JAGUAR Land Rover’s top boss has warned ‘a bad Brexit deal’ could cost the company more than £1.2billion a year and put more jobs at risk.
The company’s chief executive officer, professor Dr Ralf Speth has called for ‘greater certainty’ in Brexit negotiations so it can guarantee UK investment amid job losses and falling profits.
The luxury car manufacturer has already attributed heavy cutbacks and disappointing UK sales to Brexit ‘headwinds’ and issues with diesel in the last few months.
The urgent warning comes ahead of the publication of a White Paper outlining the government’s proposed post-Brexit trading relationship with the EU.
Dr Speth said in a press release this morning: “JLR’s heart and soul is in the UK.
“However 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.
“A bad Brexit deal would cost JLR 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.
“For more than 250 years, since the era of Adam Smith, Britain has championed free markets and made the case for free trade.
“If the UK automotive industry is to remain globally competitive and protect 300,000 jobs in JLR and our supply chain, we must retain tariff and customs-free access to trade and talent with no change to current EU regulations.
“Electrification and connectivity offer significant economic and productivity opportunities – get Brexit wrong and British people, businesses and broader society lose the chance to lead in smart mobility.”
The company announced last month it was set to move all production of its Discovery model from Solihull to a new factory in Slovakia.
It also warned of potential job losses as a result of the shift.
At the end of May the company announced a sharp UK sales drop of 13 per cent while European sales also saw a decline of five per cent.
As we reported in April, around 1,000 agency staff were told they would be losing their jobs at JLR’s Lode Lane plant in Solihull.
It also confirmed 350 permanent workers were to be transferred from its Castle Bromwich facility to Lode Lane.
The company has vital ties with mainland Europe which is one of JLR’s largest markets, with 20 per cent of cars being sold there.
More than 40 per cent of parts going into its vehicles are also imported from Europe.
Solihull MP Julian Knight has been lobbying the government for a process to minimise job losses and damage to the West Midlands car industry.
He said: “I have been hosting a series of meeting between JLR and a cross party group of MPs so this statement from the firm’s management does not surprise me at all.
“Clearly, the car industry faces unique challenges with brexit and we must work to achieve a deal which means as frictionless trade as possible with the EU and that is precisely what the Prime Minister is trying to achieve.”
Leading trade union GMB has also spoken out about the announcement.
Stuart Richards, GMB senior organiser, said: “The government is still spending more time squabbling with each other rather than listen to real warnings from industry.
“Our members at JLR do skilled jobs with decent pay and contribute millions to the real economy.
“We cannot afford to lose JLR and its supply chain – it would be an economic car crash.
“The best thing that could come out of the Prime Minister’s get-together at Chequers is a clear commitment to the UK being part of a customs union with Europe.
“This government needs to start thinking of the lives of Britain’s workers – and their families – rather than internal Tory party bickering.”
Rebecca Long Bailey MP, Labour’s Shadow Business Secretary, said: “This stark warning from one of the jewels in the crown of British automotive manufacturing should be a klaxon call to Theresa May and her cabinet.
“They cannot continue to spar with each other and play ideological games whilst British jobs and industries are being pushed off the edge of a cliff.
“Uncertainty is already hurting investment and if the Government cannot provide urgent assurances to business on negotiating a deal that secures frictionless trade with the EU, our biggest export market, 40,000 jobs at Jaguar Land Rover and countless supply chain businesses could be lost in the blink of an eye.
“In the West Midlands the Jaguar Land Rover plants at Wolverhampton, Solihull, Castle Bromwich and Coventry employ hundreds of thousands of workers – and they may now pay the price with their jobs.
“This would be devastating for our world leading automotive sector along with the communities that support them.”