A third of UK auto firms already shedding jobs for ‘no deal’ Brexit
UK auto industry research shows the impact of escalating fears of a ‘no deal’ Brexit, with a significant number of firms already cutting jobs and a large proportion relocating operations overseas.
Published by the Society of Motor Manufacturers and Traders (SMMT), the research shows that the number of UK automotive firms axing jobs to prepare for a ‘no deal’ Brexit’ has risen to one in three, up from one in eight when the survey was last carried out in November 2018.
Four-fifths (80.3%) fear leaving the EU without a deal will have negative consequences for their future prospects (up from 74.1% 10 months ago). Virtually the same number (79.6%) are worried about the impact on their profitability while two-thirds (62.2%) say ‘no deal’ will impact their ability to win overseas business and a similar number state that they will be unable to invest in their UK operations.
And more than one in 10 (11.8%) of firms said that they had already divested from their UK-based operations while around one in seven (13.4%) are relocating operations overseas. Overall, three-quarters (77.2%) of firms say that there has already been a negative impact on business even before the UK has left the EU.
Separate SMMT research has already shown that some of the UK’s biggest automotive manufacturers have spent more than £500m in an attempt to mitigate at least some of the risks of a ‘no deal’ scenario. But many will not survive the application of a 10% tariff on finished vehicles, which will in turn force up car prices for customers.
The research has been published as the SMMT continues to call for an orderly withdrawal that includes a free and frictionless economic relationship between the UK and the EU.
Mike Hawes, SMMT chief executive, 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.
“As yet, the damage is not irreversible. But we need a deal. A deal that, in the short term, enables a ‘business as usual’ transition for as long as it takes to negotiate and implement the future trading relationship. In the longer term, that deal must replicate all of the benefits we currently enjoy which means an ambitious deal that delivers free and frictionless trade. 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.”