According to media reports quoting sources, the British Prime Minister Theresa May has been told by US car maker Ford Motor Co that some of its production processes would have to be moved out of the UK due to Brexit, this was conveyed by the company during a conference call on Tuesday with May.
According to the sources quoted in the reports, alternatives sites outside Britain might be required to be used by Ford, the company has told May.
“They were just making clear that they have other options. This isn’t the only one,” said the reports quoting a source.
According to an earlier news report published by The Times, May has been informed by Ford about its decision to prop up efforts to shift its production outside of the UK.
The UK is the third largest market for the US car maker and the company is also the largest selling brand in the country. One in three of its cars that are manufactured at its plant in Cologne, Germany, are sent to the UK. The company also employs more than 13000 people in the UK.
The huge negative impacts of a no deal Brexit have already been stressed by car-makers as well as other manufacturers in the UK. Companies believe that a no deal Brexit could have impact such as higher tariffs, disruption to supply chains and threats to jobs.
March 29 this year is the date when the UK would formally leave the European Union.
It has repeatedly urged the government and parliament to avoid leaving the EU without a divorce deal, Ford said in a statement.
“Such a situation would be catastrophic for the UK auto industry and Ford’s manufacturing operations in the country,” the car maker said. “We will take whatever action is necessary to preserve the competitiveness of our European business.”
Another decision by another major car company – Japan’s Nissan, dealt a blow to the UK after the Japanese firm announced last week that it would not build its proposed new X-Trail SUV in the country but would make it in its home country. While making this announcement, the company also said that it was finding it difficult to make plans for the future because of uncertainty over Britain’s departure from the EU.
Last month, Ford had said that in case of a no deal Brexit, it would have to incur a cost of up to $1 billion. The US car maker operates two engine plants in the UK.
On Tuesday, May had told the British parliament that she required more time to strike a deal with the EU on Brexit. The conference call with business leaders followed that announcement.
It is appearing to be more likely that the UK would have to exit the EU without a deal on march 29 unless May is able to convince the EU to reopen the negotiations over Brexit that she had struck back in November last year and then convince the British parliament about the deal.
(Adapted from Reuters.com)