LAST UPDATE | 22 Jun 2018

CAR MANUFACTURER BMW has joined Airbus in warning that uncertainty about Brexit is forcing it to reconsider its investment in manufacturing in the UK.

Earlier today the aviation giant, which employs 14,000 people at 25 sites across Britain, warned in a risk assessment yesterday that it would be forced to “reconsider its footprint in the country, its investments in the UK and at large its dependency on the UK” if Britain leaves the single market and customs union without any deal in place.

The UK is due to leave the EU in March 2019 but current trading arrangements will remain in place until December 2020.

While Prime Minister Theresa May has repeatedly expressed the desire to bring the UK out of the single market and customs union, the lack of clarity on what would replace it has been a hallmark of negotiations with the EU so far.

With the potential for no deal to be reached, Airbus said it needed to take appropriate action

“Put simply, a no deal scenario directly threatens Airbus’ future in the UK,” Tom Williams, chief operating officer of Airbus Commercial Aircraft, said in a statement.

The company estimates that delays and disruptions to its production that would be caused by the trade barriers that would spring up would cost it up to €1 billion a week in lost turnover.

It said a no-deal Brexit “would be catastrophic” for the aviation group.

Even if there was an “orderly” Brexit with an agreement and transition period, Airbus said that its business would still be impacted.

It said: “The new EU/UK relationship will entail new procedures, regulatory regimes, duplication of tasks, divergence of standards etc… potentially leading to higher complexity, more effort, more cost, more risks; more friction/delay in our cross-channel, deeply integrated supply chain operating today on a just-in-time basis.”

Williams added that in any scenario, Brexit has “severe consequences” for the aerospace industry and Airbus in particular.

“While Airbus understands that the political process must go on, as a responsible business we require immediate details on the pragmatic steps that should be taken to operate competitively,” he said.

Without these, Airbus believes that the impacts on our UK operations could be significant. We have sought to highlight our concerns over the past 12 months, without success.

BMW

Carmaker BMW also warned that uncertainty was affecting the investment climate.

Ian Robertson, special representative of the BMW Group in the UK, told the BBC:

If we don’t get clarity in the next couple of months we have to start making those contingency plans – which means investing money in systems that we might not need, in warehouses that might not be usable in the future, in effectively making the UK automotive industry less competitive than it is in a very competitive world right now.

With reporting by © AFP 2018