Jaguar Land Rover warned the UK government that failing to secure a good deal on Brexit would wipe billions from its coffers and hobble an iconic British carmaker at a time when business is worried about limited trade access to the EU.
A "bad Brexit" would jeopardise as much as £80 billion (€90bn) in spending by Jaguar Land Rover over the next five years, chief executive Ralf Speth said in an emailed statement.
Extra costs and delays in parts deliveries coming from outside the UK would cut profit by £1.2 billion a year, he said.“As a result, we would have to drastically adjust our spending profile.”
The warning from Mr Speth came ahead of a crucial cabinet meeting on Friday where prime minister Theresa May will try to find consensus on her latest proposal for a future economic relationship with the EU.
Brexit secretary David Davis has already told Ms 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 and planemaker Airbus that they also may pull investment.
Mr 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.
Jeopardy
All UK investment is in jeopardy, a Jaguar Land Rover spokesman said when asked about the plan at the historic Solihull plant in England. The company has already said it will move production of its Land Rover Discovery to Slovakia from that location by early next year.
Parent Tata Motors said in a statement on Thursday that the investment plans that Jaguar Land Rover presented to investors in June didn't 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 PB Balaji said in the statement. “JLR [Jaguar Land Rover] will continue to work with the government to secure the right free trade deal for the country, economy and industry.” – Bloomberg