Jaguar Land Rover told the UK government that failing to secure a good deal on Brexit would wipe billions from its coffers and hobble an iconic British automaker at a time when business is worried about limited trade access to the EU.
A “Bad Brexit” would jeopardize as much as ￡80 billion (US$106 billion) in spending by Jaguar Land Rover over the next five years, chief executive officer Ralf Speth said late on Wednesday in an e-mailed statement.
Extra costs and delays in parts deliveries coming from outside the UK would cut profit by ￡1.2 billion a year, he said.
Photo: Reuters
“As a result, we would have to drastically adjust our spending profile,” Speth said.
The warning from Speth came ahead of a crucial Cabinet meeting today where British Prime Minister Theresa May is to try to find consensus on her latest proposal for a future economic relationship with the EU.
British Secretary of State for Exiting the EU David Davis has already told May in a letter that the new customs plan is unworkable, a person familiar with the matter told Bloomberg News.
Businesses have become more outspoken amid government indecision that has increased the chances of a so-called hard Brexit.
Jaguar Land Rover’s statement follows similar warnings from German automaker BMW AG and planemaker Airbus SE that they might also pull investment.
Speth’s comments contrast to pledges made last month by West Midlands-based Jaguar Land Rover, when it promised to retool a plant near Birmingham for a new generation of electric cars.
All UK investment is in jeopardy, a Jaguar Land Rover spokesman said, when asked about the plan at the historic Solihull plant.
The company has already said it will move production of its Land Rover Discovery to Slovakia from that location by early next year.
Tata Motors said in a statement yesterday that the investment plans that Jaguar Land Rover presented to investors last month did not factor in a “worst-case Brexit scenario,” and the company stands by the intentions shared at the time.
“Jaguar Land Rover needs free and full access to the single market beyond transition to remain competitive, which we also firmly believe is in the best long-term interests of the United Kingdom,” Tata Motors chief financial officer P.B. Balaji said in the statement. “JLR will continue to work with the government to secure the right free-trade deal for the country, economy and industry.”
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