Back in February, I blogged that my fears over a deal-less Brexit and the apparent inability of the UK Government to come to an acceptable solution over trade with the EU could cost the car industry an awful lot of money. At the time, this seemed like a worst-case scenario. Surely our Ministers couldn’t really be so stupid as to avoid striking a deal. Surely…
However, five months on, it really does seem to be heading in this direction. And if my dystopian ramblings weren’t enough to depress/enrage/anger any AROnline readers over the impending damage that could be done to the UK motor industry, it seems that BMW decided to direct a shot across the Government’s bows over the future of MINI. This really is happening, folks.
Bear in mind that the UK is set to leave the European Union for good on 29 March 2019, you can understand the carmaker’s frustrations. Ian Robertson, the head of BMW UK told The Guardian the company needed clarity on future trading arrangements by the end of the summer.
BMW’s threat to the UK Government over MINI and Rolls-Royce
‘If we don’t get clarity in the next couple of months we have to start making… contingency plans – which means investing money in systems that we might not need … which means making the UK less competitive than it is in a very competitive world right now,’ Robertson said.
According to Burkhard Riering, the Editor of Automotive News Europe’s sister publication Automobilwoche, the company is setting up a taskforce that’s preparing for a worse-case Brexit where the UK quits entirely the EU’s customs union and the single European market, and what the company needs to do to avoid bottlenecks at the border.
I’ve said it before, and I’ll say it again: what is our Government doing to calm the storm? Is it talking to the British car industry, and saying ‘we’ve got your back’? No.
Is the UK Government working ceaselessly with the EU to ensure that there’s a European trade deal that will guarantee tariff-free deal – in and out – that will make sure our cars can be sold in EU without penalty, just as we can continue buying cars built within the EU in the same way? No.
We’re in a mess – who’s going to suffer?
And more than that, the car industry is a global business – parts pass to-and-fro across borders many times before they become fully-fledged cars – so imagine how tariffs are going to complicate that issue. Why is it that we don’t have a clear idea about how the UK is going to look in a post-Brexit world?
In short, we’re in a mess. And the Government really does appear to be absolutely clueless about the how it’s going to tackle this problem. Before we heap too much bile towards the Tories on this, remember that Labour’s position is equally unclear, if a little less vocal. If Corbyn didn’t want it to happen, he could have stopped it in Parliament. But he didn’t.
And all the time, there are still influential elements within the Government which seem set on doing ‘no trade deal’ with the EU, as if that’s a good thing. It’s not a good thing – in fact, it’s insane. I’m not going to rant about how we’ve been let down over Brexit, and how we ended up here.
Where do you start with blame? Nigel Farage for getting the popular support of millions of voters? David Cameron for kowtowing to his sizable following and pledging to run a referendum in the event of winning a majority in the 2015 General Election (which he thought he’d never get)?
Or Labour for pitching Ed Miliband for the job of next Prime Minister (and thereby gifting the Tories with the win)? Or maybe Boris Johnson for helping win the Leave vote in a mood of national anti-establishmentism and general mistrust?
How do you solve a problem like Brexit?
The question is – what can we do to solve the problem, and put industry and the economy back on an even keel? As a population, we’re still as divided as ever on the issue (maybe more so), and all this time on, we’re also as uninformed as we ever were. That’s an unforgivable side-effect of our leaders’ complete ineptitude on the issue – they are seemingly clueless, so where does that leave us?
It’s interesting that, in the 20 months since Dave Leggett wrote his excellent blog, ‘Brexit and the UK’s automotive industry‘ we still don’t seem to have made any real progress at all. The global car industry has put pretty much all UK strategic planning on hold while the mess is sorted out – which plays into the hands of everyone else, and causes companies such as Jaguar Land Rover and Vauxhall to cite ‘Brexit uncertainty’ in the face of bad news.
As Dave says, ‘[Automotive] investment strategies are evaluated on a variety of competitive criteria, including any changes to shipping costs. And it’s not just the existing companies to consider, there are decisions being made on long-term criteria by new investors. A Chinese OEM, for example, might now consider that locating a plant in the UK is less preferable than, say, Poland, because of Brexit risks attached to UK-EU trade costs.’
Lions led by donkeys…
This situation is not likely to change while we have such clueless people running the UK-EU negotiations. According to The Guardian‘s Andrew Rawnsley, a team of 11 have completely failed to agree a strategy for the Second Phase of the negotiations with the EU. The Prime Minister seems powerless to unite them in our strategy – despite the car industry (a huge economic power, remember), as well as other important sectors, wanting the UK to stay in the same trading bloc as the EU.
Maybe it’s time for a rethink. It’s fairly unlikely that another referendum will heal the national divide (for the reasons stated above), but equally something needs to be done pronto to get the negotiations on-track again before the UK is left out in the cold completely. Time is running out. The current Government has proved that it’s unable to get on with the task in hand, and equally Labour is shifting this way and that on the issue. So why not give someone else a go?
The UK has some of the world’s greatest and cleverest entrepreneurial minds, so why on earth would you leave this issue in the hands of a bunch of untrusted career politicians? They could report to a cross-party committee, which would be responsible for getting this mess straightened out while there’s still time.
Just how important is the UK car industry?
Think it’s not important? According to the SMMT, in 2017, the UK automotive industry was a massive contributor to the UK economy. And that’s despite it having just endured a tough-ish year. It accounts for more than £77.5bn turnover and £18.9bn value added to the UK economy.
There are 169,000 people employed directly in manufacturing and in excess of 814,000 across the wider automotive industry, it accounts for 12.0% of total UK export of goods and invests £4bn each year in automotive R&D. More than 30 manufacturers build in excess of 70 models – and you know what, people in Europe want to buy them.
Do you really want the fate of all of that resting in the politically-motivated machinations of some clowns in Westminster? It’s probably time to start writing to your MPs, and tell them how worried you are – especially if you live in a marginal constituency.