Saturday, 30 May 2015

Automakers Rage Against UK’s Possible ‘Brexit’ From EU

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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