Automakers in the u.k. warn a no-deal brexit could cause huge production declines npr igas energy shares

##############

With electricity electricity lyrics Brexit just 24 days away, automakers in the U.K. are warning that leaving the EU without a deal could be devastating. Today BMW said it would have to consider ending production of a type of MINI at its factory in Oxford. And Toyota said a no-deal Brexit threatens future investment at a plant that currently makes the Corolla. For more on the economic impact of Brexit, we turn to NPR’s Frank Langfitt, speaking to us from London. And, Frank, help us understand how leaving the EU with no deal affects carmakers specifically. Like, why are we hearing these warnings now?

FRANK LANGFITT, BYLINE: Well, the fear is of course when y gasset March 29 rolls around, and if the U.K. leaves without any deal, tariffs would kick in, in terms of being able to export cars over to the European Union, as well as engines. And that would make cars here a lot more expensive, much less competitive in Europe. And there’s an industry group that estimates this could add billions of dollars in costs to the cars in terms of their prices. Well, remember the reason that many foreign carmakers actually set up factories here in the U.K. is because of tariff-free trade with the European Union. And a no-deal Brexit could end all that.

Now, the question you gas pains or contractions asked – which is, why now? – it’s pretty clear that the – these – particularly these auto companies, they want to put maximum pressure on Parliament to approve Prime Minister May’s deal, which is scheduled for a vote as early as next week, and begin to end what for them has been 2 1/2 years of complete economic uncertainty.

LANGFITT: It actually is. And I visited this place called Espack. It’s a Spanish logistics company. Ninety percent of their business is managing parts for a nearby Ford engine plant. They’ve already seen over – in recent months, decline in orders from Ford. I was speaking to a guy named Jorge Escalada. He owns the company. And he says the problems they’re seeing – and the U.K. industry in general – is a confluence of events. You’ve got an industry that’s struggling globally with falling sales in China, plunging diesel gas tax in washington state sales in Europe following that VW emissions scandal, as well as the transition to electric vehicles. This is how Jorge Escalada put it.

LANGFITT: Well, what’s at stake for the U.K. – economically, there’s, you know, terrible concern that Brexit is going to cause a lot of damage here, especially a no-deal Brexit. In the auto industry, you’ve got over 800,000 people employed, directly and indirectly. Many of those are high-paying jobs in struggling areas. And in the short term, there’s concern about production moving away, layoffs. But the bigger concern is the long term. I was out in Wales. I talked to a guy named Peter Wells. He’s a professor at the business school there at Cardiff University, focuses on the auto industry. And this is what he told gas works park fireworks me.

But then the next choice would be delay. And they don’t like that either because all along – and what most businesses I’ve been talking to now for two years in this country – is they want to see clarity and certainty on what Brexit is going to look like because they can’t make investment decisions. They can’t look to the future. And that’s what they really want out of this government.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative gas blower will not start record of NPR’s programming is the audio record.