Car manufacturing giants bring new no-deal Brexit warnings for UK
PUBLISHED: 17:34 09 July 2019 | UPDATED: 17:34 09 July 2019
PA Wire/PA Images
Both BMW and Ford have brought sobering news for UK car manufacturing post-Brexit, with Ford’s chief reiterating warnings of the “catastrophe” a no-deal scenario would bring.
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Ford's chair Steven Armstrong said the motor giant would have to look again at its manufacturing "footprint" in the UK in the event of a disorderly departure from the EU.
The warning came a day before BMW revealed that it had stopped producing engines destined for South Africa in one of its factories due to post-Brexit tariff fears.
Giving evidence to the Commons Welsh Affairs Committee, the Ford chief insisted that although the recent decision to close the firm's Bridgend plant was not directly linked to Brexit, the "frictions" of a no-deal Brexit would make it "much more difficult" for the company to compete.
"I have been very vocal publicly that a no-deal Brexit would be a catastrophe for our industry," he said.
He added: "We have previously publicly quoted that that could be as much as a billion dollars a year in incremental costs, be it tariffs or friction at the borders.
"I have also been very clear that that would cause us to have to think about what our footprint would be moving forward.
"That doesn't mean that we would immediately close all the facilities in the UK, but it would make it much more difficult for the facilities to be competitive.
"That is just a fact of the business I am in."
Meanwhile, fears of post-Brexit tariffs were also behind BMW's 2018 decision to cease engine production for export to South Africa, revealed a senior BMW boss.
BMW stopped supplying engines for South African cars at its Warwickshire factory in early 2018, said production head Oliver Zipse, because they will not have been produced in an EU member country after Brexit.
"If you would put that specific engine into an X3 in South Africa and you would have Brexit, that engine would not come out of the EU any more," said Zipse, who is likely to take over as CEO. "That complete car would lose its tax-free import [status] into Europe."
He added that this "of course is bad for the UK because that specific engine is not being built here, it's not providing labour any more in the country".
"That happened one-and-a-half years ago," he said. "It was very quick. That is what will happen. In that [situation] you will lose work in this country."
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The Hams Hall plant in Coleshill has been manufacturing and exporting engines worldwide since 2001. A BMW spokesperson said that engine production overall hasn't decreased, because the company is supplying more engines to the USA.
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