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Ford Warns Britain No-Deal Brexit Could Mean UK Departure

Automaker tells British PM it could pull up stakes if Brexit goes poorly.

by on Feb.14, 2019

Ford may pull operations from the UK if the Brexit goes poorly, the company warned.

New speculation about Ford Motor Co.’s post-Brexit plans for its operations in the United Kingdom have led to reports that the automaker is preparing to exit the British Isles once the UK leaves the European Union next month.

Ford executives told British Prime Minister Theresa May during a conference call this week that the automaker, which is facing $1 billion in extra costs, may have to move some production out of Britain because of Brexit, a source on the call told the BBC.

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Ford told May it might have to use alternatives sites outside Britain, the BBC’s source – who spoke on condition of anonymity – said.  “They were just making clear that they have other options. This isn’t the only one,” the source said.

The London Sunday Times newspaper earlier reported that Ford told May it was stepping up preparations to move production out of Britain.

(Nissan shifts SUV production from England to Japan due to Brexit. Click Here for the story.)

Ford's Dagenham plant produces diesel engines for much of the company's European operations.

In January, Jaguar Land Rover, the UK’s biggest carmaker, said it would cut 4,500 jobs in the UK, citing geopolitical issues, regulatory disruptions and Brexit uncertainty. Toyota has also urged the government to avoid a no-deal scenario.

Last week, Nissan said it had scrapped plans to build its new X-Trail SUV in Britain and will produce it solely in Japan, adding that uncertainty about Britain’s departure from the EU was making it hard for it to plan for the future.

Ford is the top-selling car brand in Britain, which is its third-largest market and the destination for roughly one in three cars made at its plant in Cologne, Germany. It employs about 13,000 people in Britain.

Carmakers and other manufacturers have warned about the toll a no-deal Brexit could impose, including higher tariffs, disruption to supply chains and threats to jobs. Ford said in a statement it has repeatedly urged the UK government and parliament to avoid leaving the EU without a divorce deal.

“Such a situation would be catastrophic for the UK auto industry and Ford’s manufacturing operations in the country,” the carmaker said. “We will take whatever action is necessary to preserve the competitiveness of our European business.”

(Click Here for details about Jaguar Land Rover’s plans to eliminate 4,500 jobs.)

Ford, which operates two engine plants in Britain, said last month it faces a bill of up to $1 billion if Britain leaves without a deal. May’s conference call with business leaders came after she told parliament that she needed more time to negotiate a revised Brexit deal.

The UK is set to leave the EU March 29, without a deal unless May can convince the bloc to reopen the divorce deal she agreed to in November and then sell it to skeptical British politicians. One of the big sticking points is whether there would be border checks along the frontier between Ireland and Northern Ireland, which is part of the UK.

During the call with May, business leaders were polite, but there were more pointed statements warning about the damage Brexit could cause compared with a similar call May held with executives last month, the BBC source said.

Ford has said a no-deal Brexit would be catastrophic for the firm’s manufacturing operations in the UK and that it would do “whatever is necessary” to protect its business, according to RTE, an Irish Television news service.

(Ford laying off 1,000 workers in Great Britain. Click Here for the story.)

The comments followed a report in the London’s Sunday Times Ford was stepping up preparations to move production out of the UK. Ford declined to comment directly on The Times’ report but said it had long warned against a so-called “hard” Brexit.

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