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Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

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BobbyD
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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147653

Postby BobbyD » June 24th, 2018, 11:13 am

johnhemming wrote: Moving country involves substantial investment hence it is only new investment that would be affected at this stage.


Anybody whose components and parts need to be certified as with Airbus, or who use JIT manufacturing like BMW will be considering more than future investment.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147655

Postby johnhemming » June 24th, 2018, 11:17 am

True, but actually spending money will be a different issue.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147658

Postby BobbyD » June 24th, 2018, 11:47 am

johnhemming wrote:True, but actually spending money will be a different issue.


I'm not sure it will be. If you are Airbus, and each new plane you build requires certified parts in order to be considered airworthy and the supplier of significant parts of those planes was messing about with one foot inside a certified area and one foot outside a certified area what would you do? They are going to incur costs no matter what the outcome, money has already been lost, it's just a matter of how much and how you spend in order to mitigate further losses.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147673

Postby vrdiver » June 24th, 2018, 12:27 pm

Warning: conspiracy theory ramble... no factual content.

What are the chances that at least one major company has investigated relocating to rEU, with discussions re "sweeteners" with various tax regimes?

The political point-scoring, jobs etc might very well tempt say, Spain, France etc. to offer a good deal to any companies who's management think Brexit is going to harm their business. All's fair in love and war...

On a less paranoid thought (albeit, only just) why would the rEU rush to agree any deal with the UK if the consequences of no deal or continued uncertainty around any deal might be the transfer of jobs out of the UK and into rEU? Such an effect would indeed help "encourager les autres".

VRD

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147675

Postby dspp » June 24th, 2018, 12:45 pm

VRD,

When relocating a business it is just like punting in the market: fear and greed. Both motivations apply. Businesses are already relocating aspects out of fear, that is real. As they do so they shop around out of greed, that is natural.

I would hazard a guess that if anything less soft than EEA/EFTA is the outcome, then the next significant Airbus wings investment will go to Spain. One of my young aero-engineers is now in Madrid, and the UK does not have a monopoly on wing-design & mf knowledge. Ditto RR is moving and hedging its bets already, most especially to Germany. These decisions will be hard to reverse, even if there were a will to do so which most likely there will not be.

The cork is already out the bottle and the brown smelly stuff is already spraying around causing problems.

However I do not expect the UK to be allowed to have a plain vanilla sign-up to EEA/EFTA. The rEU are only too aware that would create another attempt by the pro-Brexit lot to whip another anti-EU cycle, because it has weak protections against that. So if the UK comes to its senses and seeks EEA/EFTA then it will find a different flavour on offer.

regards, dspp

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147679

Postby ursaminortaur » June 24th, 2018, 12:57 pm

dspp wrote:VRD,

When relocating a business it is just like punting in the market: fear and greed. Both motivations apply. Businesses are already relocating aspects out of fear, that is real. As they do so they shop around out of greed, that is natural.

I would hazard a guess that if anything less soft than EEA/EFTA is the outcome, then the next significant Airbus wings investment will go to Spain. One of my young aero-engineers is now in Madrid, and the UK does not have a monopoly on wing-design & mf knowledge. Ditto RR is moving and hedging its bets already, most especially to Germany. These decisions will be hard to reverse, even if there were a will to do so which most likely there will not be.

The cork is already out the bottle and the brown smelly stuff is already spraying around causing problems.

However I do not expect the UK to be allowed to have a plain vanilla sign-up to EEA/EFTA. The rEU are only too aware that would create another attempt by the pro-Brexit lot to whip another anti-EU cycle, because it has weak protections against that. So if the UK comes to its senses and seeks EEA/EFTA then it will find a different flavour on offer.

regards, dspp


Barnier has repeatedly said that he would welcome the UK joining the EEA if it wishes. There is a problem with being in the EEA and also a EU customs union since currently to be in the EEA you need to be in Efta and Efta rules say that any customs union can only be with another Efta member rather than EU members. However there are probably ways around that and Barnier seems to think that would also be possible

https://www.independent.co.uk/news/uk/politics/brexit-latest-uk-eu-customs-union-eea-trade-michel-barnier-labour-a8395671.html

Michel Barnier said on Tuesday in a meeting with MEPs at the European Parliament that the European Economic Area (EEA) with a customs union was a possible model for a future relationship, and that the two were not incompatible.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147684

Postby BobbyD » June 24th, 2018, 1:06 pm

vrdiver wrote:On a less paranoid thought (albeit, only just) why would the rEU rush to agree any deal with the UK if the consequences of no deal or continued uncertainty around any deal might be the transfer of jobs out of the UK and into rEU? Such an effect would indeed help "encourager les autres".



If that were the case you'd really have to question the intelligence of a country which allowed it's government to sit down to decide what it wanted out of leaving 18 months after the country voted to leave and 12 months after issuing A50 notice of intent to leave...

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147692

Postby dspp » June 24th, 2018, 1:48 pm

ursaminortaur wrote:
dspp wrote:
However I do not expect the UK to be allowed to have a plain vanilla sign-up to EEA/EFTA. The rEU are only too aware that would create another attempt by the pro-Brexit lot to whip another anti-EU cycle, because it has weak protections against that. So if the UK comes to its senses and seeks EEA/EFTA then it will find a different flavour on offer.

regards, dspp


Barnier has repeatedly said that he would welcome the UK joining the EEA if it wishes. There is a problem with being in the EEA and also a EU customs union since currently to be in the EEA you need to be in Efta and Efta rules say that any customs union can only be with another Efta member rather than EU members. However there are probably ways around that and Barnier seems to think that would also be possible

https://www.independent.co.uk/news/uk/politics/brexit-latest-uk-eu-customs-union-eea-trade-michel-barnier-labour-a8395671.html

Michel Barnier said on Tuesday in a meeting with MEPs at the European Parliament that the European Economic Area (EEA) with a customs union was a possible model for a future relationship, and that the two were not incompatible.


You are correct that the rEU has repeatedly signalled its preferred least-damaging Brexit as being EEA/EFTA. However you have only to read the North et al blogging to note that they view that as a stage along a journey to a fuller Brexit. The rEU are not without eyes and ears, and so I expect that if the UK were to ever seek a EEA/EFTA outcome, then the rEU would add in provisions to deter a further future Brexit cycle of distractions. So even if the UK faces down the alt-R lot, then I suspect the deal that could have been reached two years ago will no longer be on offer. And that's the most positive short term outlook I can have right now.

The less positive outlook is the accidental cliff-edge that the alt-R are hoping for. No preparation, just crash out. That would make the 4-day fuel protests (https://en.wikipedia.org/wiki/Fuel_prot ... ed_Kingdom) and the ERM ejection (https://en.wikipedia.org/wiki/Black_Wednesday) look like a walk in the park. I personally think this would be better for the peoples of the UK in the longer term as it would cause them to appreciate the consequences of foolishness at a much more personal level, however it is debatable whether the UK itself would survive for very long on this pathway as the short term consequences could be pretty unsavoury. However, in my opinion, the consequences would be limited primarily to the UK as others would not stand idly by and would (and can) act to reduce their dependencies on the UK in such a scenario.

regards, dspp

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147943

Postby BobbyD » June 25th, 2018, 5:15 pm

BMW will be forced to close its UK plants if the company cannot quickly and reliably import components from mainland Europe after Britain leaves the EU, one of the German carmaker’s senior directors has warned.


- https://twitter.com/FT/status/1011263544455782400

In other auto trade news Harley Davidson are moving output to non-US factories to avoid paying targeted retaliatory EU import duty.

Harley to Move Some Production Out of U.S. to Avoid EU’s Tariff


- https://www.bloomberg.com/news/articles ... er-tariffs

Trump's India first policy is working out nicely, Harley will benefit both from avoiding the effect of Trump's steel tariffs on their raw materials and the EU's bike tariffs. Make India Great Again! Politicians should be kept as far away from the setting of trade rules as is humanly possible.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147952

Postby ursaminortaur » June 25th, 2018, 6:06 pm

BobbyD wrote:
BMW will be forced to close its UK plants if the company cannot quickly and reliably import components from mainland Europe after Britain leaves the EU, one of the German carmaker’s senior directors has warned.


- https://twitter.com/FT/status/1011263544455782400


From the FT

https://www.ft.com/content/b6a382f2-787d-11e8-8e67-1e1a0846c475?tagToFollow=19b95057-4614-45fb-9306-4d54049354db

In the starkest statement yet by BMW over the future of its UK operations, customs manager Stephan Freismuth said delays in importing components would seriously affect its British facilities, which include the flagship plant making the Mini.“We always said we can do our best and prepare everything, but if at the end of the day the supply chain will have a stop at the border, then we cannot produce our products in the UK,” he added.
.
.
.
More than 80 per cent of Minis and 90 per cent of Rolls-Royce cars are exported, while the Hams Halls plant despatches engines to several BMW factories in Germany.Like many British car plants, BMW’s UK factories rely heavily on imported components.About 90 per cent of the parts used in the company’s British plants come from mainland Europe, and BMW has previously warned of the need for contingency plans if Brexit results in components being held at the border due to lengthy customs checks.


and a number of other foreign business leaders are warning of the loss of £100bn in trade if brexit isn't sorted out soon

https://www.theguardian.com/politics/2018/jun/25/foreign-businesses-tell-uk-solve-brexit-issue-or-risk-100bn-in-trade

Business leaders from the US, Canada, Japan and India have told the British government to solve the Brexit issue urgently or put more than £100bn worth of trade at risk.
.
.
.
Groups representing corporate giants including Nissan, Bombardier and Facebook expressed their concerns on Monday that Britain was heading towards a disorderly departure from the EU, potentially affecting more than £100bn in trade and putting investment in the UK at risk.
“International businesses who are heavily invested in both the EU and the UK are calling for urgent progress on the key outstanding issues remaining in the talks,” they said in the statement. “Resolving as many of the remaining concerns as possible is becoming more urgent by the day – with the clock ticking towards the October deadline for a final withdrawal agreement.”
The statement was signed by the American Chamber of Commerce to the EU, representing companies including Boeing, Exxon Mobile, Facebook, Dell, Coca-Cola and FedEx. It was also signed by the Canada Europe Roundtable for Business, Europe India Chamber of Commerce and the Japan Business Council in Europe.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147959

Postby beeswax » June 25th, 2018, 6:40 pm

ursaminortaur wrote:
BobbyD wrote:
BMW will be forced to close its UK plants if the company cannot quickly and reliably import components from mainland Europe after Britain leaves the EU, one of the German carmaker’s senior directors has warned.


- https://twitter.com/FT/status/1011263544455782400


From the FT

https://www.ft.com/content/b6a382f2-787d-11e8-8e67-1e1a0846c475?tagToFollow=19b95057-4614-45fb-9306-4d54049354db

In the starkest statement yet by BMW over the future of its UK operations, customs manager Stephan Freismuth said delays in importing components would seriously affect its British facilities, which include the flagship plant making the Mini.“We always said we can do our best and prepare everything, but if at the end of the day the supply chain will have a stop at the border, then we cannot produce our products in the UK,” he added.
.
.
.
More than 80 per cent of Minis and 90 per cent of Rolls-Royce cars are exported, while the Hams Halls plant despatches engines to several BMW factories in Germany.Like many British car plants, BMW’s UK factories rely heavily on imported components.About 90 per cent of the parts used in the company’s British plants come from mainland Europe, and BMW has previously warned of the need for contingency plans if Brexit results in components being held at the border due to lengthy customs checks.


and a number of other foreign business leaders are warning of the loss of £100bn in trade if brexit isn't sorted out soon

https://www.theguardian.com/politics/2018/jun/25/foreign-businesses-tell-uk-solve-brexit-issue-or-risk-100bn-in-trade

Business leaders from the US, Canada, Japan and India have told the British government to solve the Brexit issue urgently or put more than £100bn worth of trade at risk.
.
.
.
Groups representing corporate giants including Nissan, Bombardier and Facebook expressed their concerns on Monday that Britain was heading towards a disorderly departure from the EU, potentially affecting more than £100bn in trade and putting investment in the UK at risk.
“International businesses who are heavily invested in both the EU and the UK are calling for urgent progress on the key outstanding issues remaining in the talks,” they said in the statement. “Resolving as many of the remaining concerns as possible is becoming more urgent by the day – with the clock ticking towards the October deadline for a final withdrawal agreement.”
The statement was signed by the American Chamber of Commerce to the EU, representing companies including Boeing, Exxon Mobile, Facebook, Dell, Coca-Cola and FedEx. It was also signed by the Canada Europe Roundtable for Business, Europe India Chamber of Commerce and the Japan Business Council in Europe.


They are talking to the wrong people. Its the EU they should be warning as its actually NOT the UK holding up a trade deal but them.

And if as its suggested that 90% of all the parts used our car factories come from the EU then that confirms they are as stupid as they sound..

So how much of that 100bn will be a loss to the EU and how much to the UK...That is the question.

We would have had a trade deal by now if the EU was more business orientated instead of political orientated and why having politicians negotiating the bilateral trade relationship were exactly the wrong people on both sides of the table..

Any blame should be vented at the ones who are holding things up and that has always been the EU despite getting all the concessions.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147962

Postby Sundance13 » June 25th, 2018, 6:56 pm

beeswax wrote:
ursaminortaur wrote:


From the FT

https://www.ft.com/content/b6a382f2-787d-11e8-8e67-1e1a0846c475?tagToFollow=19b95057-4614-45fb-9306-4d54049354db

In the starkest statement yet by BMW over the future of its UK operations, customs manager Stephan Freismuth said delays in importing components would seriously affect its British facilities, which include the flagship plant making the Mini.“We always said we can do our best and prepare everything, but if at the end of the day the supply chain will have a stop at the border, then we cannot produce our products in the UK,” he added.
.
.
.
More than 80 per cent of Minis and 90 per cent of Rolls-Royce cars are exported, while the Hams Halls plant despatches engines to several BMW factories in Germany.Like many British car plants, BMW’s UK factories rely heavily on imported components.About 90 per cent of the parts used in the company’s British plants come from mainland Europe, and BMW has previously warned of the need for contingency plans if Brexit results in components being held at the border due to lengthy customs checks.


and a number of other foreign business leaders are warning of the loss of £100bn in trade if brexit isn't sorted out soon

https://www.theguardian.com/politics/2018/jun/25/foreign-businesses-tell-uk-solve-brexit-issue-or-risk-100bn-in-trade

Business leaders from the US, Canada, Japan and India have told the British government to solve the Brexit issue urgently or put more than £100bn worth of trade at risk.
.
.
.
Groups representing corporate giants including Nissan, Bombardier and Facebook expressed their concerns on Monday that Britain was heading towards a disorderly departure from the EU, potentially affecting more than £100bn in trade and putting investment in the UK at risk.
“International businesses who are heavily invested in both the EU and the UK are calling for urgent progress on the key outstanding issues remaining in the talks,” they said in the statement. “Resolving as many of the remaining concerns as possible is becoming more urgent by the day – with the clock ticking towards the October deadline for a final withdrawal agreement.”
The statement was signed by the American Chamber of Commerce to the EU, representing companies including Boeing, Exxon Mobile, Facebook, Dell, Coca-Cola and FedEx. It was also signed by the Canada Europe Roundtable for Business, Europe India Chamber of Commerce and the Japan Business Council in Europe.


They are talking to the wrong people. Its the EU they should be warning as its actually NOT the UK holding up a trade deal but them.

And if as its suggested that 90% of all the parts used our car factories come from the EU then that confirms they are as stupid as they sound..

So how much of that 100bn will be a loss to the EU and how much to the UK...That is the question.

We would have had a trade deal by now if the EU was more business orientated instead of political orientated and why having politicians negotiating the bilateral trade relationship were exactly the wrong people on both sides of the table..

Any blame should be vented at the ones who are holding things up and that has always been the EU despite getting all the concessions.



Funny I don’t recall having seen the overdue Govt white paper, setting out what it wants from it’s future relationship with the EU?

As for the rest do you mean the EU should be business orientated like ourselves? The country that voted to leave the EU for political reasons, tells business to be more patriotic and hide the truth (J Hunt) or says business can f**k off (Boris Johnson)? People in glass houses Mike.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147977

Postby vrdiver » June 25th, 2018, 7:32 pm

beeswax wrote:They are talking to the wrong people. Its the EU they should be warning as its actually NOT the UK holding up a trade deal but them.

And if as its suggested that 90% of all the parts used our car factories come from the EU then that confirms they are as stupid as they sound..

So how much of that 100bn will be a loss to the EU and how much to the UK...That is the question.

Mike,

The warning is from US, Canada, Japan and India. It's about their trade with us. If part of that trade is then used to trade with the EU, that would damage our exports, and we already have a trade deficit with the EU, so not a very good thing. Also, a lot of the companies that might be impacted would be able to work around the issue, although the UK would get hurt some more in the process. E.g. if BMW (who export more than 80% of their UK made Minis) have a problem with Brexit, they will move production to another BMW factory outside of the UK. Then they don't need to ship components into the UK, nor do they need to export cars out. Ditto Rolls Royce. The country that will get hurt is the UK.

We do have a trade surplus with the EU, so you'd think that any messing around at the borders would hurt them more than us. It will, if you look at imports vs exports alone, but that's irrelevant: you need to look at the % of trade that each country has with the UK, not what the EU has, as it will be at a country level (e.g. France's pain vs UK's pain, Germany's pain vs UK's pain etc). At that point you'll realise that whilst each country in the EU is going to feel some pain, the UK is going to feel the aggregated pain that we feel with each individual country (i.e. 27 doses of pain, vs each of them having only one dose of pain).

I'd love for the EU to reach out and offer us an acceptable deal, but they are pretty unlikely to do so. As we get closer to the A50 deadline, attitudes may well harden. Already we are hearing quotes like
The UK, first they wanted in with opt-outs, now they want out with opt-ins
Patience is wearing down as we are consuming a lot of time that the EU would be better off spending on issues like mass migration and border management etc.

Perhaps Brexit could have been delivered with a better team. Perhaps the current team will put a rabbit out of the hat yet. If we continue as we are, there will likely be rather more pain than necessary, for both sides. Pain that means lost jobs, houses repossessed, all the things that happen in a recession. Things that didn't have to happen if our leaders had actually thought through a plan before pushing the A50 button.

VRD.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#147979

Postby BobbyD » June 25th, 2018, 7:37 pm

beeswax wrote:They are talking to the wrong people. Its the EU they should be warning as its actually NOT the UK holding up a trade deal but them.


Look on the bright side, you always said the government would cave under pressure form German car makers, you just picked the wrong government!

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#148111

Postby BobbyD » June 26th, 2018, 11:57 am

Car manufacturers have warned Theresa May there is “no Brexit dividend” for the industry, with 860,000 jobs being put at risk unless the government “rethinks” its red lines in negotiations.

In the starkest warning yet from a single business sector, the car lobby has told the government that it needs “as a minimum” to remain in the customs union and a deal that delivers “single market benefits”.

“There is no Brexit dividend for our industry,” Michael Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said.

...

The sector had grown for the eighth successive year with turnover at a record £82bn in 2017. However, it said 2018 has showed a slowdown in output, with investment earmarked for new models, equipments and facilities in the UK halving to about £347m.


- https://www.theguardian.com/politics/20 ... r-industry

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#148124

Postby Ashfordian » June 26th, 2018, 12:49 pm

BobbyD wrote:
Car manufacturers have warned Theresa May there is “no Brexit dividend” for the industry, with 860,000 jobs being put at risk unless the government “rethinks” its red lines in negotiations.

In the starkest warning yet from a single business sector, the car lobby has told the government that it needs “as a minimum” to remain in the customs union and a deal that delivers “single market benefits”.

“There is no Brexit dividend for our industry,” Michael Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said.

...

The sector had grown for the eighth successive year with turnover at a record £82bn in 2017. However, it said 2018 has showed a slowdown in output, with investment earmarked for new models, equipments and facilities in the UK halving to about £347m.


- https://www.theguardian.com/politics/20 ... r-industry


The SMMT were predicting armeggeddon for the car industry if we voted to leave. Yet 2016 & 2017 were record years.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#148125

Postby XFool » June 26th, 2018, 12:53 pm

Ashfordian wrote:The SMMT were predicting armeggeddon for the car industry if we voted to leave. Yet 2016 & 2017 were record years.

OK. So years 2016 & 2017, when we were in the EU, were "record years" for the car industry?

Guess we'll have to wait and see what the years 2019 & 2020 are like.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#148127

Postby anticrank » June 26th, 2018, 1:13 pm

XFool wrote:
Ashfordian wrote:The SMMT were predicting armeggeddon for the car industry if we voted to leave. Yet 2016 & 2017 were record years.

OK. So years 2016 & 2017, when we were in the EU, were "record years" for the car industry?

Guess we'll have to wait and see what the years 2019 & 2020 are like.


We literally have no way of knowing what the effect of screwing up those JIT supply chains will be. Could be good, could be bad. Nobody knows. Also, trade deficit means we've got them over a barrel. Also, even if it all goes wrong, it's not our fault.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#148130

Postby ursaminortaur » June 26th, 2018, 1:25 pm

anticrank wrote:
XFool wrote:
Ashfordian wrote:The SMMT were predicting armeggeddon for the car industry if we voted to leave. Yet 2016 & 2017 were record years.

OK. So years 2016 & 2017, when we were in the EU, were "record years" for the car industry?

Guess we'll have to wait and see what the years 2019 & 2020 are like.


We literally have no way of knowing what the effect of screwing up those JIT supply chains will be. Could be good, could be bad. Nobody knows. Also, trade deficit means we've got them over a barrel. Also, even if it all goes wrong, it's not our fault.


Precisely, just like you have no way of knowing what the final result of shooting yourself in the head would be - you could get into heaven earlier which would obviously be a good result.

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Re: Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

#148135

Postby SteMiS » June 26th, 2018, 1:43 pm

Ashfordian wrote:The SMMT were predicting armeggeddon for the car industry if we voted to leave. Yet 2016 & 2017 were record years.

http://www.bmmagazine.co.uk/news/britis ... xit-bites/

British car investment slumps by half as Brexit uncertainty bites

The SMMT’s annual Sustainability Report says that the automotive sector had a strong 2017 as investments made a number of years ago came to fruition.

There's a lag in the impact of investment on output. I don't expect car companies, like Nissan in Sunderland, to just close shop and move immediately but the prospect of them gaining investment for new models will be seriously compromised if free movement of parts and product is curtailed. As existing models come to the end of their life, production will decline and eventually the plants close. That could be 5 - 10 years down the line. By then it will be too late to do anything about it.


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