UK plants and at least 40,000 jobs are at risk if the country leaves the European Union without a free trade deal, Britain’s biggest carmaker has warned.
Jaguar Land Rover (JLR) has told the government that, while its “heart and soul” are in the UK, a bad Brexit could force a re-think, with a “no-deal” scenario forcing it out of the UK because of an expected £1.2bn surge in tariff costs.
JLR exports 80% of its cars worth £18bn annually.
Dr. Ralf Speth, chief executive of JLR, said: “We, and our partners in the supply chain, face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market.
“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers, and 40,000 British-based employees.”
There are also a further 260,000 jobs connected to the company’s supply chain.
Dr. Speth added: “A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year.
“As a result, we would have to drastically adjust our spending profile.
“We have spent around £50bn in the UK in the past five years, with plans for a further £80bn more in the next five.
“This would be in jeopardy should we be faced with the wrong outcome.”
He was more specific on a potential exit from the UK in comments to the Financial Times when he said: “If I’m forced to go out because we don’t have the right deal, then we have to close plants here in the UK and it will be very, very sad.
“This is hypothetical, and I hope it’s an option we never have to go for.”
Airbus said in June that it was making plans to leave the UK in the event of a no-deal Brexit, which could lead to the loss of tens of thousands of jobs.
BMW also weighed in – its customs manager Stephan Freismuth warning the company “cannot” manufacture its products in the UK if Brexit means its supply chain is disrupted.
The intervention by big business in the Brexit debate has strained relations with the government ahead of Theresa May’s meeting of cabinet ministers at Chequers on Friday to decide a strategy for exiting the EU.
Health Secretary Jeremy Hunt has described, what he sees as, threats from firms as “completely inappropriate” while Boris Johnson, a leading Brexiteer on the top table of government, has not denied saying “f*** business”.
In his response to JLR’s latest warning, the business secretary Greg Clark tweeted: “JLR is a great British success story. We are determined to make sure that it can continue to prosper and to invest in Britain.”
The PM has also insisted firms are being listened to.
The British Retail Consortium became the latest to warn of the consequences of any cliff-edge Brexit in March 2019 by warning that consumers in the UK and EU food producers would lose out if there was no deal to allow the free movement of goods.
Its chairman, Richard Pennycook, said: “Frictionless trade is essential if the industry is to continue to provide the level of choice and value in shops that UK consumers are used to seeing.
“It is now of the utmost importance that the UK Government proposes a workable solution to the backstop that gets the withdrawal agreement over the line and allows for a smooth transition.
“We need the EU to be flexible and creative in negotiation and recognize what is at stake for exports to the UK.”