Hard Brexit may put 860,000 jobs at risk

British car manufacturers have warned Theresa May there is “no Brexit dividend” for the business, with 860,000 jobs being put at risk unless the government shifts its red lines in negotiations.

The Society of Motor Manufacturers and Traders (SMMT) said investment in new models, equipment and facilities in the UK has slumped to 347 million pounds ($459 million) in the first half of this year, from 647.4 million pounds in the same period in 2017.

The car lobby has told the government that it needs “as a minimum” to remain in the customs union and a deal that delivers “single market benefits”.

More than 856,000 people are employed in the wider motor industry in Britain, 186,000 of which are on production lines, and the SMMT — whose members include big hitters such as Ford and Vauxhall — estimates that the sector is worth some 20 billion pounds to the UK economy.

SMMT Chief Executive Mike Hawes said: “The current position, with conflicting messages and red lines, goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership.”

The group chief added: “There is no credible plan B for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU.

“There is no Brexit dividend for our industry, particularly in what is an increasingly hostile and protectionist global trading environment. Our message to government is that until it can demonstrate exactly how a new model for customs and trade with the EU can replisold cate the benefits we currently enjoy, don’t change it.”

The UK sector had grown for the eighth successive year, with turnover at a record 82 billion pounds in 2017. The SMMT hinted that car companies including BMW, Honda and Nissan would have to move production elsewhere if the uncertainty around Brexit continued for much longer.

Meanwhile, carmakers have cut the prices of models in China, after the government slashed auto import tariffs to 15 percent from 25 percent, starting from July 1.

China cut the import tariffs as part of its opening-up approach aimed at strengthening a rule-based and multilateral global trade system. In contrast, US President Donald Trump recently threatened to impose a 20 percent tariff on all imports of EU-assembled cars, after his administration launched an investigation into whether auto imports posed a national security threat.

Chinese automobile executives expect a major reshuffling of their industry in the next five years, and say strong joint efforts among rivals will be required to keep many car manufacturers from being wiped out. The Chinese market of the near future will not be survivable for those automakers who fail to cope with the market’s new trends and demands, according to Li Shufu, chairman of Zhejiang Geely Holding.

The current position ... goes directly against the interests of the UK automotive sector ...” Mike Hawes, SMMT chief executive