Jaguar Land Rover warns that “bad” Brexit will hit UK investment plans

The boss of Jaguar Land Rover (JLR), the UK’s largest automotive manufacturer, has warned that a bad Brexit deal will jeopardise £80bn of investment in the UK.

bad brexitJLR’s Solihull factory is the UK’s largest car plant

Calling on the government to urgently provide certainty for business, the firm’s chief executive Dr Ralf Speth has warned that failure to maintain tariff-free access and frictionless trade with Europe would affect the company’s future in the UK.

“If the UK automotive industry is to remain globally competitive and protect 300,000 jobs in Jaguar Land Rover and our supply chain, we must retain tariff and customs-free access to trade and talent with no change to current EU regulations,” he said.

He added that a “bad” Brexit deal would cost the company more than £1.2bn of profit each year, and significantly impact it’s UK investment plans. “We have spent around £50bn in the UK in the past five years – with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome,” he said.

The company, which is owned by India’s Tata Motors, employs 40,000 people in the UK, and supports a further 260,000 jobs in the UK supply chain.

Mainland Europe is one of JLR’s largest markets, with 20 per cent of cars being sold there. In common with other major UK car companies, JLR is also at the heart of a complex pan-European just-in-time supply chain, with over 40 per cent of parts imported from Europe. The company claimed that any delay to parts delivery at its largest plant in Solihull – which builds 1,500 cars per day – would force the suspension of production at a cost of £1.25m per hour.

These latest warnings follow similar statements in recent weeks from aerospace giant Airbus, and other automotive firms including Nissan and BMW who have all called on the government to abandon its so-called red lines on Brexit.

Speth also echoed remarks made by BMW’s Ian Robertson at last month’s SMMT summit, who argued that Brexit is hampering the UK’s ability to capitalise on the opportunities presented by the profound and rapid technological change underway in the automotive sector.

“Electrification and connectivity offer significant economic and productivity opportunities – get Brexit wrong and British people, businesses and broader society lose the chance to lead in smart mobility.”

Reacting to Speth’s comments, a spokesperson at industry body EEF said: “This clearly underlines the reality being faced right across industry. This is not just an issue for big companies, however, but those SMEs who are also heavily exposed in the major supply chains and, as yet, are unable to know what scenario they are planning for. Time is now running out to secure the frictionless and tariff free relationship we need with the EU if there are not to be serious consequences right across UK industry.”

Meanwhile Len McCluskey general secretary of the Unite union, which represents automotive and manufacturing workers, said: “Tens of thousands of decent jobs…are being put at risk by a government that places its survival, indulging narrow, extremist views, above the well-being of the people of this country.”