[Merged]Brexit stuff

[DodgyAgent]

As a Brexiteer and in the interests of Objectivity this news is inevitable and it is worrying. How much is bluff however and are these companies realiy going to up sticks and move and if so where?

[sasguru]

As our exported goods are now cheaper you would have thought it sensible to be based here.

FFS you seem particularly dense - not with tariffs, hence their insistence on the single market.
They are businesses and their goal is profit - they'll stay here until they stop making money, then they'll move.
Simple.
We could of course ensure they made profits, in spite of the tariffs, by removing the minimum wage and being a low wage economy.
Which would suit the Tories, so that's what we'll probably do.

[Old Greg]

As a Brexiteer and in the interests of Objectivity this news is inevitable and it is worrying. How much is bluff however and are these companies realiy going to up sticks and move and if so where?

You are worrying unnecessarily. The Director of Nissan EMEA has already stated that the Sunderland plant will retool to produce black passports and threepenny bits.

[Paddy]

I thought a lot of it was because we gave them massive subsidies and big contracts to build stuff for us.

As our exported goods are now cheaper you would have thought it sensible to be based here.

Cars are virtually assembled in the UK rather than manufactured. Many components are imported and therefore cost more. The devaluation of Sterling causes inflation and there will be pressure on wages.

The least value of a car factory is the prefabricated building. The valuable machines and robots can be unbolted a shipped to another country within days.

[WTFH]

Aren't bake beans foreign?

Bloody foreign beans coming over here, taking our jobs, claiming benefits, pushing up house prices, giving us cancer and wind...
It's a plot by the EU, if we consume the beans then we are becoming more european, just by eating the produce.
I blame the BBC.

[sasguru]

As a Brexiteer and in the interests of Objectivity this news is inevitable and it is worrying. How much is bluff however and are these companies realiy going to up sticks and move and if so where?

Wow an intelligent response.
I will try and give an intelligent answer.

The problem is that in the worst case scenario (WTO rules), the tariff on British made cars in Europe will be 10%.
As the margin on the (mainly) mid range cars that Britain makes is razor thin, I doubt that a 10% tariff can be sustained by the manufacturer - they can't pass it on the the price-sensitive buyers who buy Qashqais and Hondas.
Jaguar/Range Rover might be able to. And also Mercedes/Audi/BMW could probably survive a tit-for-tat if we charged them 10%, since their buyers will pay anyway.

On the other hand it does cost a lot to up sticks and move. There would have to be a supply chain in place.
It seems that Slovakia has all the infrastructure necessary :

https://en.wikipedia.org/wiki/Automo...ry_in_Slovakia

That's why Tata has opened a large Jag/LR manuafcturing plant in Slovakia - if they find their profits reduced following a hard Brexit, I reckon they'll just run their UK plants down and ramp up in Slovakia instead.
Likewise the way Nissan operates is that all their worldwide plants bid for the rights to make the latest models.
If Sunderland's business proposition ceases to be cost effective due to Brexit tariifs, they'll just build the latest model in one of their other plants and run down Sunderland.

Human Skills are largely irrelevant now that automation is widespread, so that is not an issue.
Mercedes builds some C-class in South Africa, BMW builds in India.

[sirja]

I thought a lot of it was because we gave them massive subsidies and big contracts to build stuff for us.

As our exported goods are now cheaper you would have thought it sensible to be based here.

I really don't think big Jap car manufactures, Pharmaceuticals or financial institutions are located here, because of subsides.

Do you seriously think these companies would not at the very least consider their options, if the UK was no longer a member of the single market? As I previously stated there are multiple reasons why an international firm could choose to locate in the UK, single market access being one of them. Only a person living in complete denial would think that loss of tariff free trade with the worlds largest single market, would not at the very least prompt an assessment of options. That is not sabre rattling, it's just sensible management.

[sirja]

As a Brexiteer and in the interests of Objectivity this news is inevitable and it is worrying. How much is bluff however and are these companies realiy going to up sticks and move and if so where?

Thanks for that mature and balanced post. I think regardless of what side of the divide people are, we should try and objectively asses issues as they arise. This is going to be a very complex process indeed, with lots of bluff at different stages.

I still feel ultimately some sort of compromise will have to be achieved which will end up pleasing nobody(I guess that's the definition of a good compromise!)

[sasguru]

I really don't think big Jap car manufactures, Pharmaceuticals or financial institutions are located here, because of subsides.

Do you seriously think these companies would not at the very least consider their options, if the UK was no longer a member of the single market? As I previously stated there are multiple reasons why an international firm could choose to locate in the UK, single market access being one of them. Only a person living in complete denial would think that loss of tariff free trade with the worlds largest single market, would not at the very least prompt an assessment of options. That is not sabre rattling, it's just sensible management.

Originally in the 80s, the Jap car makers were given subsidies by Thatcher to build factories here.
But if they hadn't had access to the single market they wouldn't have bothered.

[WTFH]

The car assembly plants got big kickbacks to set up here, but that cash is long since gone.
Most of the pharmas/medical companies have offices in the UK because of supply to the NHS - responsible for >30% (for some the figure is close to 50%) of the turnover for their European business. But the companies themselves are registered in Ireland. I would expect to see downsizing of operations here if the NHS is privatised. They also tend to have a small warehouse in the UK, while the majority of their deliveries come from EU based warehousing (particularly from Belgium).

We may do some assembly in the UK, but we are not a centre for manufacturing or distribution.