Posts Tagged ‘mobility’

Hard Brexit threatens 100,000 German jobs: Study

Germany stands to be the hardest hit member of the EU if the U.K. crashes out of the bloc without a deal, Welt am Sonntag reported today.

The newspaper cited a study by economists at the Halle Institute for Economic Research (IWH) and the Martin Luther University of Halle-Wittenberg, which claimed a hard Brexit could put 100,000 German jobs on the line.

Workers in Germany’s car industry would be at particular risk in the regions of Wolfburg and lower Bavaria, where BMW and Volkswagen have factories.

“In no other state is the effect on total employment as great as Germany, which affects around 100,000 people,” said Oliver Holtemöller, co-author of the study. “The employment effects of a hard Brexit would be noticeable above all at the automobile locations.”

France is the next country in line to feel the heaviest effects of a hard Brexit, with 50,000 jobs under threat, according to the study.

The study estimates that over 600,000 people worldwide could feel the effects of Britain’s exit without a divorce deal in place. Of these, 179,000 jobs are based in the EU and 433,000 outside of the bloc.

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Dutch say hundreds of companies plotting Brexit switch

The Dutch government said it helped 42 companies move to the country in 2018 because of Brexit and is in talks with more than 250 others about a switch, according to a report out today.

The companies — including Japanese investment bank Norinchukin and media company TVT — translated into 1,923 jobs and €291 million in investment, the government report said.

The figures also includes the transfer of the EU’s European Medicines Agency from London and the opening of new office space by financial service providers such as MarketAxess and Azimo, in addition to shipping insurer UK P&I Club.

“These [newcomers] are predominantly British companies, but also American and Asian organizations that are reconsidering their current European structure due to uncertainties caused by Brexit,” the Dutch ministry said.

In 2017, only 18 companies transferred operations. The report said both Bloomberg and Discovery were also planning extra investment, according to figures collated by the Netherlands Foreign Investment Agency, which works under the Dutch Ministry of Economic Affairs and Climate Policy.

In the race to attract jobs and investment from the U.K., the Dutch did concede they face competition from Germany, France and Ireland in picking over the Brexit spoils.

“Due to the growing international uncertainty surrounding Brexit and changing global trade policies, the importance of a good Dutch business climate for all of us is continually increasing,” said Eric Wiebes, minister of economic affairs and climate policy.

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Britain scraps Brexit ferry deal with company that has no ships

The British government said today that it has scrapped a contract to provide emergency ferry services across the Channel in the event of a no-deal Brexit, as the company in question has no access to vessels.

Under the deal, Seaborne Freight had committed to providing services between Ramsgate in Kent and the Belgian port of Ostend — reviving a route that has been dormant since 2013 after the last operator went bust.

The aim was to provide emergency ferry capacity should the introduction of custom checks around the Dover-Calais maritime link lead to heavy congestion and delays after Brexit.

But without ships of its own, Seaborne’s contract relied on a previously unconfirmed support arrangement with Ireland’s Arklow Shipping. The company claims to have a fleet of 45 ships suitable for shifting everything from containers to grain, but will no longer back Seaborne’s government contract.

“Following the decision of Seaborne Freight’s backer, Arklow Shipping, to step back from the deal, it became clear Seaborne would not reach its contractual requirements with the government,” a spokesperson at the Department for Transport said Saturday.

The contract with Seaborne Freight was worth £13.8 million and part of a trio of arrangements that included larger deals with DFDS and Brittany Ferries. Transport Minister Chris Grayling has been under pressure over the contracts but the spokesperson said the department was in “advanced talks” with multiple companies about replacement services via Ramsgate, where preparatory dredging work has already begun.

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No-deal Brexit ‘ruinous,’ says UK business secretary

LONDON — A no-deal Brexit would be “ruinous” for the U.K. economy, Business Secretary Greg Clark told MPs.

In one of the strongest warnings yet from a Cabinet minister about the risks leaving the EU without an agreement, Clark indicated that he fully endorses warnings from Nissan and other carmakers about the disruption to trade that could result.

His comments place him at odds with Prime Minister Theresa May who, while seeking MPs’ approval for her Brexit deal, has refused to take no-deal off the table or withdraw her repeated insistence that “no deal is better than a bad deal.”

Speaking in the House of Commons following Nissan’s reversal of plans to build its new X-Trail model in the U.K., Clark said the firm had warned that the risk of a no-deal Brexit is causing “damaging uncertainty.”

“No deal is fully acknowledged, certainly by me and the industry as being ruinous for our prospects,” he said. “… in order to avoid no deal we need to come to an agreement in this House.”

Theresa May’s Brexit deal was rejected by the House of Commons | Jack Taylor via Getty Images

He urged MPs to get behind May’s deal to prevent the U.K. leaving without an agreement, saying that while the carmaker’s decision was made “on broader business grounds,” it had urged MPs to “come together and to resolve the question of our future trading relationship with the EU.”

“I believe their advice should be listened to and acted on,” he added.

Labour MP Chris Bryant said that Cabinet ministers are “the only people” who could stop no-deal.

“They’ve got to go back to the Cabinet and say to the prime minister: ‘We will not put up with this, this will do lasting damage to our country … and we must put a stop to it, otherwise we will resign.’”

Clark responded that it is a “matter of public record” that he has called for a close trading relationship to protect jobs and that it is “important that I should do that.”

In an interview with the Times last week, Clark said that businesses consider a no-deal Brexit “a disaster,” but asked whether he would resign to try to stop it said: “I will not desert my post while I can influence what I see as the requirement for a responsible government to make sure we achieve a deal.”

This article is part of POLITICO’s premium Brexit service for professionals: Brexit Pro. To test our our expert policy coverage of the implications and next steps per industry, email [email protected] for a complimentary trial.

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The Brexit vs. Dieselgate Nissan blame game

LONDON — There are two possible culprits for Nissan’s decision to move production of its X-Trail SUV from its Sunderland factory back to Japan.

One is Brexit. The other is the broader travails of diesel-powered cars, as demand for them falls thanks to the Volkswagen emissions scandal and public fears over the harm caused by exhaust fumes.

Nissan’s Sunday announcement left plenty of ammunition for both sides: “While we have taken this decision for business reasons, the continued uncertainty around the U.K.’s future relationship with the EU is not helping companies like ours to plan for the future,” said Nissan Europe’s Chairman Gianluca de Ficchy.

Euroskeptics highlighted every causal factor other than Brexit, while Remainers and advocates of a soft Brexit pointed to the car manufacturer’s explicit reference to Brexit uncertainty as the hardest evidence yet of the harm that could be done to the country’s car industry.

“I fear this announcement is only the beginning, and it is working people who will suffer the consequences,” Labour MP Bridget Phillipson, a supporter of holding a second Brexit referendum, said on Monday.

Ford plans to scale back operations in Europe and Jaguar Land Rover will shed 4,500 jobs, with the majority of those at British plants.

Japanese automakers are heavily exposed to the U.K. market that many had chosen as a gateway to the EU. Honda runs a plant in Swindon. And the boss of Toyota, which produces vehicles in Derby, said in October that a no-deal Brexit should be avoided “at all costs.”

Leading Brexiteer Jacob Rees-Mogg, however, told LBC Radio on Monday that in his view Brexit is “far from being the primary reason” for Nissan’s decision, blaming the Dieselgate emissions scandal and fresh taxes on vehicle registrations for an overall decline in demand across the car industry.

He also cited what he called Nissan’s own “corporate governance issues,” apparently linking the arrest of former Chairman Carlos Ghosn by Japanese prosecutors on financial misconduct allegations to the company’s X-Trail decision.

It was to Ghosn that Business Secretary Greg Clark issued a four-page written guarantee in the wake of the 2016 Brexit referendum, promising government protection in return for a commitment by Nissan to build new models at its Sunderland plant.

Nissan had already been forced to scale back production by 10 percent at Sunderland | Oli Scarff/AFP via Getty Images

“I understand, of course, your worries now about uncertainties as the UK prepares to leave the EU,” he wrote, adding that the U.K. would offer up financial support of up to £80 million plus other measures to keep production of Nissan’s Qashqai and X-Trail models in Britain.

That deal is now in tatters — which explains why the letter that ministers had refused to release citing commercial confidentiality is now in the open for all to read.

But there is truth to the Brexiteers’ claim that there is more Nissan’s decision than Brexit.

The automotive industry is in turmoil thanks to dampened consumer confidence in diesel, which would have been used in the X-Trail models, due to pollution concerns and new EU fleet CO2 emission reduction targets up to 2030.

Matthias Schmidt, a Berlin-based automotive analyst, said the X-Trail is one of Nissan’s highest emitting vehicles, and so is lagging its CO2 fleet average.

Nissan had already been forced to scale back production by 10 percent at Sunderland — which was the first English city to call its vote for Brexit on referendum night in 2016. When the carmaker laid off workers last year, it blamed diesel.

Downing Street’s spin dodged both Brexit and Dieselgate, trying to look for the positive side of Nissan’s announcement.

The recent entry into force of the EU-Japan free-trade agreement will also slash tariffs for vehicle imports into the bloc over a seven-year phase-in period. That makes it easier for Nissan to manufacture X-Trails in Kyushu, Japan, and ship them to the EU.

Nissan isn’t the only carmaker with U.K. operations to announce cutbacks.

Ford plans to scale back operations in Europe and Jaguar Land Rover will shed 4,500 jobs, with the majority of those at British plants. Again, Brexit uncertainty got some of the blame, but there were other factors too.

The U.K.’s vehicle output tumbled more than 9 percent in 2018, while exports fell by more than 7 percent, partly due to what the Society of Motor Manufacturers and Traders (SMMT) said were slowdowns in key European and Asian markets. Around half of the production from Nissan’s Sunderland plant is exported.

New cars wait for distribution at the Sunderland car assembly plant | Christopher Furlong/Getty Images

Investment in the sector has also plunged — falling by almost half to £589 million in 2018, according to the SMMT — another factor where Brexit gets some of the blame.

Downing Street’s spin dodged both Brexit and Dieselgate, trying to look for the positive side of Nissan’s announcement.

“It’s obviously very disappointing,” Prime Minister Theresa May’s official spokesman said on Monday, but added: “The company’s confirmed that no jobs will be lost and that they remain committed to the U.K. by continuing to manufacture in Sunderland the current three models and also a new model from 2020.”

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Nissan confirms UK investment U-turn, citing Brexit

Nissan confirmed Sunday it has reversed plans to invest in new manufacturing capacity in the U.K., citing “continuing uncertainty” around Brexit.

The carmaker said it was canceling a plan to build a new version of its X-Trail model at its plant in Sunderland and would instead produce the cars in Japan, a move first reported by Sky News.

The carmaker set out the plan in October 2016, four months after the Brexit referendum, after receiving “assurances” from the U.K. government.

“While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future,” Nissan’s statement read.

It said its intention to manufacturer other new models in Sunderland were not affected.

Word of Nissan’s decision immediately spurred renewed questioning and criticism of the handling of Brexit by Prime Minister Theresa May and her government.

“It does raise fundamental questions about the Brexit strategy,” opposition Liberal Democrats leader Vince Cable told Sky’s Sophy Ridge on Sunday show. “Brexit is clearly a major factor, it may be one of several but [it is] certainly a major factor.”

No job losses were expected as a result of Nissan’s change in plans, but it raises questions about the future of the British manufacturing site. Nissan employs an estimated 7,000 people in Sunderland.

“We appreciate this will be disappointing for our UK team and partners. Our workforce in Sunderland has our full confidence, and will continue to benefit from the investment planned for [other models] Juke and Qashqai,” Nissan said.

The U.K. car industry this week reported a five-year low in production figures and a 46.5 percent drop in inward investment last year. “With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, U.K. automotive is on red alert,” said the U.K. Society of Motor Manufacturers and Traders Chief Executive Mike Hawes.

“This represents a serious blow to the communities that depend on the jobs Nissan creates and supports,” Labour’s Shadow Brexit Secretary Keir Starmer tweeted. “The Tories’ chaotic handling of the Brexit negotiations is having a devastating impact on business investment.”

Britain’s largest carmaker Jaguar Land Rover said in January it would cut 4,500 jobs, most of those from its U.K. workforce.

This has been updated with Nissan’s announcement.

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