Ford warns no-deal Brexit will force it to reconsider UK presence

Disorderly departure 'would be a disaster for the automotive industry in the UK and within that of course I count Ford Motor Company,' says company's Europe Chairman

Ben Chapman
Tuesday 02 April 2019 16:43 BST
What does a no-deal Brexit mean?

Ford has warned it will reconsider its UK investments if MPs cannot agree a Brexit deal that guarantees a smooth departure from the EU.

The US car manufacturer’s Europe Chairman Steven Armstrong warned of the potentially disastrous effects of a no-deal Brexit on Ford and the wider industry.

Such a scenario would mean Ford “will have to consider seriously the long-term future of our investments in the country,” Mr Armstrong told The Associated Press.

“We've been very consistent since the referendum that a hard Brexit, a no-deal Brexit, would be a disaster for the automotive industry in the UK and within that of course I count Ford Motor Company,” Mr Armstrong told the news agency

“So anything that puts tariffs or friction at the borders in place would be a significant inhibitor to our business. We've been very clear in saying that could cost us up to a billion dollars a year.”

The latest stark warning from Britain’s car industry came after MPs again failed to agree on a way forward for the Brexit process, voting down a series of alternatives to the prime minister’s deal.

Mr Armstrong said Ford ahd spent tens of millions of dollars preparing for a no-deal Brexit. “The best case for me would be that that money is actually wasted because we actually reach a deal,” Armstrong said.

“So I would encourage all parties concerned to figure out how to get us to a deal that guarantees frictionless trade because otherwise we will have to consider seriously the long-term future of our investments in the country.”

The company has already laid out plans to cut thousands of jobs across Europe, including the UK, as it tries to boost profitability in a region where it has underperformed for years. The bulk of the redundancies are expected to affect Germany

“Brexit is not the reason for that, but it clearly is another factor that if we were to get a hard Brexit we would have to think seriously about what further steps we'd have to take,” Mr Armstrong said.

Last week the industry trade body said car production in the UK fell by 15.3 per cent in the year to February, the ninth consecutive month of falls. Manufacturers built 123,203 cars in the UK over 12 months, down from 145,518 a year ago, the Society of Motor Manufacturers and Traders (SMMT) said.

Declining demand in the UK and in key European and Asian export markets has hit carmakers hard, while continued uncertainty around Brexit is hurting investment in the sector.

Mike Hawes, SMMT chief executive, said the figures should provide additional impetus for MPs to avert a hard Brexit.

“The ninth month of decline for UK car production should be a wake-up call for anyone who thinks this industry, already challenged by international trade hostilities, declining markets and technological disruption, could survive a ‘no deal’ Brexit without serious damage,” he said.

“A managed no deal is a fantasy.

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