In the case of a tough Brexit, Jaguar Land Rover will leave the UK
Author: Mario Schmidtgen
“A tough Brexit deal would cost Jaguar Land Rover more than £ 1.2 billion in profits every year.”
Jaguar Land Rover (JLR), the UK’s largest carmaker, does not exclude that in the event of a hard Brexit the will leave the island. “A tough Brexit deal would cost Jaguar Land Rover more than £ 1.2 billion in profits every year” said Ralf Speth, Group CEO, on Wednesday. “As a result, we would have to drastically adjust our spending profile.”
Within the past five years, the company has invested around £ 50 billion in the UK. For the next five years, investments of £ 80 billion have been planned. “This would be in danger if we were faced with the wrong result” warned Speth. But a complete move would only be an option if there would not be any other way to “save the business.” Some time ago JLR announced to move the production for the SUV model Discovery to Slovakia in the future. However, Brexit was not responsible for this decision.
UK’s exit from the EU is a major concern for people in the British top management. Around 75 percent of the CFOs are more pessimistic about Brexit. They are very worried that their business will suffer from this.
So far, the British Prime Minister counts on a gentle Brexit. The problems at the Irish border shall be solved by import duties. “The economy has been patient over the past two years” said Adam Marshall, head of the UK Chamber of Commerce BCC. But now the last straw has broken the camel’s back.
On Friday, the British government wants to agree on a plan that clearly defines the future relationship with the EU. But there is still a conflict in the cabinet. While one side wants to break with Brussels, the other side’s goal is to stay as close as possible to the EU and related institutions.
The main priority for the economy is to know where the journey will go in the future. “Less than nine months before the Brexit day, we are further away from the answers businesses need than the day after the referendum” Marshall said. It was said that from a BCC list of 24 extremely important questions, only two had been answered.
Many companies are already considering alternatives to investing in the UK. For example Airbus, BMW and Siemens announced last week that they must plan for the worst case if no sensible plan has been worked out in the coming weeks.