No deal Brexit is a 'disaster' for UK car industry, warns Ford

Ford's European chief and car industry experts raise concerns about the impact of a hard border and tariffs on the UK motor industry

Shafi Musaddique
Wednesday 29 November 2017 14:09
Ford currently benefits from seamless supply chains without any borders or tariffs imposed across EU countries
Ford currently benefits from seamless supply chains without any borders or tariffs imposed across EU countries

The UK Government has been warned by car giant Ford that failure to secure a final Brexit deal with the EU threatens Britain’s motor industry.

“No deal would be a disaster really not only for my business but for the industry in general,” said Steven Armstrong, Ford’s president for Europe, Middle East and Africa operations.

“I am very concerned, very worried. It’s important that we see a future in the UK that’s competitive.”

Speaking to Channel 4, Mr Armstrong said he currently spends up to 4-5 hours a week in Brexit-related meetings.

“We spent 40 years putting a supply chain together that uses the open European market,” said Mr Armstrong.

“If we have a hard border of some description, even without tariffs, we would have the potential for goods to stop at a customs border. That means less productivity and more costs to the business.”

Ford can currently make a car from scratch in three and a half hours thanks to tariff free trade, but an end to seamless production could cost the carmaker dearly.

Ford bosses have privately calculated that a no-deal Brexit could cost Ford as much as $1bn in tariffs, according to Channel 4.

Ford’s European chief also said that Brexit undermined future investment in the UK but said it was “too early” to suggest British production lines would shut.

Production for Ford’s cars start out life in their Dagenham-based warehouse where engine components are collected and assembled together from a number of mainland European warehouses.

From there, car engines make their way to Germany to meet assembly lines in Cologne, where the finishing touches are made before they return to be sold in the UK, Ford’s third biggest market.

Senior figures within the motor industry on Tuesday joined Ford in voicing their concerns about the Government’s approach to Brexit.

President for the Society of Motor Manufacturers and Traders (SMMT) Tony Walker called for progress on a transition period for Brexit and said frictionless trade could not be replaced with a better alternative.

“We need to see concrete progress – and quickly,” said Mr Walker.

“We ask government to help provide the conditions in which we can compete. Like every other industry, we need certainty now.”

A no-deal Brexit could see Britain revert to World Trade Organisation tariffs and customs checks, which the SMMT said would add costs of at least £4.5bn to the motor industry.

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