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Thursday, October 04, 2018

The threat to manufacturing jobs

The Tories may well be keen to play down the impact of Brexit on the economy and on jobs as 'Project Fear' but it is not just politicians who are sounding off about this, it is the men and women who actually make the decisions, and who have the fate of people's jobs in their hands.

And so, as the Guardian reports, the Japanese carmaker Nissan has warned the government that serious disruption will be caused to its huge manufacturing operation in the north-east of England if the UK fails to secure a deal with the EU that avoids a hard Brexit:

Carlos Ghosn, the chair of Nissan, has described its British operations as “a European investment based in the UK”, which employs almost 8,000 people, mostly at its factory near Sunderland. A further 30,000 people are employed in UK companies supplying Nissan.

Like the other car manufacturers that use the UK as a base for exporting to the EU, Nissan relies on rapid, “just in time” importing of millions of components from the EU every day, with no customs delays or tariffs.

A hard Brexit – if the government has not agreed to a customs union or common standards to allow free movement of goods – would result in trading with EU countries on World Trade Organization rules, which apply 4.5% tariffs to car parts and 10% to finished cars.

Colin Lawther, a Nissan executive, told the House of Commons international trade committee in February 2017 that tariffs would add £500m to the plant’s costs, which it might not survive, and that long delays of parts at borders would be a disaster for the operation.

In a statement to the Guardian authorised by the main board in Japan, Nissan said: “Since 1986, the UK has been a production base for Nissan in Europe. Our British-based research and development and design teams support the development of products made in Sunderland, specifically for the European market.

“Frictionless trade has enabled the growth that has seen our Sunderland plant become the biggest factory in the history of the UK car industry, exporting more than half of its production to the EU.

“Today we are among those companies with major investments in the UK who are still waiting for clarity on what the future trading relationship between the UK and the EU will look like. As a sudden change from those rules to the rules of the World Trading Organization will have serious implications for British industry, we urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.”

As the Guardian says, it is a sign of alarm at senior levels that Nissan has issued a statement, as the company has been restrained in public since the June 2016 referendum. Businesses do not rate a World Trade Organisation solution as workable despite it being embraced by many Tories. And for many, it is looking increasingly likely that this will be our ultimate destination.

If that is the case then it will be disastrous for the UK economy, disastrous for jobs and devastating for our standards of living.
4 and a half % plus 10% equals a huge rise in costs . Companies NOT ONLY CARS that may have to pay this will think twice about staying in the UK. They will go where casts can be managed.Today companies are global and if not in a secure base will up sticks and move to a more secure base. Govnt gives a'carrot' to stay that will more likely cost the country AND THEREFORE ALL OF US will take a hit. BREXIT IS A DISASTER IN WAITNG.
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