Vauxhall Issues Statement Over Britain’s Exit From The European Union
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As North America wakes from its slumber, the United Kingdom is settling down after its most monumental political moment likely since World War II.
Britain’s referendum over staying a part of, or leaving, the European Union has been settled: Britain is out. The BBC reports Morgan Stanley has already begun moving some 2,000 employees from London offices to Frankfurt, Germany, and it’s feared it’s only the beginning.
Vauxhall, one of the country’s longest standing automakers now owned by General Motors, shares similar concerns after the country’s citizens declared it’s time to leave.
The Chester Chronicle reports on Vauxhall’s statement over Britain’s exit from the EU. The statement reads as follows:
It is important for Vauxhall that negotiations on the UK’s future relationship with the EU are concluded in a timely manner.
It is also important that business continues to benefit from the free movement of goods and people during this period.
Communication on the development of the future relationship with the EU should also be clear and transparent.
We fully support remaining part of the European Economic Area.
Previously, it was speculated the Vauxhall Ellesmere Port assembly plant could shutter in the wake of a Brexit, citing new, future tariffs in the country making it more difficult to manufacture in the country. More than 2,000 workers are employed at the Vauxhall facility, which is responsible for producing 150,000 vehicles every year.
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The British people have voted to do what they think is best for their country and General Motors needs to do the same by moving production of Vauxhall vehicles to either Spain or Germany to keep from paying high tariffs importing cars in the European Union.
Never going to happen
Making assumptions that don’t necessary hold true. If the UK stays in the EEA and negotiates well with the EU, tariffs may not be an issue. But this is why stocks are in tumult – we don’t know what the math will be until the dust settles.
What? Vauxhall is a rare bright spot for GM Europe. GM had best think hard before abandoning the UK.
Great Britain is now a post-globalist/non neo liberal society that will favor loyal domestic production (much like Germany and Japan who like to export yet not import).
The US, whether it come via a Sanders or Trump-like figure will adopt a similar world view soon enough. This is why Ford is reevaluating some of Mexico moves.
No need for GM to hurry!
For a start, whatever happens, exiting is a two year process as prescribed by EU law, so the same free tariff rules apply to the UK until June 2018 at least.
Secondly, the UK £ dropped 10% in value yesterday and is likely to remain weaker for the foreseeable future. What this means to GM is that as of Friday 24th June 2016, exporting UK manufactured Astras to the rest of Europe effectively became 10% cheaper, ie. a $20,000 car just became $18,000. Will GM bean counters be in a rush to give up that additional profit per vehicle … I don’t think so.
Finally, forget manufacturing in Germany or Spain. If production does eventually shift from the UK, it will logically go to Gliwice in Poland where the Astra and Cascada are also built and where labour costs are significantly lower.
75% of the Astras content is sourced from Europe, the benefits of a weaker pound are a little more complicated to calculate than you think. Im sure G.M will be able to extract an advantage from the currency fall.
Uncertainty is Ellesmere Ports biggest enemy, and I fear clarity is unlikely to arrive before the bidding process for the next Astra has concluded, maybe the sea change to electric cars will allow the UK to promote more 1st, 2nd and 3rd tear suppliers to locate to the UK, helping to safeguard domestic auto manufacturing.
this is nothing compared to what will happen when my man trump comes in and really upends the chessboard.
it is going to be magnificent and yuuuuuuge.
the uk should hire the greatest negotiator the history has ever known to deal with those euro bureaucrats. trump will have them scurrying back to brussels in no time. all of the benefits of eu membership w/o any of the messy bits. guaranteed!