesel cars and a slowdown in China.

Ford had already warned last month that a no-deal Brexit would cost it $1bn (£775m). The company confirmed this month that 370 voluntary redundancies would take place at its Bridgend plant as part of measures to create a “sustainably profitable business” in Europe.

Despite being the UK’s best-selling car brand, Ford has struggled to consistently make a profit in Europe for years.

Vehicle makers support 850,000 UK jobs and have issued repeated warnings about the impact of Brexit. They are likely to be negatively affected by any form of Brexit that removes the UK from the customs union but will be hit particularly hard if no agreement is ratified before 29 March.

Investment in the British car industry fell by 50 per cent in 2018 as firms held back spending due to Brexit-related uncertainty. A precipitous decline in diesel sales caused by uncertainty about emissions regulations has also damaged the sector.

Last week, Toyota slashed its profit forecast for 2019 and warned that it will be impossible to avoid the harmful effects of a no-deal Brexit.

“We cannot avoid the negative impact no matter how much we prepare beforehand if Britain leaves the EU with no deal,” the firm’s senior managing officer Masayoshi Shirayanagi said.

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The industry’s trade body this month said nothing had changed since the 2016 referendum to reassure car manufacturers about the prospects of investing in Britain. And they are “beyond frustrated” with politicians.

UK car production fell 9.1 per cent to 1.52 million units in 2018, a five-year low for the sector.

With eight out of 10 cars exported, weak demand in many markets, including the eurozone, the UK and China has depressed production.

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