Tata-owned Jaguar Land Rover (JLR) CEO Ralph Speth has warned that a UK-EU Brexit trade deal is needed that protects frictionless trade between the UK and the EU or the company will be faced with additional costs that could potentially cost tens of thousands of UK jobs.
According to Reuters, Speth said the company would not be able to build cars if post-Brexit customs checks meant that the roads to and from the southern English port of Dover, which is used to transport components, becomes a ‘car park’ due to border snarl-ups.
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“A thousand (jobs were) lost as a result of diesel policy and those numbers will be counted in the tens of thousands if we do not get the right Brexit deal,” said Speth, according to Reuters. The thousand jobs remark refers to redundancies made earlier this year at JLR.
“Currently I do not even know if any of our manufacturing facilities in the UK will be able to function on the 30th (of March),” Speth reportedly added.
The UK and EU are engaged in discussions to get a Brexit deal done in October or November ahead of the UK’s departure from the EU in March 2019.
Under Prime Minister May’s ‘Chequers’ proposal for UK-EU trade, Britain will seek a free trade area for goods with the EU, largely by accepting a ‘common rulebook’ for goods and UK participation in EU agencies that provide authorisations for goods. The UK government claims that its proposal would continue frictionless trade at borders so that manufacturing firms, such as JLR, could continue to practice ‘just-in-time’ delivery for lean supply chains.
However, the proposal has met opposition in Parliament from MPs who believe it keeps the UK too closely tied to the EU and impairs the UK ability to strike new trade deals around the world. The EU has also appeared to view the current Chequers plan as unworkable.
Speth said unfettered access to the single market for Jaguar Land Rover (JLR), which built nearly a third of Britain’s 1.67m cars last year, was “as important a part to our business as wheels are to our cars”.
Reuters also reported that he warned that long-standing issues around low productivity in Britain could be compounded by a Brexit agreement which made the country less competitive.
“It is thousands of pounds cheaper to produce vehicles for instance in eastern Europe than in Solihull (in central England), and what decisions will I be forced to make if Brexit means not merely that costs go up but that we cannot physically build cars on time and on budget in the UK?” Speth said, according to Reuters.
“Any friction at our borders puts our production in jeopardy – at a cost of 60 million pounds a day.”
