EU referendum: BMW warns staff in UK Rolls Royce factories of Brexit risks

Leaked letter praised by supporters of European Union, but dismissed by Vote Leave campaign group

The new Rolls-Royce Wraith Black Badge car on display at the Geneva Motor Show on Wednesday (Getty Images)

The heads of six British companies owned by German car giant BMW, including Rolls-Royce and Mini, have warned thousands of staff that jobs could be affected if the UK decides to leave the European Union, according to a report.

A letter to Rolls-Royce employees, which was leaked to the Guardian newspaper, warned trade tariffs could mean “higher costs and higher prices”. As a result, the firm’s “employment base could also be affected”, chief executive Torsten Muller-Otvos wrote. Similar letters were sent to other companies.

Supporters of the EU praised the firm for its “calm and sober statement of facts”, but the Vote Leave campaign group dismissed what it described as the “personal views of chief executives”.

In the letter, published in full below, Mr Muller-Otvos, chief executive of Rolls-Royce Motor Cars, wrote: “Free trade is important for international business. Rolls-Royce Motor Cars exports motor cars throughout the EU and imports a significant number of parts through the region.

“For BMW Group, more than half of Minis built and virtually all the engines and components made in the UK are exported to the EU, with over 150,000 new cars and many hundreds of thousands of parts imported from Europe each year.

“Tariff barriers would mean higher costs and higher prices and we cannot assume that the UK would be granted free trade with Europe from outside the EU.”

He also expressed concern about the ability of the firm to attract employees from outside the UK following a ‘Brexit’.

“Our employment base could also be affected, with skilled men and women from most EU countries included in the 30 nationalities currently represented at the home of Rolls-Royce here at Goodwood,” Mr Muller-Otvos said.

Nick Herbert, the chairman of the pro-EU Conservative In group, told the Guardian that his confidence was growing that the British public would vote to stay in the 28-nation bloc.

“The calm and sober statements of the facts by companies like Rolls-Royce remind us of the advantages of being in the single market,” he said.

“The more I hear things like this, the more sure I am that Britain will be better off remaining in a reformed EU.”

But Paul Stephenson, a spokesman for Vote Leave, said “personal views of chief executives” were not necessarily shared by the staff of their companies or their shareholders.

“Big foreign, multinational companies like the EU because they spend millions lobbying it in order to stitch up the rules in their favour – forcing smaller players out of business,” he said.

The BMW letter to Rolls Royce staff:

Dear colleagues,

As the debate around the referendum to decide the future of the UK's European Union membership increases, it is an appropriate time to outline the Rolls-Royce Motor Cars and BMW Group position.

The decision on whether to stay in the EU or not is for British voters to decide on in June. However, as a wholly-owned BMW Group company, it is important for all Rolls-Royce Motor Cars employees to understand the view of our parent company.

The BMW Group believes that the UK is better as a member of the EU than it would be outside it. You will see in the media this week an open letter supporting the campaign to stay in the EU, signed by around 200 business leaders, including Member of the AG Board, Ian Robertson.

Free trade is important for international business. Rolls-Royce Motor Cars exports motor cars throughout the EU and imports a significant number of parts through the region.

For BMW Group, more than half of MINIs built and virtually all the engines and components made in the UK are exported to the EU, with over 150,000 new cars and many hundreds of thousands of parts imported from Europe each year.

Tariff barriers would mean higher costs and higher prices and we cannot assume that the UK would be granted free trade with Europe from outside the EU.

When it comes to regulation, whether the UK remains inside the EU or leaves it, with Europe as the UK's largest export market by far, we would have to abide by European rules and regulations in any case.

We believe it's much better to be sat at the table when regulations are set and have a hand in their creation, rather than simply having to accept them.

Finally, we get a significant benefit from the easy movement of our people between the UK and Europe. This allows the rapid transfer of expert knowledge throughout the Rolls-Royce Motor Cars and BMW Group networks, building the skill level of our UK workforce.

Our employment base could also be affected, with skilled men and women from most EU countries included in the 30 nationalities currently represented at the Home of Rolls-Royce here at Goodwood.

The debate around this subject will undoubtedly continue to build as we near the UK referendum on 23 June 2016.