British suppliers to Honeywell’s Newhouse plant in Glasgow will be asked to trade in euros this year or else to offer discounts as the US controls giant implements a euro purchasing strategy.
Bill Hjerpe, president of Honeywell Europe, said last week that a sourcing rethink will result in more pan-European suppliers to the group and more suppliers trading in euros including those based the UK.
‘If suppliers want to use their local currency, then we would want a price concession to match our hedging costs,’ he said.
Honeywell’s policy follows similar moves by other major pan-European industrial groups, including Siemens, which has warned that suppliers quoting in pounds must expect to offer discounts.
Savings on transaction costs and currency hedging from trading in euros will be up to $7m (£4.3m) per year, Honeywell predicts.
Newhouse employs 800 and exports about 50% of its products to the eurozone. Hjerpe said its future was safe whether or not Britain joined the euro, but warned that future investment in the UK could be jeopardised if the UK stayed out.
News Analysis, page 10