WHEN it comes to the UK car industry, Brexit is the nasty gift that keeps on giving. From the pound’s slide to our impending no-deal departure, an industry that imports most of its raw materials from Europe and exports the vast majority of its finished products back again has been hit for six.
The impact of that is there for all to see: Jaguar Land Rover is cutting 4,500 jobs from its UK workforce; Honda will close its long-standing Swindon plant; Nissan has scrapped plans to build its next-generation SUV in Sunderland, and Ford is cutting up to 1,700 jobs as part of a restructure of its European business.
Until now most manufacturers have shied away from holding Brexit directly responsible for these decisions, with a fall-off in demand from China and a slump in diesel sales all said to be contributing to their woes. Vauxhall’s French owner PSA has had no such qualms, though, announcing at the weekend that it will mothball its Ellesmere Port plant if a no-deal Brexit ends up rendering the site unprofitable.
With customs checks and tariffs for importers and exporters likely to send the company’s cost-base skyrocketing, PSA’s chief executive Carlos Tavares said the business is making plans to shift production of the Vauxhall Astra to a site in Southern Europe instead. The move would lead to the loss of the 1,000 jobs that remain at the Cheshire plant after 400 were cut last year, further devastating the local area in the process.
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Though he said he would prefer to keep production of the Astra in the UK, Mr Tavares told the Financial Times that for PSA, which imports three-quarters of its components and exports 80% of its cars, losing the ability to trade tariff-free would make the likely closure a no-brainer. “We need visibility on customs for parts coming from continental Europe or from the rest of the world, and we need visibility on the customs for cars coming out of the UK to continental Europe,” he said. “Those are the only things we need; everything else we’ll take care of.”
This should come as no surprise. Trade association the Society of Motor Manufacturers and Traders has, after all, warned many times about the impact of a no-deal Brexit, with its chief executive Mike Hawes noting just last week that such an outcome would “present an existential threat to our industry”. Stressing that frictionless and tariff-free trade was the only way to secure the future of British car-making, Mr Hawes reiterated that a no-deal Brexit “would result in huge tariff costs and disruption that would threaten production”.
Yet despite this, and despite the car-manufacturing industry contributing around £19 billion to the UK economy and supporting well over 150,000 jobs, the Government continues to pay no heed. Indeed, on the same day that PSA made its Ellesmere Port announcement, newly installed Prime Minister Boris Johnson was blithely spreading a little bit of news of his own, letting it be known through his erstwhile employer The Telegraph that far from finding ways of ameliorating the impact of a plain-vanilla Brexit he is going to spend £100 million of taxpayers’ money on “an unprecedented marketing blitz” advertising the no-deal kind instead. With his government reportedly now working on the assumption that the UK will make a deal-less departure from the EU on October 31, Mr Johnson will bombard 27 million homes with leaflets explaining why he believes that is a good idea.
Pointless though any paper-based public information campaign is in the age of the internet, never mind one that is being touted as the biggest since the Second World War, the implication is clear: Boris Johnson is so intent on securing his place in the history books that he is determined to secure Brexit at any cost.
After his plan was revealed, Mr Johnson made his first prime ministerial trip to Scotland as part of a mission to, he said, “renew the ties that bind our United Kingdom”. While professing himself to be “a passionate believer in our great union” is all well and good, perhaps, given PSA’s announcement, Mr Johnson should have paid a visit to Linwood while he was here to educate himself on just how devastating the loss of a car-manufacturing plant can be.
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Though Scotland has never been a major player in the car-making industry, the Renfrewshire town was the home of the Rootes Group’s Hillman Imp assembly plant for two decades from the early sixties. The company’s launch there came at the behest of then Prime Minister Harold Macmillan, who thought it would help spread economic prosperity throughout the UK. It did for a while: although industrial disputes were rife during the Linwood plant’s lifetime, its workers were well paid and the town they lived in thrived.
That all changed when Peugot Talbot, which had taken over the factory from Rootes’ successor Chrysler Corporation in 1978, decided to pull out of Scotland at the start of the eighties. Though there were many reasons for the closure of the troubled plant, which had received a multi-million-pound government bailout a few years before, the impact it had on the local area was immense.
Three decades on and the town still hasn’t fully recovered, continuing to be plagued by the poverty and deprivation that followed when thousands of jobs were lost and the shops and businesses they supported were forced to close. Linwood was, as independence-supporting balladeers The Proclaimers would have it, no more thanks to the closure of the Rootes factory.
But Mr Johnson chose not to visit Linwood and he continues to lead us down a no-deal path that will almost certainly see PSA follow through with its threat to shift production away from Ellesmere Port and into Mainland Europe instead. The consequences of following that path promise to be disastrous, not just for the UK car industry but for Mr Johnson’s supposedly precious union too.
Forget Linwood no more, Boris Johnson’s actions are leading us headfirst into so many layers of Britain no more.
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