When project fear becomes the reality we feared, it's time to wake up and smell the diesel. Airbus will be the first big manufacturer to withdraw investment from the UK. BMW will surely follow. Hard Brexit, outside of the UK, will seriously damage manufacturing and investment in Britain.
As we have long explained, Airbus, Motor, Big Pharma and Financials will be badly hit. Textiles, farming and further education will be badly bruised.
According to the Telegraph today, Boris Johnson's response is "F***" Business ... and they will. This incredible inability to face the reality of isolated life outside the EU will be seriously damaging to growth, jobs, manufacturing, trade and the balance of payments. Airbus is preparing to abandon plans to build wings in Britain and move production to Europe, China or the U.S.A.
"In the absence of clarity, we have to assume the worst case scenario", Tom Williams CEO of Airbus, told the Times this week. "It is the dawning realization, we now have to get on with it."
"The dawning realization we now have to get on with it"
In the UK Airbus employs 14,000 people directly, plus 110,000 indirectly. The company is already stockpiling components ahead of potential major disruption. Parallel manufacturing facilities will be established. China must be a firm favourite. The option, to establish a strong position in South East Asia, will become irresistible.
Airbus has factories in North Wales, Stevenage, Portsmouth, Bristol and Broughton. The impact of closure on the Broughton community would be devastating. according to Gabriella Swerling, in the Times today, according to one worker ...
"Half the people who work at Broughton Airbus voted to leave the EU. They were not expecting this outcome.
The voted because of immigration and they did not think beyond that." Well there is still chance ...
BMW followed Airbus this week, with a warning about the consequences of Brexit uncertainty. UK boss Ian Robertson argues clarity is needed by the end of the summer, or investment decisions will be at risk. BMW employs 8,000 in and around the Oxford area.
Trump threatened the EU with 20% tariffs on cars this week. The President has a vision of "No Mercs in Manhattan" and "No BMWs on Broadway". Not sure why. A legitimate demand for equal tariffs seems fair but misses the point. The trade growth future for the EU is with China and South East Asia, not with the USA. An ageing superpower with a penchant for introverted myopia does not offer the best deal for the future ...
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