Blog : Is the British Motor Industry on the precipice?

Carole Nash Classic Insurance Specialists

Ian Nicholls

Mini

The news that the nation is to vote on 23 June as to whether to remain a member of the European Union could be another turning point in the history of the British Motor Industry – one that could result in its final extinction after a strong revival from the depths of the early 1980s.

Those who have read my article, The Decline of BMC – The European Dimension, will have no doubt where my vote will go. For all its faults, and there are many, I will vote to stay in. Remember, Britain joined the Common Market primarily in order to sell its wares in a large single market.

Prior to January 1973, British car exports to the Common Market were subject to a 17.5 per cent trade tariff, which rendered them hopelessly price uncompetitive with other European manufacturers. My fear is that, unless Britain can negotiate favourable terms,  an exit from the European Union will result in a return to the pre-1973 situation, and Britain is now a net exporter of cars.

Remember, Nissan, Honda, Toyota, BMW, General Motors and others set up manufacturing facilities in Britain in order to export to the larger EU market. They would not be investing millions just to concentrate on the relatively paltry UK car market. An exit from the EU could put all this in danger, and the big multi-nationals might have to relocate their European manufacturing facilities to within the EU, resulting in mass de-industrialisation in Britain – that’s a horrifying thought.

Much of the press has already backed the exit campaign, assuming their readers are Little Englanders, to whom the British Empire still exists. Other ‘No’ campaigners will focus on the return of powers from Brussels that an EU exit would bring. The loss of constitutional powers from Westminster to Brussels was at the heart of the ‘No’ campaign in the 1975 referendum and, to some degree, the fears of people like the late Tony Benn have been borne out, but the issue that will affect most ordinary people in this country is one of trade, whether we realise it or not.

During the past four decades Britain has transformed itself from the chaotic near-socialist state of 1974-76 to an entrepreneurial trading nation, leaving its 1970s image as the ‘sick man of Europe’ way behind. British goods have now regained their image for quality and reliability. On 23 June 2016 Britons could vote to make UK goods price uncompetitive in the majority of Europe, resulting in a dramatic re-adjustment in British society and a traumatic effect on employment.

One prominent opponent of the EU has claimed that membership costs Britain £55 million per day. However, if Britain leaves the EU, that £55 million might end up being redirected to the Department of Work and Pensions to pay for the upkeep of people whose former employers have relocated to countries that remain EU members – no doubt many motor industry employees would be amongst them.

This article will almost certainly attract some harsh criticism, but we must vote with our heads, not our hearts.

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86 Comments

  1. Ian, you have in one swift move, made up my mind very firmly. I’m with you and will vote to stay in. As you rightly point out, the key issue is TRADE. The thought of the UK becoming uncompetitive in Europe and foreign firms withdrawing from UK manufacture is nothing short of alarming.

    Thank you, Ian !!

  2. And yet at least two of the key manufacturers have committed to staying in Britain in the event of an exit. Being free from the shackles of the EU will allow the UK to offer greater incentives to manufacture cars and components here.

    Being outside of the EU has not harmed Turkey’s rise in car manufacturing, with Ford and Toyota moving more production there.

  3. “Being outside of the EU has not harmed Turkey’s rise in car manufacturing, with Ford and Toyota moving more production there.”

    The average wage in Turkey is less than 40% of the UK.

    Is that relevant ? Any additional EU import tariffs are more than cancelled out.

  4. Ian, I think you have summed up the problem with this debate well – using the derogatory term “Little Englanders” to sum up all in favour of leaving. Is there an equivalent playground name for those who want to stay in? Methinks that using a bigoted term to taint those you considered bigoted sees thee hoist with thine own petard! As long as the debate is conducted at such a low level, no one will get any sensible answers..

    I loath the idea of dividing people, the world would be a better place if we were all one nation of humanity but I also recognise the EU is an undemocratic mess, an inefficient self-serving monster and an economic time-bomb that the wealthier few members will be obliged to support, with critical consequences for all members’ future economic prospects. Perhaps we would be more help to reviving the fortunes of those trapped in a sunk EU as an outside investor, rather than foolhardily going down with it?

    On the other hand, how long is it since any British Government succeeded in doing the best for the British masses? Would increased independence bring greater fairness to blighty? I doubt it!

    I’d like to stay in a reformed EU, shame that’s not what’s on offer in the coming referendum, however Cameron frames it.

  5. As part of the EU, Britain is completely powerless to negotiate it’s own Trade agreements with anyone. We rely on the EU Bloc for such deals which may or may not be the best ones The EU is made of nations with vastly different wealths and standards of living. The countries that have benefitted the most from EU trade arrangements have been the poorest as they are countries in which businesses choose to locate as they get all the benefits of the EU and cheap costs. We are fundamentally unable to compete with these types of arrangements , even with countries who are also members. There is a considerable trade deficit, that is the the EU sells much more to us than we do the them, this puts us in a very strong position.

    Are the Germans seriously going to wish to make it difficult to sell their cars in the UK? Are the French, for all their talk and rhetoric, going to wish any harm comes to their sizeable experts of wine, cheese and cars to the UK? Absolutely not! This is why all the scare stories of Britain being sidelined is rubbish. We account for a substantial number of EU population, a highly developed consumer market and we are a prize for any nation to sell its wares to. Even the IN people don’t really want to be in, they begrudingly say we should be in but that we’d rather ensure we weren’t ever really in fully. This makes no sense, because whether we are all the way in or just dipping our toes, we will never really be in control of our own destiny.

    And as much as I am a car fan, and a UK manufacturing supporter, I am not going to commit this great Nation to an irreversible IN vote simply so that foreign-owned manufacturers will kindly build their cars here. How many decades of car manufacturing do we think are left without some serious changes culturally? Do we want to commit future generations to the EU just so we can build cars?

  6. Ian, there’s no need to worry. The entire British establishment including all the broadcast media and a good chunk of print is behind staying in. It’s like a fight between a gorilla and a squirrel. Even if by some miracle the ‘out’ campaign won the vote, as with all EU referendums, there would quickly be some resignations and conferences, and the public would be made to vote again, soon after, and reach the ‘correct’ result this time!

  7. I think Ian Nicholls has missed the point completely. Most people were in 1975, and still are , in favour of a free trade area. That was the proposition which was sold in 1975.

    However, few people are in favour of our sovereignty being abandoned to unelected, unintelligent and unscrupulous bureaucrats in Brussels, or is it Strasbourg, just so that a largely illusory free trade advantage can be obtained, and that is what, little by little, has happened over the last 40 years. If the Camoron (sic) deal had been to alter the treaty to make its terms correspond with those which prevailed in 1975, I would have voted now, as I did in 1975, for remaining within what was then the EEC. Now, my position is unequivocal – I shall vote to leave

    Just to sound an even nastier note: we did not waste in all about 1.5 million British lives in two world wars to prevent German hegemony, only to have it obtained by stealth.

  8. Here Here to all of this. I sincerely hope we do the right thing and not pander to crass populism by the “establishment”, and the right-wing press.

  9. Make no mistake, there are important reasons why car manufacturers have invested in the UK (and will continue to):

    1. By north European standards, we are a low-wage economy. Cost of labour is a major part of the cost of production, and the UK is cheap.

    2. The UK has some of the weakest employment protection laws in the western world. This is why Ford closed Dagenham and Southampton, rather than less productive European plants. The ability to do this makes the UK an attractive place for investors.

    3. The UK has very weak unions. Compared to especially the Germans, our unions are complete pussies. This means pay and conditions (particularly holidays and health arrangements) are cheaper here, and our UK workforce is very compliant in matters such as workplace flexibility, short-time working, and lay-offs.

  10. Though Britain joining the EEC in 1963 (perhaps slightly before) might have saved BMC from its financial troubles, if the previous article is anything to go by.

    Do agree with others here that Britain would be better off out as not only do the costs outweigh any perceived benefits of staying (whether that actually happens without being made to re-vote until the “correct” final result is made like the Irish is another matter), but remaining also places Britain at great risk of being hit by the fallout from the problems much of Europe is currently facing.

  11. Ian, an excellent post. Working for a major (non-automotive) manufacturer here in the UK, I can confirm we are having off-the-record projects planning for potential Brexit, and the results are not pretty. We will be keeping a presence in the UK, but it will be significantly smaller. Pro-out campaigners say “the dangers of leaving the EU are just scaremongering” and “we can thrive outside the EU” – and maybe long term we can (I’m no economist!). But every guidance we have been given is that in the short term (5-10 years) our company HAS to move to the EU to survive.

    Guess that’s just tough luck on all the UK employees, tax revenue, UK future etc., etc., etc.

  12. “During the past four decades Britain has transformed itself from the chaotic near-socialist state of 1974-76 to an entrepreneurial trading nation, leaving its 1970s image as the ‘sick man of Europe’ way behind. British goods have now regained their image for quality and reliability. On 23 June 2016 Britons could vote to make UK goods price uncompetitive in the majority of Europe, resulting in a dramatic re-adjustment in British society and a traumatic effect on employment.”

    If our manufacturing is so good and quality so high, why do we have the world’s second largest trade deficit? In fact the UK trade position was far better in 1974-76 than it is now, and that was before North Sea oil boosted the figures.

    The idea that the 80’s and Thatcher fixed the British economy is a myth. The economy is kept afloat by housing bubbles and easy access to credit. We are borrowing from future growth.

    The big problem was never the unions, but short termist British management and owners. British companies never invested enough in R&D and manufacturing. It meant British companies making dated products, on worn out tooling. Even if there had been zero strikes in the 70’s, British industry would have failed.

    The reason for the success of the British car industry recently, is because we don’t own it. Take JLR, it has benefited from long term investment which it would never have got under inept British ownership.

    I agree that leaving the EU would be a disaster for the British car industry and Britain in general. Not only would we lose EU markets, but I fear our destructive short termism would get worse.

    • You’re right about why our industry collapsed. I’ve been lucky enough to spend my entire working life in the car industry. I’ve been even more lucky to spend several years working in the Far East, Europe, and North America. The only notable difference? Their management and planning are far and away better.

      On the EU….only about 15% of our exports go to the EU. They sell us far more that they buy. In any kind of tariff war, the EU stand to lose far more than it could ever win.

  13. It is clear that Bartelbe was not around in the 1970s . Either that, or he was blind to what was happening with unions . I suspect he is not in Britain now, either .

    • I wasn’t around in the 1970’s, not being born being the issue. However it is very easy to debunk the myth that the unions are solely responsible for British industrial decline. British industry started to decline in the later 19th century. You can read accounts from the 1890’s lamenting the fact that most electrical equipment was imported from the States and Germany.

      As early as the 1890’s our industry was concentrated in low tech sectors like the cotton mills, and coal mining. Instead of the new hi-tech electrical and chemical industries.

      The unions didn’t help in the 70’s, but the British car industry had far deeper problems than the unions. Worn out tooling, cars that weren’t properly costed, poor designs and woeful market understanding.

      If unions are so bad, why is the German car industry with strong unions, more successful than ours?

      If Thatcher saved British industry, why do we have the world’s second largest trade deficit, larger than the 70’s, despite the fact we have North sea oil now?

  14. The referendum is a sticking point and both sides have valid arguments however both have weaknesses.

    If we voted to leave, we are very likely to sign a trade agreement very much in the vain that Norway and Switzerland have done, therefore having unrestricted access to the EU markets. We will also be free to trade with other countries and set up trade deals with them without EU interference, and so jobs would be lost according to the no campaign). Also their argument states that we would regain the powers that we have lost to Brussels, including the legal system, employment legislation and the power of controlling borders and immigration and reduce the burden on the tax payers by not subsidising the EU administration and the poorer nations.

    Fair dues, however what they forget to mention is that to still have access to the EU markets, you have to pay a surcharge to the EU and give free access to borders. This means we will still be subsidising the EU, but without a say on where it goes, and still have no control over our borders. The alternative is not to sign a trade deal, therefore putting many jobs at risk as many multi nationals (and British) firms will look to move to within the EU to avoid the import costs. The argument that Ford has moved it’s production to Turkey is valid, however in truth they have gambled that the costs saved in wages will cover the import tariffs charged by the EU, and that Turkey will become a member in the near future. They did the same when they weighed up closing Dagenham – it was cheaper to close a British factory than it was one in Germany, Spain or Belgium. Ford also get reductions on the import charges as many parts for vehicles assembled in Turkey are still made in the EU.

    The issue over legislation regarding business is also a bone of the No campaign. SME business’ are supposedly hit hard by this legislation, but much of it is there to protect workers and the environment. Would this be shooting ourselves in the foot? Also the European Court of Justice is supposedly stopping us from managing our own legal system, however it was Britain who drew up many of it’s guides and framework. Is this more to do with the structure and that it needs modernising in a new Europe?

    The Yes campaign also has weaknesses. If we stay in Europe, we will still be financing the biggest bureaucratic mess in he world. One of David Cameron’s demands should have been for the complete overhaul of the both the EU parliament and commission which eats money without delivering (it makes our government look like a value supermarket). However Cameron has pandered to his own party and has not got us the best deal, instead getting the quickest fix he can so he can have a referendum as soon as. The issues regarding benefits have not been answered – there’s a seven year window but what after that? Our benefit system is creaking and needs overhauling, and unlike 15 years ago when a French person got his unemployment benefit from the French state in Britain, we now pay the person our benefit. How can this work? Monies do not exchange between governments as previously, so any foreign worker unemployed is paid for by the British Tax payer.

    There are many more arguments against both Yes and No campaigns – I will however be voting Yes, as although I agree with many of the No campaigns arguments the threat to the economy is great and I for one do not want to see this country return to the disasters of the 1970s.

  15. Relevant questions are:

    Wouldn’t the re-imposition of a 17.5% Tariff (or similar) contravene Article 8 of the Lisbon Treaty?

    What % of cars made in the UK are exported to EU member countries? Has this % been increasing or decreasing over the last 10 years?

  16. Turkey IS relevant to the potential situation.

    In reality there’s no chance of them joining the EU for a LONG time, but at the same time politically the EU can’t afford to be bolshy with them, hence Ford happily importing Transits into Europe from there (powered by Dagenham made diesels!)

    Similarly, if BREXIT happened, then some sort of trade agreement would have to be agreed between the UK and the EU, both parties need this in place.

  17. I’m old enough to have voted in both prior referendums and feel betrayed by the continual erosion of the UK’s ability to govern itself – this was never what we voted on. The reason for joining the Common Market was to rejuvenate the stagnent British economy and expand our trade with Europe NOT be part of a European Federal Superstate, which I’m afraid is the way things are going.

    We produce some of the most desireable vehicles in the world and I’m sure the the rich in Germany and France will still want their Roll Royce or Bentley, so trade will still take place, as the world is a completely different animal from the 70’s.

    In an everchanging world the people of Great Britian need to have a radical approach to the future and to just vote for the Status Quo will not serve our people in the long term.

    All the multinational companies have vested interests and are not opposed closing down factories at short notice when it is in their interest to move elsewhere.

    I shall be voting out.

  18. The BREXIT campaign is fuelled by our latent xenophobia and our reluctance to accept that Britain is no longer the centre of the greatest empire the world has ever seen, but a small insignificant island off the coast of Europe. People bang on about immigration, but it is two-way process. What about all those revolting Brits who have colonised chunks of southern Europe, trying to impose their way of life on the locals and pushing up house prices?

    As for the unions, they did contribute to the demise of British industry by restricting production through strikes, which in turn reduced profits and re-investment. They also resisted the introduction of new working practices, which was part and parcel of introducing new manufacturing technology.

    In 1974 the Labour Government was beholden to the unions for rendering the Heath Government impotent. The unions demanded and got a programme of nationalisation, and tax and spend policies. The public sector unions extracted from the Government a series of hefty pay rises which sent inflation well into double figures. The closed shop was legalised. Firms that went bust in this anti-business climate were to be taken over by the state. Strikes were the epitome of people’s power, striking a blow against evil employers. A cradle to grave mentality flourished, and the need to be competitive went out of the window. To the left, this was the nearest Britain came to a workers paradise, but it all came crashing down in 1976 amidst 26% inflation and the need for an IMF loan as Britain ran out of cash. More conventional economic policies were introduced, and by 1978 the British economy had improved. The experiment of 1974 to 1976 is unlikely to be repeated.

  19. I don’t think leaving the EU will make much of a difference to what’s left of the UK’s motor manufacturing. With WTO and GATT there would not be a 17+% tarrif and it will be in the EU’s interest to continue exporting vehicles to the UK.

    The possible advantage for the UK resident car industries from Brexit is that the Government may be persuaded to drop the catalyst exhaust systems requirement and allow manufacturers to proceed to develop workable lean-burn engines or even water assisted combustion? (SU carburetors make a return!)

    The disadvantage of Brexit is the reduction of expansion of existing plants, but that all depends on the level of trade tarrif (if any) while the advantage could be that British resident manufacturers are allowed a much greater degree of ingenuity. The export potential to the rest of the world in that case would be massive.

    While there are a lot of if’s and but’s in my argument Brexit just might be the spark needed to start over the British car industry.

    There is no doubt that EEC membership did not help the car industry in the 1970’s and 80’s as European manufacturers had invested a lot more in plant than the British factories got and the UK firms just could not compete.

    Brexit could work I reckon but, and it’s a big but, it would also require the UK to move away from its housing bubble method of creating wealth and persuade or indeed force the money masters in the City to invest heavily in R&D. Which if was done so in the 1950’s then Rover would have been buying out BMW by the 1990’s (or earlier.)

  20. Well, I dunno, it is a difficult decision, but when I see the likes of the awful people in the European Commission, like Jean-Claude Junkers, essentially he was previously head of the Luxembourg County Council, and that dreadful little squirt, Rumpy-Pumpy, now gone thank goodness, I do think things have gone badly wrong.

    It seems nowadays just a club for the nomenclatura of the member states to award themselves highly paid jobs. Yes, there is trade, but the rest of the world seem to have no problems trading with the EU, why should we be any different. I’m probably going to vote ‘Out” whereas in 1975 I voted “In”. Then it was the Common Market, and that’s what it should have stayed.

  21. We need to exit the EU as soon as possible. We survived for SO many years without it. It is a money maker for the politicians. We don’t control our own laws & immigration is on the high, our country is full!

  22. The notion that that the EU would levy punitive taxes on car exports from an independent is scaremongering in extremis. The UK exports 50% of its goods and services to countries outside of the EU, where currently the UK is operating at a competitive disadvantage by having to apply EU rules and regulations.

    In addition, the absolute worst case scenario would be that the EU could impose at most a 4% levy on goods from an separate UK, as per WTO regulations. The reality is that the EU imports more from the UK than the UK imports from it, therefore any mutual levy would cost the EU more. Common sense would dictate that the EU and UK would negotiate favourable terms with regard mutual trade, however do the phrases EU and common sense go together?

  23. One factor I think that is often underplayed in these discussions is the dead hand of the European Commission bureaucracy itself. Never mind all the Member States all in it for their own national self-interest(s). If Brexit occurs, the last thing the Commission will want will be other Member States thinking that if the Brits can do it, then so can they. Thin end of the wedge and all that. I predict that in the event of Brexit, they will make our lives hell, pour decourager les autres.

  24. 1. All we have to do is sign Article 50 before we leave. That puts us in the same bracket as Norway and Switzerland. (part of EFTA or whatever it is called now)
    2. Take a look at how many German built cars we buy and how many British built cars the Germans buy. It would hurt them a lot more than it does us.

  25. “The BREXIT campaign is fuelled by our latent xenophobia” another point lost for name calling.

    Presumably, Charlton, you are happy to hand over your cheque book to your next door neighbour? If not, then I can only surmise you hate the fellow?

    Intersting, as we debate the respective cons promoted by Cameron or the press, how so many have been so easily browbeaten to believe all our ills were the work of Trades Unions. Good old Maggie, she put the unions in their place!

    What a shame she never thought to do the same to the feckless parasites that infest boardroom and City to this day, given free reign to commandeer the wealth of the nation for their own benefit, flogging our assets to any passing spiv with no care for the nation, while the masses just keep their head down and think themselves lucky not to be tossed on the streets…

  26. This is an excellent blog and some of the people who’ve challenged its conclusions need to consider their, frankly embarrassing, posts. If we tell the rest of Europe to stuff their trade agreement, we won’t have a trade agreement and it will be an absolute disaster for our industry.

    The car industry, rebuilt slowly over the time we’ve been in the EU, will not last very long. We won’t automatically get some magical new deal, which will have all the advantages of the previous deal, without whatever it is that the antis don’t like (apparently that there are people with foreign names involved).

    It really is awful that there are people prepared to do so much damage to Britain without thinking.

  27. If Britain votes for exit, why should we get a benificial free trade agreement from the EU?
    The EU countries could instead offer incentives to UK manufacturers to relocate to continental Europe. BMW already manufactures the MINI in the Netherlands and Austria, and could expand production there at the expense of Cowley. And GM could easily manufacture the Astra on the continent.

  28. I think it is a real shame that this great website is now used for political scaremongering in the run up to a referendum.

    I truly hope the editorial team will ensure equal exposure is given to articles from alternative opinions to ensure a balanced website is returned.

  29. What bothers me about all of this is the amount of scaremongering, puff and name-calling. There are a lot of unknowns about exit whereas the status quo is understood. The lack of available facts to allow us to make up our minds when comparing “remain” against the risks of “leave” is woeful. This is a car-related site so would be appropriate for an enterprising reader to dig out some car-related import facts.

    Today Britain imports cars from near enough every major country. Not just those in the EU but US, Canada, Australia, South Africa, S Korea, Japan, China. What import tariffs are imposed on cars from each country? At least once we know this we can figure out that if we left the EU the tariff wouldn’t be worse than the worst case. As already stated if the EU imposed an import tariff of z% on our cars we would do the same to theirs. As we import more cars than we export this would hit the importers more than us so there is the incentive not to raise tariffs in the case of Brexit.

  30. In such a worst case scenario, we would merely revert to British factories making cars (and other goods) for the British market instead of exporting them, and we wouldn’t import as many. The surplus of UK exports over imports isn’t massive, so it would be close to swings and roundabouts. I realise the content of cars (and other goods) is from a range of countries so it isn’t quite that simple, but the same pattern would occur to a certain extent in components.

    Although my employer is a net beneficiary of EU membership, I intend to vote ‘OUT’ Why? Firstly, I believe even the most inept UK Government could improve on the EU’s roughly 46% (from a UK perspective) efficiency in transferring taxes raised into grants such as Regional Development and the Common Agricultural Policy, and would do so with greater accountability. Secondly, I’m increasingly appalled at some of the pointless and counter-productive hoops we’re forced as a public body to jump through in areas such as procurement.

    • There are scary forecasts of what Brexit will do to the costs of importing raw materials due to plummeting sterling (see the recent studies by LSE). So we might still make our own cars/goods, but their costs will go up significantly because unfortunately Britain is not blessed with vast tracts of natural resources.

      And procurement regulations won’t change. We have to export to survive, and that *will* require exporting to the EU. For the EU to import our goods, we’ll have exactly the same red tape and standards bodies to go through as we do today, but with none of the benefits of EU membership (i.e., we can’t influence those standards). That would be suicide.

      I’m voting IN.

  31. 406v6 says “As we import more cars than we export this would hit the importers more than us so there is the incentive not to raise tariffs in the case of Brexit.”

    Isn’t the bigger risk the eventual economic melt-down within the UK ? Figure this, we import from the EU more than we export to the EU, which means we buy more than we sell. So if the imports dry up there will be less to buy and prices will go up. Those of us old enough to remember “inflation” will recognise the effect this would have on our health and well-being as a nation.

    There is also a question about the use of statistics, for example:-

    Kev says “only about 15% of our exports go to the EU”
    Russell says “the UK exports 50% of it’s goods and services to countries outside of the EU”

    So who’s right ? Could be both or neither.

  32. “The eventual economic melt-down within the UK ?” I think an economic melt-down in the Eurozone is more likely, it’s problems have been brushed under the carpet for now, but for how much longer? As for the imports drying up – I am sure China, India, Korea etc. will be more than happy to plug that gap. I will vote Out, not because I am a “Little Englander”, but because I believe in accountable democracy, not a concept that troubles the EU.

  33. The reply button doesn’t seem to be working, so I’ll do it this way.

    “Just to sound an even nastier note : we did not waste in all about 1.5 million British lives in two world wars to prevent German hegemony, only to have it obtained by stealth”

    No. Those who sacrificed their lives in war did it, so that, in an unimaginable heavenly future, differences between nations could be resolved by grumpy fat old men in conference rooms, rather than by young men, full of life, dying in miserable agony on the battlefield. Oh! We achieved that heaven with the EU! And now people want to break it up, because they don’t always get everything they want from the grumpy old men.

  34. I’m sorry but whether we stay in or out is really irrelevant. People will “buy British” if the product is competitive, competent and desirable. One word Allegro… Or here’s another.. Maxi. Build it for the right price and they will come, although someone might kindly explain, like I am 5, how Toyota or MG are in any real way British. I honestly don’t care either way, and claiming it could kill off the British Car Industry now is fatuous since the list is basically Morgan.. umm Morgan… Oh, and that lot crowd funding that amazingly cute hydrogen coupe. That’s it.

    The issue we should all be worried about is getting the hell away from the Trump-gasm and getting shot of the “special relationship” before it makes London into Jihadi Junction. Cameron might be an ignorant little rodent and Duncan Smith might be a Government-sanctioned serial killer (600 suicides at last count) but Donald Trump is a full-on, card-carrying sociopath and nutcase who probably thinks Medina is a new model Dodge…

  35. To Richard

    Surely it is NATO that has kept the peace since 1949?

    http://www.nato.int/nato-welcome/index.html

    “NATO’s essential purpose is to safeguard the freedom and security of its members through political and military means.

    POLITICAL – NATO promotes democratic values and encourages consultation and cooperation on defence and security issues to build trust and, in the long run, prevent conflict.

    MILITARY – NATO is committed to the peaceful resolution of disputes. If diplomatic efforts fail, it has the military capacity needed to undertake crisis-management operations. These are carried out under Article 5 of the Washington Treaty – NATO’s founding treaty – or under a UN mandate, alone or in cooperation with other countries and international organizations.”

  36. Canute says “As for the imports drying up – I am sure China, India, Korea etc. will be more than happy to plug that gap. I will vote Out, not because I am a “Little Englander”, but because I believe in accountable democracy, not a concept that troubles the EU.”

    Okaaaay…… so the EU isn’t democratic enough and we should turn to China, India, Korea, etc. I see a flaw 🙂

    I really can understand the emotional desire to be out of the EU, in charge of our own destiny, recover our sovereignty, etc, etc. Just as I can see the emotional desire to leave a job that encroaches on family time or the emotional desire to go down the pub when there’s decorating to be done.

    What’s missing from the ‘out’ so far argument is an explanation of what exactly will replace our relationship with the EU. I hear lot’s of things we ‘could’ do but don’t hear anything about what we ‘will’ do. And perhaps more significantly, no word yet from any of these apparently eager partners, markets, etc who will take the place of the EU.

    I’m still to make my mind up, but the silence from the ‘out’ camp on specifics is a bit of a worry.

  37. To Pete Bogg. NATO was a counterpart to the Soviet Union.

    NATO is a military alliance. Military alliances do nothing to remove the cause of conflict. They just contain it, with luck. The causes are removed by negotiation on how things should be run.

    Just within what is now the EU, since 1700, the longest period of peace was 40 years and that was exceptionally long. Until the EU was formed, which resulted in 75 years of peace. Usually there was at least one war every 20 years. Those were all about who was ruling who. The war of the Austrian Succession, the war of the Spanish Succession, the war of the Bavarian Succession…..

    All those talking shops in Brussels, Strasbourg etc. full of overpaid officials are the places where things are discussed that would previously have been dealt with by diplomats. The stronger country made up the rules, and the weaker country had to accept them or form an alliance. What we have is a solid alliance, full of mess and frustration, that is an excellent replacement for military solutions.

  38. Richard : in your suggestion that there has been European peace since 1945 you seem to have forgotten the Balkan war of the 1990s . I’m afraid I do not subscribe to your theory that it is the EU which has kept the peace ( mostly ) for 70 years – it is fearsome weaponry which has done that , and will, I hope , continue to do so. Nothing deters bullies more than the assurance that if they start a fight, they will be destroyed

  39. The sooner we tell Johnny Foreigner to stick his treaty of Rome where the sun don’t shine the better!
    Now where’s my gin and tonic?

  40. Sorry Ian you are wrong. For the last 40 years we have been little Europeans only looking inward at the EU and ignored the rest of the world If we get out of the EU we will be Great Britons again and be able to trade freely with the rest of the world. Will the EU put a tariff on cars from the UK? No because we would put a tariff on cars from the EU and BMW etc. would not like being priced out of the treasure island. I will vote out to help jobs in the UK. We were told that the sky would fall in if we did not join the Euro we did not join the Euro and the sky did not fall in and it will not full in if we leave the EU now.

  41. You said you might get some harsh words for your article….

    You seem to have completely failed to mention JLR in your article, a company who exports a good amount of its product to the USA. While there would be implications for the UK in respect of any actions by Nissan, BMW etc I think it’s a bit much to suggest the entire British motor industry would face extinction. The success of JLR is trumpeted on this page at every opportunity so to exclude them from the collective umbrella of the “British Motor Industry” is a touch disrespectful

  42. So another argument from the ‘out’ camp is we already export to other regions such as the US and China so we don’t have to rely on the EU to but our goods.

    I’m ready to listen to this argument and I’d like to know:-

    How much extra would these regions buy from us once we are out of the EU ?
    Why would they buy more from us once we’re out the EU ?
    Why would the multi-national manufacturers of cars and other goods remain in the UK if they were mainly exporting to the rest of the world ?
    What would the trade-offs be with these other regions ?

    • 1) Other markets would not increase their imports from us, just because we weren’t in the EU anymore. The EU would continue to buy our cars. In or out will not make any difference to sales in the EU. The EU knows that if they were to impose tariffs on our cars, we would simply do the same in response. Since we are a major market for mainland produce cars, they would lose more than us, so it won’t happen.

      2) Manufacturers like being in the UK for several reasons: We are a low wage economy: We have very weak employment laws: We have very weak unions: We have low corporate taxes.

      The facts really are that simple. There is no ‘trade-off’ to be made, because there is no winner possible.

  43. Those in the Government who’d like to leave the EU will be comfortably off whatever way this vote goes. Most ordinary people will be better or worse off, depending on how this vote goes. There is a debate about whether ‘in’ or ‘out’ is better. However

    – the EU is our biggest trading partner
    – we’re the leading EU destination for foreign direct investment. This may be just because we’re intrinsically wonderful, or it may be partly because we’re in the EU
    – a ‘No’ vote could split the UK
    – in a global economy, the constituent countries of the UK have as much in common with French, Germans and Dutch say as we do with our UK neighbours

    From a motor industry perspective, the OEM investments in the UK are internationally mobile, and could go elsewhere over time if the numbers don’t add up. The industry is doing very well here now and could get to 2.2m production over the next five years. I’d hate to put that at risk.

    Do you want to be worse off and have 100% sovereignty here or be better off and pool some sovereignty with international partners?

    I’ll vote with my head and support ‘Yes’ to EU membership.

  44. As a French citizen and a great admirer of the British car industry, I think the problem is not only about economics. The European ideal has been bought on the ruins of WWII to avoid another war. And we must admit it has worked, inspite of all its defects and weaknesses. Europe as it is today is certainly not perfect, but I don’t envy Switzerland nor Norway. They are certainly rich on an economical level, but considered as politically insignificant and provincial countries.
    To me, from a historical and cultural point of view, there is no doubt that Britain IS a European country. Its destiny is inside Europe.
    And don’t forget that a Brexit could lead to a dislocation of the UK, as Scotland considers itself a part of Europe. England has a greater destiny that remaining alone in its frontiers. You’re not Flanders !

  45. I am a definite in. But I think this article paints a rather unrealistic view of what may happen to the UK motor industry if the UK leaves the EU. Comparing the world today with the world riddled with trade barriers and restrictions that existed prior to the UK accession to the EEC in 1973 is a rather meaningless comparison. To imagine the EU imposing trade tariffs on products from the UK with reciprocal action by the UK is fantasy.

  46. We’re better off in. Most of the car industry is foreign owned and should Britain leave, it’s possible factories could close and car production moved to continental Europe.

  47. The more scare stories that are peddled about leaving, and the more that Eurosceptics are portrayed as rabid xenophobes just further entrenches my position in voting “out”.

  48. There surely aren’t that many Daily Express readers (who also believe that next week we’ll have the coldest, wettest, driest, hottest weather in 1000 years) to tip us into Brexit? No doubt regardless they’ll retire to a British Compound in Spain to escape all the immigrants who have come to work here.

  49. Some of us Brexiteers are politically moderate Times readers, speak three foreign languages and work in a public body which is very much a net beneficiary of EU membership – even after all the bureaucracy it creates. But experience of working on projects partially funded by the EU has created scepticism towards the inept, unaccountable and backward-looking EU.

  50. You yourself had harsh words for anybody in a management capacity or finance, they are all parasites and spivs, selling off the nation’s assets, rather than people earning vital foreign currency for the country. We want the money they earn, but would like the people who do the speculating put in an internment camp because they are the scapegoats for the financial crash.

  51. Which of my previous comments are you referring to? I have no recollection of making such comments about management or finance, nor would I wish to, as I agree that they are vital to a healthy economy.

  52. Your imagination is running wild there Charlton, never have I said that all those at the “top end” of the tree are wrong ‘uns (internment camps?) but history shows how much once great British industries have been subjected to myopic planning and starvation levels of investment by self-serving management, financiers and weak government which has led us to depend on a fragile “boom or bust” service economy, with appalling consequences, where one corner of the country prospers while the farthest reaches of the nation never gets a chance to recover before the next slump hits – is it any wonder the Scots get narked at Westminster?

    Scapegoats for the financial crash? If you can’t meet the stakes you shouldn’t be in the game. The truth is our governments baled out the banks and write off their debts but won’t lift a finger to save manufacturing industry. Similarly, the plight of the steel industry is a damning indictment of the EU, impotent when quick action is needed to save the steel industry.

    There’s little merit in gaining foreign currency if the real assets are owned abroad. Put simply, I could sell my house to a Swede (before you insinuate – I think the Swedish people are a splendid bunch) and be up to my neck in Krona but I know which of us would be wealthy in the long run.

    George Oz. tells us it’s not the bankers fault too, he reckons it’s the likes of all those disabled scroungers with orange badges and spare rooms who’ve crippled the economy…

    But getting back to the EU debate, can we call the Scots, Irish, Welsh who vote to leave “Little Englanders” too?

    Personally, I look forward to the day we are part of a united Europe, with strong trades unions (with seats on the board), lower paid directors and employment laws that prevent the overnight destruction of ordinary lives and communities. Give the plebs a say in things, treat workers with respect, value industrial infrastructure. A recipe for disaster? Ask the Germans…

  53. The Germans are strong because their products have strong brand values, which makes selling them easy and their trade unions got on with the job of improving their workers conditions without confrontation.
    In Britain the trade unions used their ability to hold the country to ransom to the point where they were deemed a threat to the nation’s economy and were finally brought to heel. Public services were privatised to prevent them from holding the country to ransom. Selling off the nation’s assets, or guaranteeing continuity of supply at the point of use?
    I personally dread the idea of the trade unions in this country ever being strong again. They abused their power and were deservedly put in their place and cannot be trusted not to do so again.
    Your fantasy world seems to require pots of public money. This again was all done in the seventies. British Leyland destroyed confidence in state investment of manufacturing industry. Strikes burned through cash intended for capital investment and that that was spent on new equipment was often invested in the wrong type of plant and tool because the management was not fully on stream with the latest manufacturing techniques. Britain in the Seventies was a hopeless basket case in which establishing a socialist state was more important than producing cheap reliable products that people wanted to buy, and the solution to this was to throw yet more money at the problem when Britain was already in hoc to the IMF.
    Germany was worth investing in, Britain was not.

  54. I don’t think Ian SW’s vision is a fantasy. It’s called communism, and look where that has got people !

  55. Hello Charlton

    We’re back to the old “everything was fine until the unions ruined it all in the ’70s” argument here, aren’t we?

    Have you considered that the German unions could improve workers rights and influence without confrontation simply because they operated in a climate where management took notice of them (or were obliged to), rather than the class-driven “Them and Us” perpetuated over here – where managers were so intent on denigrating the workforce that, even in the sixtes, only white collar staff had the privilege of loo roll, for example?

    As you say, the Germans built strong brand values and invested wisely in contrast to British companies as, in your words “cash that was spent on new equipment was often invested in the wrong type of plant and tool because the management was not fully on stream with the latest manufacturing techniques”.

    Post-war, Britain had a reputation for quality goods, no militant unions and the sitting duck sales target of the commonwealth plus other international goodwill but complacency saw every market we dominated gifted to countries with forward-thinking leadership.

    “Public services were privatised to prevent them from holding the country to ransom, guaranteeing continuity of supply at the point of use?” Well, consider the case of power supplies – when nationalised, all consumers, domestic and business paid the same rate for the same level of service, no matter where they were, while skilled and dedicated staff were paid a fair rate and money was re-invested in infrastructure.
    Nowadays, we can have power cuts at the merest hint of bad weather, exacerbated by lack of routine maintenance and reconnection times are a disgrace, due to fragmentation of supply companies and a reluctance to spend in emergencies.
    Nor are there any reserve stations, as once there were.

    The fact that privatisation reduced investment as profit took priority is evident in the critical situation we face with building new power stations, where we now have the PRC building new plants which are only commercially viable due to the Government signing us up (against all industry advice) to pay over the odds for future supplies… so future generations are effectively “held to ransom” by selling out to the the world’s most brutal Communist dictatorship.

    And if unions had to be brought to heel for threatening the nation’s economy, what do you suggest we should’ve done to curb the reckless behaviour of the City folk who actually did destroy our economy? I don’t mind anyone betting the farm, but I object most strongly to having my farm and my children’s future gambled away without my permission.

    It doesn’t take public money to pay a decent wage and treat people with respect, it just needs legislation to protect workers from the abuse of power by large companies.

    Perhaps you disagree Charlton, you seem to say that questioning working conditions is the behaviour of the workshy, displaying a lack of gratitude to their wealthier overlords? Of course, you’re entitled to your individual views, your own fantasy may see you pine for a more feudal system, a noble land of Masters and serfs? But please may I ask a personal question – have you yourself, in your working life, ever turned down a pay rise or passed on the chance of a perk at work, or did you feel a sense of entitlement to whatever you were offered?

    Anyway, we’ve strayed far from the topic of this thread, so I’ll leave the last word to you and toddle off to look at some car stuff.

    • From what I’ve observed, and speaking with German relatives, the big difference seems to be that in Germany, ‘Engineer’ is an esteemed title much like Doctor is here.

      Management are more likely to have an Engineering background in Germany, an appreciation of how the product works and should be built, rather than the UK in which an MBA made up of accounting and marketing modules seems to be a pre-requisite beyond junior management level.

      Over here, as soon as a youngster completes their technical college course having learnt how to change the oil on a 25 year old Ford Sierra, they walk into an ‘Engineer’ title.

  56. The world is not going to stop turning on the 24th June, if we vote out. BMW and Mercedes will still be importing to us. We will of course need to make new trade agreements. One one hand we are told the UK is so insignificant that we cannot survive outside the EU, on the other hand we will create world instability on the stock markets. Project fear in overdrive. I will be voting out, so we can have control over our own laws, borders, taxation etc. I have no issue with the “common market”, but over time this has morphed into the EU, which has a hand in much more than trade.

  57. Ian, You make some very valid points, but like a lot of supporters of staying in, you only look at one side of the coin. so a more balanced argument is as follows. You mention prior to 1973 as the UK having a 17.5% duty imposed making BMC products uncompetitive in mainland Europe and that this may apply after Brexit. this future scenario is factually wrong as world trade organisation agreements would limit any duty to less than 5% on manufactured goods, not 17.5%!! In any case if the EU did impose tariffs we could do the same and a hefty tariff of the sort you describe would make Mercedes, Audi and BMW wholly uncompetitive, and just like 1970 when 96% of cars sold in the UK were British made, there would be a move towards British manufacturers regaining share over time. Secondly as is already happening, the pound would fall in value, so a Brexit would encourage major manufacturers and suppliers like VW to produce in the UK, one of their biggest markets in the world, and not lose share and profits to rivals. A lower pound would boost exports to the rest of the world. As the the supposed brilliant trade deals the EU has, why does a Jaguar sold in China have a 100% tariff import duty when an MG sold here has no import duty?? Hardly a great trade deal, even our politicians could do better than that!!Furthermore yes the car industry is doing well, but prior to 1973, BLMC was the third biggest car manufacturer in the world and Ford, GM and Roots group had a much larger manufacturing presence in the UK than now, so EU membership has driven huge amounts of manufacturing abroad. My local TATA stell plant faces closure and complete economic collapse of my area (North Lincolnshire) due to the EU allowing cheap Chinese steel imports, and my business will suffer as a knock on effect, the pubs are already empty as no one here has any money!!

  58. The EU is far from perfect and the PM’s ‘reforms package’ is indeed lame to put it mildly – but I’ll be voting to stay in as the other option seems far worse for the country as a whole, obviously so to my logic.

    I feel OP Ian may be a bit OTT on the potential doom and gloom, but the basic and very important truth is there, notwithstanding the many other issues around the question.

    For all the brexit camp’s banging-on about being ‘ruled’ by Brussels, (even if that were true) they just don’t come-up with nearly enough solid reasoning for my liking to back their argument.

  59. @ Simon W, while it’s true the former Big Four British car manufacturers have a very much diminished presence in this country compared with 1973, the slack has been taken up by German and Japanese companies and the most successful parts of the former British Leyland, JLR and Mini, are doing extremely well. While yes it’s true eight of ten new cars are imported, it was the other way round in 1973, exports are at their highest levels since the early seventies and the car industry now produces highly competent and reliable products that sell well all over the world.
    Withdrawal from Europe could possibly see companies that are based here upping sticks to continental Europe and the British car industry becoming a total irrelevance. I did see an interview with a Unite shop steward at Vauxhall last week and he said leaving the EU could see production of the Astra and the Vivaro moved to Germany as Europe is GM Vauxhall’s biggest market.

  60. I don’t think many of those who warn about manufacturers moving to Europe quite understand the costs, both direct and indirect, involved . The capital costs of a car manufacturing operation are quite phenomenal, and those costs essentially would be doubled up if, say, Nissan were to move production to Europe , and factory closure costs would be crippling . Furthermore, the additional direct costs in Europe are hideous, ( welfare, social security, jobs for life etc ) which explains the attraction of the UK as a manufacturing base. I haven’t noticed Switzerland , Norway, or Turkey suffering unduly from not being in the EU , whereas Italy, Greece, Spain, Portugal , with completely bombed-out economies despite the considerable capital subsidies they have enjoyed in the shape of new roads etc , have been ruined by it . It seems to me that the economic arguments are a side show : what really matters is who do we want to decide our future , us or Donald Runt or whatever the name is of the nonentity who is the Commission President ( whatever that is ) ?

  61. @ Christopher, above.

    Yes, at what point in time, over what period, would the economic disadvantages of leaving the EU become greater than the cost of relocating a manufacturing plant??

  62. @ christopher storey, Nissan and Vauxhall have large factories across Europe and could quite easily close down factories in Britain if they were faced with large tariffs for exporting from Britain if we left the EU. Also should we set up retaliatory tariffs here, then the cost of cars in general would rise and we no longer have a British Leyland type manufacturer that could survive in a siege economy.

  63. Nissan and Vauxhall ? Or are you meaning Renault ( next to dead ) and Opel ( gasping for breath ) ? The proponents of staying in cannot have it both ways. On the one hand the argument is put forward that leaving the EU would weaken the pound ( which would of course lower the UK relative cost base even more compared with the Eurozone ) and on the other hand it is said that leaving would cause manufacturers to move out of the UK. And, as I have already pointed out, the direct costs , thanks to the European Commission , and inflexibility of employment in the EU is the thing that manufacturers wish to avoid . Also, we talk of motor manufacturers as if they were of major importance because they employ a few thousand in the UK. Where do you think the 25 to 30 million people who are employed in the UK work ? It is the small to medium employers who are the lifeblood of the economy , not a handful of motor factories using Chinese steel

  64. I did wonder if the amount of tariffs would lead to a modern version of the corn laws, with prices rigged high because imports are effectively banned.

  65. Glenn Aylett :

    You’re assuming we leave without a free trade deal – there are many non-EU countries who trade freely with the EU, it’s the reason the Ford Transit is built in Turkey these days. This supposedly inpenetrable tariff wall didn’t save Ford at Southampton.

    Worst case scenario – the EU’s standard tariff on imported cars is 10%. This would last about a week if we put a corresponding tarriff on imported BMWs. The cost of EU regulations and charges more than cancel this out in any case.

    The EU is not the future – 55% of our trade 10 years ago, now 45%, on a constant downward trend. JLR’s largest market today is China.

  66. This aricle is utter drivel. Do you think the EU will want to lock out access to the worlds fifth largest ecomomy???? The likes of Vag, BMW and Mercedes will be in the office of Merkel the day after to demand good EU+UK terms

  67. As I enjoy a pint of ‘Old Peculiar’ I think that in the event of BREXIT all lager should be banned. It is a revolting and truly satanic European import that should be wiped from the face of the earth!

  68. I think the vote will be close, but like the Scottish independence referendum, about 55 per cent of people will choose to stay in the EU as some people see it as a leap into the unknown. However, if the referendum is close and other countries start holding referendums, this will give greater impetus to EU reform and hopefully reduce the role of the EU.

  69. My only comment on my own blog.
    I hope the England football team are not allowed to vote today as I understand they can’t put a cross in a box!

    Sorry I had to get it in.

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