In recent weeks some of the biggest companies operating in Britain have been critical of a lack of clarity in Brexit’s outcome.
On Thursday, Jaguar Land Rover, Britain’s biggest carmaker stated, if the negotiations between Britain and the European Union were to result in a so-called “hard Brexit” it would cost it $1.59 billion (1.2 billion pounds) a year.
As a result it will have to cut down on its operations in the United Kingdom.
“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees,” said Ralf Speth, JLR’s CEO in a statement.
Jaguar Land Rover joins a growing list of companies which have raised concerns over the potential disruption to business if Britain were to crash out of the EU without a trade agreement, in March 2019 resulting in a so-called hard Brexit.
“The recent statement from JLR only reaffirms this position that a Brexit which increases bureaucracy, reduces productivity and competitiveness of the UK Industry is in no-one’s interest,” said Tata Motors Ltd, JLR’s parent firm on Thursday.
“Prima facie, 1.2 billion pounds looks on the higher side and hence the reaction to the stock today,” said Basudeb Banerjee, an analyst with Ambit Capital.
The development comes a few days ahead of Friday’s meeting where British Prime Minister Theresa May is set to meet her cabinet ministers in order to hammer out a Britain’s strategy to negotiate its way out of the European Union.
Due to the lack of clarity as to what Britain actually wants from the EU once it leaves the bloc, the outcome of the cabinet meeting is seen as critical to progress in talks with the EU on the issue.
In recent weeks, some of the biggest companies which are operating in Britain have been critical of the lack of Brexit-related clarity coming from the government.
Last week, Siemens and Airbus went public with their concerns about what it would mean to their businesses if Britain were to leave the EU’s customs union and single market bloc without a trade agreement.
JLR said it needed “free and frictionless trade with the EU and unrestricted access to the single market.
“A bad Brexit deal would cost Jaguar Land Rover more than 1.2 billion pounds in profit each year. As a result, we would have to drastically adjust our spending profile; we have spent around 50 billion pounds in the UK in the past five years – with plans for a further 80 billion pounds more in the next five,” said Speth in a statement. “This would be in jeopardy should we be faced with the wrong outcome.”