By on May 29, 2015

Jaguar F-Type S AWD

A handful of European automakers are lashing out against the prospect of the United Kingdom’s “Brexit” from the European Union via referendum in 2017.

Ford Europe, Renault-Nissan and BMW have made it known there would be serious ramifications for the European auto industry and the U.K.’s role in it if the nation left the E.U. following the results of a referendum vote in 2017, The Detroit News reports. Both Ford Europe CEO Jim Farley and BMW board member Ian Robertson have said the U.K. should remain in the union for the sake of the nation’s auto industry, while Renault-Nissan CEO Carlos Ghosn said he would have to reconsider his company’s dealings across the Channel if the so-called Brexit became reality.

However, the trio of automakers, as well as the European Automobile Manufacturers’ Association (ACEA), may be doing more harm to themselves by joining in the political conflict than anything the Brexit could muster upon execution. Garel Rhys, emeritus professor of Motor Industry Economics and director for Automotive Industry Research at the Cardiff Business School, explains:

It’s possible I suppose that there could be a massive trade war, with protection and trade barriers but I think that’s very unlikely. Firstly the WTO (World Trade Organization) would have a view on that. But much more importantly, Britain has a huge balance of trade deficit with the rest of the E.U.. It’s a tremendous market for E.U. countries for a whole range of goods and especially for upmarket BMWs, Audis and Porsches.

Rhys adds a free trade agreement following the Brexit would be “very, very likely” and in the best interests of both parties, saying fear of change is the main driver for the automakers opposed to the U.K.’s departure. Cimigo analyst Michael Burrage agrees with the assessment, stating the opposition should have done more research into the Brexit and its effects before sounding the alarm:

Companies with serious interests at stake should conduct risk assessments and ask if these serious consequences are likely. I don’t believe they have taken serious studies. I believe exit would be far less disturbing than these large manufactures would wish us to believe, and they need to do studies. I would listen more seriously if they showed some research. This is just off the top of their heads. It is very superficial>

The Brexit referendum in 2017 comes amid increasing disapproval among Britons with how a trade agreement approved in a 1975 referendum became loaded with political ramifications over the decades to the point, according to the U.K. Independence Party, where 70 percent of all legislation in the U.K. comes from Brussels.

[Source: Jaguar]

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22 Comments on “Automakers Rage Against UK’s Possible ‘Brexit’ From EU...”

  • avatar

    F*** the EU – A certain Assistant Secretary of State under Hillary Clinton.

  • avatar
    Felix Hoenikker

    Since the UK retained its currency, leaving the EU is much easier for them than the countries on the Euro.

  • avatar

    In reply to Felix

    Alright, I was wondering if the UK still used their own currency, I still hear people talk about the pound yet I knew the UK was part of the EU.

    • 0 avatar

      Yes they use the pound because it is stronger. I was there last fall and the $/pound was something like 1.6/1 while the $/euro was 1.3/1.

      • 0 avatar

        A gallon isn’t stronger than a liter just because it is a larger unit of measure. The same thing applies to currencies.

        • 0 avatar

          That’s a strange analogy. A gallon of fuel will get you farther than a liter/litre.

          • 0 avatar

            The analogy is on point.

            A gallon is larger than a liter, not superior to a liter. It’s not stronger or weaker or better or worse, just different.

            Currency strength is not a function of how many currency units are equal to one dollar. The Japanese yen is not weaker than the British pound because there are more of them to one US dollar.

  • avatar

    The UK joined the EU because they were terrified of American manufacturing, which has proved to be an unfounded fear now that our manufacturing sector is sagging. Since they refused to join the Eurozone, they’ve always had one foot in the EU and the other foot out of the EU.

    If the UK is smart, they’ll drop out, and recreate the trade relations with their former colonies that allowed them to acquire cheap foodstuffs and raw materials.

  • avatar

    Sweden and Denmark also retained their own currencies. Either way, I don’t see how this would be such a disaster if they left. For the EU maybe. Euro-propaganda?

    • 0 avatar

      Seems to work for the Swiss, who have side deals with the EU…

    • 0 avatar

      I think the UK being outside of the EU would give it a lot of leverage in trade renegotiations. Especially with the EU’s trade deficit to it.

      Ultimately though the Euro QE bukkake party has already begun, w/the Euro sliding like 15% against the GBP over the last year. Thats that much more profit for all these EU based manufacturers selling to one of the few European economic strongholds, and I’m sure if the Brexit happens that slide will only continue further. I agree that manufacturers are being a bit hyperbolic and short sighted.

  • avatar

    The scaremongering has started, hasn’t it?

    Britain will not exit the EU.

    After the successful and fraudulent Scottish referendum David Cameron feels confident enough to deliver another safe result on EU.

    Why do I say the Scottish referendum was fraudulent? When the Parliament bill was pass ordering the referendum it included a clause saying the result could not be challenge and that there would not be a recount! Banana republic style. And people bought it. Most people in Scotland want independence but they were scared of having it when they had the chance?

    Now is for the Brexit. David Carmeron’s own Chancellor of Exchequer George Osborne has not only been a regular attendee at the Bilderberg meetings he has actually been a member of it’s steering committee. Cameron’s referendum will again deliver the result that his globalist masters want. Britain will stay in the EU.

    And the “result” of the referendum will, like in Scotland, consolidate the status quo.

    • 0 avatar

      The oligarchs might want to shake things up a bit though and allow a positive vote on an exit if it suited their interests. Scotland could have gotten unmanageable for them had it been allowed to succeed.

    • 0 avatar

      “Cameron’s referendum will again deliver the result that his globalist masters want.”

      Maybe, but my understanding is that the referendum is intended by parties like UKIP to stoke and capitalize upon resistance to the EU’s centralized control of immigration policy within the EU and irrespective of national borders.

      This could be one of the largest racially focused national events since Apartheid, pulling huge numbers of aggrieved Brits along through overt concerns over illegal immigration piggybacking upon “legitimate” movement across borders, and the covert appeal of keeping what’s left of Great Britain white.

      Continual news of yet more boatloads of North Africans depositing themselves upon the continent for arbitrary dispersal within the EU by Brussels can’t but help inflame popular sentiment.

      Or I’ve completely misunderstood the issue. Either way, it should be worth some Orville Redenbacher.

      • 0 avatar

        I think you have indeed misunderstood the issue RideHeight. Corporate media will want you to believe that this is an issue fuel by the rasist UKIP but is a lot older that the UKPI it self.

        A great deal of the UK population have question the value of being part of the EU when the price is the sovereignty of their own country since the very begging of the EU.

        And since the very begging every body oppose to join has been labeled racist or having and insular mentality or little Englander and so on.

        But this is just the big corporations flexing their muscle through their media outlets to ridicule any one that does not want what they want.

        The anti EU sentiment is running all over the EU not only the UK, and with good reason.

        Look at the results.

        The biggest beneficiary have been the big banks.

        Only a resist fool would want to change this.

        • 0 avatar

          First, the charge of racism does not immediately engage a conditioned reflex in me.

          Second, butter and salt with yours?

          • 0 avatar

            My respond to your post was in no way referring to you personally but to the policy of ridicule that the corporate media systematically uses to discredit any one who might oppose the goal of their masters.

            If my comments were over your head my apology.

      • 0 avatar

        Cameron won the last election by promising the immigrant bashers that they could have their referendum if they voted for the Conservatives. He’s probably hoping that the whole thing loses momentum in two years’ time (as indeed it should, given how dumb that the whole thing is.) Trade isn’t much of an issue here; it’s about immigration.

        • 0 avatar
          Big Al from Oz

          There are three types of basic attitudes toward immigrants.

          1. The anti immigration or “all white”. I find these types the most distasteful.

          2. The “let everyone in” types.

          3. The more moderate like myself. Australia has a great immigration policy which I support.

          We have one of the highest levels of immigration in the world, much higher than the US and even Canada.

          But, I don’t want economic refugees who come to Australia using the back door. These people should be put straight onto a plane and sent back to their country of origin.

          As you can see for a government to set a immigration policy is hard as you will not please the a certain group.

          Also, the UK is worried about the EU’s idea of pushing all European nation to accept the Africans. I do believe in sinking and the turning around of boats.

          The people smugglers are placing many thousands of lives at risk around the world.

          These people must be stopped as many or most of these refugees are economic, not political.

          The UK has every right to reassess its stance on immigration. As I pointed out the EU is trying to molly cottle the African/Mediterranean situation, rather than stop it.

          The US has done the same with the economic refugees from Latin America. Turn them around and send them back to Mexico, then let Mexico do the same until they are home.

          If they were political, house them until it is safe to send them home.

  • avatar
    Big Al from Oz

    If the UK leaves the EU this will not impact the auto industry.

    The only issue I can see if the UK “succeeds” from the EU is if anti competitive tariffs are put in place. This isn’t viable as well as the WTO will not like this very much and the UK does tend to tow the WTO line.

    The auto makers especially the German’s don’t like this as the Germans are the largest EU vehicle manufacturers.

    Ghosn and the other manufacturers are playing politics.

    Ghosn should be more worried about the interventionist French government than a free market like the UK.

  • avatar

    As the article pointed out, the UK leaving the EU will simply result in trade agreements taking the place of membership, with the UK free of EU regulations. In any event, the timing is important, since any time in 2017 will be in the middle of elections on the continent, and moving up to 2016 will put it in the middle of the US presidential election.

    From a political standpoint, earlier is better, since the glow and clout of an election victory fades over time. The Tories have already said 2017 is a deadline, not a date, and have already begun the process of setting up the referendum. If the House of Lords holds up the issue, the earliest date would be July 2016, or more likely September, when the US election is in full swing. If the Lords agree, the referendum could occur as early as next Spring.

    At any rate, the UK is too lucrative a market for the EU to throw up the trade barriers automakers and other industrial and financial interests fear.

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