Brexit Bulletin: Job Cuts Come to Car Country

Dear ATS Readers, Writers,

The irony of political decisions, when government tries to do one thing but creates the opposite.

It is EU politics really, so I couldn't put it in US Political Madness forum...Ha! My best guess I hope is ok.

Anyhow.. not good news at all for what happens to be my most favourite car brand. That happens to be the Mini Cooper.

I own one of the JCW Clubman"s AWD, and am as avid a fan of the Mini driving experience as about anybody could be..so, it kinda struck close to the heart for me..Ha! Those die hard Porsche, BMW, Jaguar, whatever it may be .. "car enthusiasts" can relate to the "guy thing" with bloody cars! Wives usually don't understand it fully..Ha! The ladies reckon we are "nutters" most likely.

In his 50 years working in Britain’s car industry, John Cooper has survived plenty of upheavals. None is scarier than the prospect of Brexit.

Being split off from their biggest market means the job cuts and production slowdown U.K. carmakers have imposed the past few months could be just a prelude to wholesale shutdowns.

The shock is only beginning to hit. Since October, 650 of Cooper’s colleagues have lost their jobs at the factory where Vauxhall Motors churns out Astra hatchbacks. The remaining 1,200 staff worry the plant may close if the U.K. loses tariff-free access to Europe. Across the River Mersey from Vauxhall’s factory, Jaguar Land Rover is planning production cuts.

“People shouldn’t underestimate the dangers that Brexit’s bringing,” Cooper, a union representative, said outside the sprawling factory in the town of Ellesmere Port, near Liverpool, where he’s worked since he was 18. “Why would Nissan continue to invest in the north east when it’s got a plant in Spain where it can build the same car without a 10 percent tariff?”

If Prime Minister Theresa May gets her way, by next year Britain will start severing ties with the bloc after a transition period, including quitting the customs union it’s been part of since 1973. Whether duties are imposed after that is still up in the air as London and Brussels wrangle over the terms of their divorce.

Tariffs and other hurdles to trade could be disastrous for the automotive industry since parts routinely move across borders several times during the manufacturing process. Take the BMW Mini, manufactured in Oxford. Before reaching the production line, each engine crankshaft is made in France, shipped to BMW’s U.K. engine plant in Hams Hall near Birmingham and then to Steyr, Austria for assembly.

Brexit Bulletin: Job Cuts Come to Car Country

Whoa, not good.... and it;s not just my favourite make of car either that is threatened....

It further stated...

The cost of assembling a car in Britain could increase by £2,372 ($3,337) under a scenario where a 10 percent tariff is imposed, according to estimates of London-based PA Consulting. Plant closures are most likely at Japanese-owned Honda Motor Co. and Toyota Motor Corp. since they export most of the cars they make in Britain, it said.

Foreign companies won’t stay “if there is no profitability of continuing operations in the U.K.,” Japan’s ambassador to the U.K., Koji Tsuruoka said earlier this month. “It’s as simple as that. These are high stakes that I think all of us need to keep in mind.”

So, there you go folks... it would seem there is a very good possibility of ruining a large UK business sector, CARS....with the Brexit.

But then again, I understand that the source is a anti-Brexit leaning news source... but that does not take away from the decisions already made, and forthcoming in the UK auto industry..and the most likely increase of thousands of dollars in production costs...

If they had to increase Mini prices by the same amount, their sales, of course; would disappear! As would ANY vehicle made under such price "penalties". People will buy the MUCH less expensive competitors cars; that are getting to be pretty sporty, and fast in their own right.

All of these auto jobs are GOOD paying/providing a solid "middle to upper middle class lifestyle" to the skilled workers who build the cars, and their families. There is also the businesses that service all of these employees who work at these assembly plants, etc. Cafe's, repair shops, clothing, etc, etc..you folks get the gist I am sure.

Unless they are deliberately trying to destroy the UK auto industry.... they need to "make the deals needed" to keep the industry alive for the economy of the UK if for nothing else.

Anyhow, have a read of the whole article, and decide for yourselves..

In my opinion it doesn't bode well. By law, or in "punishment" for leaving the "tribe of former nations", (E.U.)??

Keeping my fingers crossed for my good dearly loved Mini Cooper Works employees.... and all the other car makers..and of course the thousands of jobs that support the finished products.

When my dearly beloved Australia decided to end ALL car manufacturing....it was a sad day for all Oz folks. I think Holden was the last cow to come home to the barn and close it's doors in Oz..

The "collateral damage in jobs lost"; due to the Holden plant shutting down cost thousands more jobs, besides the workers at the Holden assembly plants in Oz! A lot of good people had to scramble to financially survive this "shake up" of all cars stopped being built in Oz.

Good luck UK... you voted, and it was leave...

Now, make the deals to sort this out, or the Conservative Party in the UK will be out of power for a VERY long time I reckon?

Pravdaseeker

Modelling the impact of Brexit (or anything) tends to settle on the worst scenario the modellers can think of. The darkest assumptions and all that. And of course, what is negative for Britain's car makers will also be negative for those within the EU. The Germans don't want to crash their BMW and the French don't want to crash Citroen.

The OP has one error that shows it up as an "everyone panic" article. The darkest days for the UK car industry was when in the late 1970s and early 1980s it all but collapsed under the jackboot of politicised trade unionism, nationalisation and failure.

It will probably be OK. Don't panic!

The Japanese wrote a very strongly worded letter to May a couple of weeks ago too, saying if the UK leaves the customs union, then the Japanese car making plants will be leaving the UK.

Funny how that works out.

Join this economic union. We can work together to make trade deals between ourselves and other trade blocs. It will be prosperity for all. By the way, we're going to have appointed officials from other countries making laws for your country that you have to obey.

What? You don't want to follow the laws other countries make for you? That's too bad. If you want to leave this trade union it will cost you billions of pounds and we will try to tank your industries. I guess you have a choice to make. Do you want national sovereignty or money? Or, more to the point, what do the Bank of England and the City of London want?

a reply to: pravdaseeker

Mini probably will go overseas soon anyway regardless of Brexit. It was a very close call whether BMW were going to build the last variant in the UK or Hungary. Sure they settled for the UK but made it clear any slack in demand in the future would mean taking Mini overseas to a cheaper manufacturing location, Mini can only be profitable if production is always on full bore. Chuck any tariffs on top and it will go overseas. BMW are already using the same Mini platform for other front wheel drive BMW cars................... Why not build them at the same plant?

The Japanese plants will be a massive loss. Maybe the government will subsidise them but then we're back to the days of British Leyland and our taxes going up.

Being in the EU never saved the Ford Transit factory from being moved to Turkey with EU money.

This is all just hot air.

Dear ATS Readers, Writers,

a reply to: paraphi

Thanks paraphi, I do hope you are correct.

The point you make I tried to "touch on" when I said it was from a anti-Brexit publication; that the worst possible outlook was, well possible..Ha!

Surely, there can be a deal made.

If it all goes to rot; then one can be pretty sure it was "planned" that way?

Here's to hoping your words are prophetic for all that would be impacted, and no worst case scenario forms up.

Pravdaseeker

Dear ATS Readers, Writers,

a reply to: Painterz

Thanks Painterz. (One of my best mates at work is from Scotland) 8 years in Australia, and he still can't the word WATER properly..Ha!

That is a bit more supportive of the worst case scenario beginning to form up. At least for the Japanese name brands.

Mr Cooper's remarks obviously reflect from a UK manufacturer viewpoint. He doesn't want to leave the UK. The assembly plant is there in the UK. The Mini brand doesn't have several other assembly plants like the Japanese do.

Pravdaseeker

The UK car industry basically dictates transport policy. We have overcrowded trains everywhere due to Intercity/rural routes becoming suburbanized and commuter routes. Bus services are designed to only be half useful as they are either morning only, afternoon only or just between 9am and 5pm, weekends or weekdays only. So everyone is forced to drive in order to get to work in industrial estates. Other countries make sure every location is served by a combination of train, tram or bus.

On the South coast it's quicker getting to Europe by plane than it is to get into London by train.

a reply to: pravdaseeker

Brexit may have been an emotional ANTI IMMIGRANT move that really in the end may hurt the economy of Britain, at least in the short term.


As an ex- proud UAW autoworker, I sincerely sympathize with my British brothers and sisters being laid off.

I hope they have the same great benefits we had by the power of the great UAW.

Also, I hope the layoff is short

a reply to: pravdaseeker

It could be Brexit fears or it could be due to the global slowdown in new car sales , business doesn't tend to act on speculation about future events they plan for it so laying off workers because of what could or may happen after Brexit doesn't make much sense.