Brexit voters are, after all, largely fools who don’t know what is nice for them – in distinction to all these Stay voters with their levels and a
Brexit voters are, after all, largely fools who don’t know what is nice for them – in distinction to all these Stay voters with their levels and analytical expertise. However none are so dim-witted as these in Sunderland who, like turkeys voting for Christmas, selected a plan of action which is able to inevitably result in them shedding their jobs on the metropolis’s Nissan plant.
Or perhaps not. It turns out that Sunderland’s Nissan staff may not be fairly so silly in any case. It’s been revealed that the corporate is taking a look at a state of affairs during which it might shut its EU crops and switch manufacturing to Sunderland as a substitute, elevating its UK output from 350,000 to 400,000 autos a 12 months. The Micra, which is presently manufactured in a Renault plant in France, would transfer to Britain, whereas its van plant close to Barcelona can be closed.
Nissan, fairly moderately, has been taking a look at what it might do within the occasion a commerce deal fails. In frequent with different automotive producers, the corporate presently depends on a posh provide chain which includes components passing – tariff-free – backwards and forwards between Britain and the EU. It additionally exports a variety of its completed autos throughout borders. Such a enterprise mannequin faces disruption within the occasion of a failed commerce deal – an end result which, after all, neither the UK nor the EU desires.
Arch-Remainers weren’t incorrect to select up on this as a possible price of Brexit. However their error has been to imagine {that a} onerous Brexit would contain manufacturing draining away from Britain and in direction of the EU. What they ignore is that Britain isn’t just a producer of automobiles, it’s a very giant marketplace for them, too. Certainly, German car-makers have referred to as Britain ‘Treasure Island’, as it’s a significantly worthwhile market.
So what do you do when you presently make automobiles in Britain, a few of that are bought right here and a few of that are bought within the EU? Do you shift manufacturing to the EU with a purpose to keep away from the tariffs you might need to pay on exports there? Or do you retain manufacturing in Britain, to keep away from tariffs which might turn out to be payable on automobiles bought right here? The benefit of doing the latter, as Nissan has twigged, is that the costs of many automobiles presently imported to Britain will rise if a commerce deal fails. Automobiles made in Britain will due to this fact have a aggressive benefit. Underneath Nissan’s state of affairs it might improve its share of the UK market from a present 4 per cent to as a lot as 20 per cent.
For the second, that is solely a state of affairs, and one which Nissan formally denies – though to guage by the boldness with which the Monetary Instances studies the story this morning it has come from deep inside the corporate. However it’s a reminder that the boot isn’t on the EU’s foot on the subject of commerce negotiations, nonetheless a lot Michel Barnier may like to say it’s. In frequent with Britain, the EU has a lot to lose from a failed commerce deal, not least as a result of it has a big surplus in commerce in items with Britain. That’s the reason our personal authorities is true to ramp up the rhetoric in commerce negotiations and assert that no deal is a severe chance.