Investment Woes

Get it wrong, the message from manufacturers is, and Britain will hemorrhage jobs and investment.A bad deal would jeopardize as much as 80 billion pounds (US$106 billion) of spending over the next five years, JLR CEO Ralf Speth said late Wednesday. Extra costs and parts-delivery delays due to new trade barriers would cut profit by 1.2 billion pounds a year, according to the automaker. Industrywide, the figure would top 4.5 billion pounds, according to automotive consultancy AutoAnalysis.Until now, large manufacturers have limited their pronouncements on Brexit, but with key decision deadlines approaching, they are increasingly going public with their worries.Airbus SE was the first major company to break cover last month, saying it may have to pull its U.K. investments in the event of a no-deal Brexit, which May refuses to rule out. The aerospace giant employs 14,000 people at 25 sites in Britain, and supports more than 100,000 jobs in its British supply chain. BMW then said it would be forced to rethink production at its four U.K. plants if products are stopped at the border after Brexit.Some 46 Conservative lawmakers, including former ministers under May, have written to May urging her to listen to business.“A Brexit deal without our trading, enterprising, and innovative businesses and their employees at its heart will miss the point,” the lawmakers wrote. “We also urge the Cabinet to recognize that the time for debating is over and that a model must be found which supports your ambition for a future partnership with the EU which allows for frictionless trade to continue.”The plan that the premier brought to Berlin, which the Germans indicated was impracticable, involved a complicated customs setup that would leave the U.K. collecting tariffs on behalf of the EU on goods crossing its border.May in March gave a speech outlining her vision, but has made little headway since then to unify both her party and her cabinet, which are split between pro-Europeans who want to maintain as close ties as possible with the EU, and Brexiteers who are calling for a clean break that frees Britain from the bloc's laws and allows it to strike its own trade deals.“A few months ago, manufacturers were rather hoping we'd be in a place now where it would all be clear,” said Phipson. “It's really important we get some clear messages coming out of Chequers this week, and in the White Paper. What we do not want to see is just another set of aspirational objectives here. It needs to be quite detailed in order for people to use it for planning.”

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