Ford Threatens to Pull Out of the United Kingdom
Ford Motor Company has reportedly informed British Prime Minister Theresa May of its tentative plan to move out of the United Kingdom. The automaker explained the situation to May during a private call with business leaders tasked with assessing how Brexit might impact the economy. Ford said it was already preparing to move its facilities — which include two engine plants, a transmission factory, and an R&D center — abroad.
With the European Union and British government still unable to establish trade terms, automakers are having a panic attack. Ford later told Reuters that a no-deal Brexit would be catastrophic for its European-based businesses, citing earlier claims that it would cost the manufacturer up to $1 billion.
While that cost involves plenty of speculation, Ford thinks the probability of higher tariffs and supply chain issues under a no-deal situation are too high to ignore. In fact, the automaker was already making contingency plans last month after May failed to receive adequate support for her negotiated deal with the EU.
“We have long urged the UK Government and Parliament to work together to avoid the country leaving the EU on a no-deal, hard Brexit basis,” Ford told Reuters on Tuesday. “We will take whatever action is necessary to preserve the competitiveness of our European business.”
Ford previously said it already planned on cutting thousands of jobs and was considering plant closures in Europe as part of its larger restructuring plan. In the absence of a no-deal Brexit, many assumed Britain would receive preferential treatment due to its status as a key market for the company. However, with no trade deal in place, it’s looking increasingly likely that a worst case scenario will come to pass. Britain exits the EU on March 29th.
Automakers know that, until a new arrangement can be made, Britain and the EU will default to World Trade Organization rules — automatically imposing a 10-percent tariff on imports and exports.
[Image: Ford Motor Co.]
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