One-third of car firms have cut jobs amid Brexit uncertainty
One in three car firms are cutting jobs and one in eight have divested from their UK businesses in a sign that Brexit is already causing damage to the sector.
A survey by the Society of Motor Manufacturers and Traders (SMMT) shows that almost 14% of companies in the industry, including manufacturers, components and services companies, have already relocated amid the continuing uncertainty over the UK’s departure from the EU.
The industry has been one of the most vocal regarding a no-deal Brexit, firing its first warning shots three years ago when Nissan sought reassurances from Theresa May. The survey comes just days after Nissan issued a fresh warning that its business model was “unsustainable” in the event of the UK crashing out without a deal.
Mike Hawes, the chief executive of SMMT, said: “As the Brexit clock ticks ever closer to midnight, this survey reveals the bleak future that awaits this vital sector in the event of no deal.
“Damage has already been done: investment is haemorrhaging, competitiveness being undermined, UK jobs cut and vast sums wasted on the impossibility of preparing for no deal. Make no mistake, every day no deal remains a possibility is another day of lost investment, another day that makes it harder to recover investor confidence in the UK.”
Nissan’s European chairman, Gianluca de Ficchy, said a 10% tariff on exports to the EU under World Trade Organization terms would put the “entire business model for Nissan Europe in jeopardy”.
It is the strongest warning yet from the Japanese car manufacturer, which employs 7,000 people at its Sunderland plant.
Hawes said it was not too late to repair the damage caused by three years of uncertainty.
The government must strike a deal with the EU that includes a transition period to enable a return to “business as usual”, and a long-term trading agreement that ensures “free and frictionless trade”, he said.
“UK jobs, innovation, trading strength and economic growth all depend on the automotive sector, so we urge all parties to get a good deal done before it is too late,” he said.
The SMMT survey shows that more than £500m has been spent on measures that will not deliver returns, rather than being invested in research and development, and that 80% say they believe leaving the EU without a deal will have negative consequences.
The industry is increasingly exasperated by government claims that the car sector is ready for no deal.
Last month, Jaguar Land Roverm (JLR), which employs more than 40,000 in the UK, announced it would halt production at British factories for a week in November, joining BMW and Toyota in staging a shutdown to mitigate potential disruption from a nodeal Brexit. Speaking a day after Mi
chael Gove said the automotive industry was ready for no deal, the JLR chief executive, Ralf Speth, said the company had no choice but to stop production lines at four facilities.
The concerns centre on disruption to the “just-in-time” flow of car parts underpinning an industry that employs more than 800,000 people in the UK.