Ford preparing alternative production sites to prevent no-deal Brexit tariffs
The automaker told British prime minister Theresa May in a private conference call with other business leaders of its plans.
Automaker Ford Motor is coming up with a back-up plan to prevent itself from paying higher tariffs and getting disrupted from its business in case if Britain leaves the European Union (EU) without a deal.
The firm told British prime minister Theresa May in a private conference call with other business leaders of its plans, British national daily newspaper The Times reported on Tuesday. Other businesses in the conference call also delivered the same warning as Ford to Mrs May, the report said.
Higher tariffs on firms, job losses at risk with a no-deal Brexit scenario
Last month, the automaker said it could face a bill of up to US$1 billion (£767 million) if a no-deal Brexit happens. The bill would comprise of World Trade Organization tariffs and frayed costs due to a weaker pound.
Ford operates two engine plants in Britain and employs 13,000 people there. It is the top-selling car brand in Britain and the country is its third-largest market.
Carmakers and other manufacturers have cautioned on the toll a no-deal Brexit could affect businesses. The problems on higher tariffs, disruption to supply chains and threats to jobs are real issues that will occur if Britain leaves the EU on a hard landing.
Britain is scheduled to leave the EU on March 29.
Foreign and local manufacturers jumping ship
Although some manufacturers have claimed that the decision to relocate their factories are unrelated to the Brexit turmoil, the timing of the shift places their move under scrutiny.
Last month, British home electronics maker Dyson said it will be moving its corporate head office to Singapore to cater to the geographical shift in their consumer portfolio.
The group said it will continue to grow its investments in its research and development labs in the United Kingdom (UK), as well as support the capabilities of its offices in Singapore, Malaysia, China, and the Philippines for this year.
Japanese electronics giant Sony also announced plans to shift its European head office from Britain to the Netherlands to avoid Brexit-related customs issues.
Sony’s move mirrors its rival Panasonic which moved its European headquarters from the UK to the Netherlands last year over similar concerns.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
