Brian Monteith: Don’t believe scare stories about car industry

Millions of pounds have been ploughed into Britains car plants by overseas companies, who seem unfazed by the prospect of Brexit. Picture: Getty Images
Millions of pounds have been ploughed into Britains car plants by overseas companies, who seem unfazed by the prospect of Brexit. Picture: Getty Images
Share this article
Have your say

Brian Monteith asks why car manufacturers would invest so much here if they were worried about Britain leaving the EU

Just like the Scottish ­referendum, with two weeks to go a mood is gathering that the underdog might just beat the British establishment. Only this time it is not a snapshot solitary poll telling us that the Yes campaign has a lead, it is a handful of polls suggesting the Leave campaign is ahead, one by a 10 per cent margin.

Fearing these polls represent a trend and that they are losing, the panicking Remain campaign will resort to yet more scare stories that have become ever more ridiculous as the debate has droned on. Last week it was that the cost of ice cream cones will go up, as if that is a price no one would pay (were it true) to regain control of our laws, taxes and borders. This week risks to our car industry are expected to be touted, to cause fear and alarm about jobs.

However, there is a great deal of evidence to contradict any threats that might be made.

Toyota, the world’s largest car manufacturer, which employs 4,000 workers at its car plant in ­Burnaston and engine plant in North Wales, has already announced it will remain in the UK following Brexit.

Burying a time capsule, the CEO Akio Toyoda said: “We want to ­deliver even better cars, so when that capsule is opened after 100 years, all can see is that we’ve built a truly British company.”

Karl-Thomas Neumann, the CEO of General Motors-owned Vauxhall/Opel, has said: “We have plants in Luton and Ellesmere Port. We will not turn our backs on England, life would carry on. We would continue to find ways to invest.”

As if to vouchsafe his statement, an Opel plant in Germany closed last year while GM invested £185million in its UK van manufacturing facility. In 2012, in full knowledge of the political “risk” from ­British euroscepticism, BMW-owned Mini announced a £250million investment at its three UK plants to increase production, having announced an additional £500million for the latest Mini only the year before.

Likewise, BMW-owned Rolls Royce Motor Cars has dismissed the idea of relocating outside the UK. BMW CEO Torsten Mueller-Oetvoes stated: “I’ve had lots of questions in my time in a way of why aren’t you opening up a plant ­somewhere else. I said, guys, are you kidding me? This is so truly ­British that it belongs to Britain and it is also part of our success story that we are from Britain.”

What goes for Rolls Royce and Mini also goes for other British marques.

Volkswagen-owned Bentley is also committed to the UK. Board ­member for sales Kevin Rose said: “We made our plans, we’ve announced the investments… and they were in full knowledge that there was a ­referendum so we believe in the UK.”

In March 2015, Jaguar Land Rover announced an investment of £600million in the West Midlands, including £400million for manufacturing the new Jaguar XF at ­Castle Bromwich, and in September – after the referendum was certain – a further £120million at Solihull.

Nissan’s Sunderland plant is often quoted as being at risk, due to it being in partnership with Renault, which is itself part-owned by the French government.

But in 2015 it too announced it would build its next generation Juke vehicle in the UK, with £100million of investment. Nissan chairman Paul Willcox said: “Nissan, obviously, is a global company. We export to over a hundred different countries from our production plant in ­Sunderland. The important point is not that referendum and the decision, whichever way that goes.

“Nissan has made a strong ­commitment to the UK so that won’t be pushed to one side, we have made that commitment, certainly beyond 2020.”

Not to be outdone, Honda announced in 2015 a record £200million investment at Swindon – its only European factory – that would create a global manufacturing hub to build a new five-door ­Civic. Even the little-known Geely, the Chinese owner of the London Taxi Company, has announced an investment of £250million, creating 1,000 jobs at a new Coventry plant to build a low-emission black cab.

In 2014, Ford announced it would invest £190million in Dagenham, and, in 2015, a further £181million in its Bridgend engine manufacturing plant, even though the Brexit referendum was likely.

By comparison, let us not forget how the EU ­provided Ford with an £80million loan so it could close down its Southampton plant, the home of the Transit van, and ­relocate all production to Turkey, outside the EU. Any new ­Transits you see are now ­Turkish, not ­British, thanks to the EU.

The reality is that the four out of every five cars produced in Britain are exported. Britain also ­happens to be the world’s second most ­significant aerospace manufacturer, possesses two out of the top ten global pharmaceutical companies while also having strong positions in marine, defence systems, food and beverages, high-end engineering and electronics. British design, from fashion to cars, continues to be world beating.

While the manufacturing base has shrunk, the UK remains a leading global manufacturer (ranked 8th) because we retain a key skills base and have developed a high-end, high margin capability.

Membership of the EU, with its regulatory and cost pressures, has almost certainly done more harm than good to this capability. The massive scale of modern ­global ­supply chains, where we ­provide a huge number of parts to EU ­manufacturers, would make a trade war an act of self harm for Brussels and especially Germany. An astonishing 45 per cent of all new UK car ­registrations last year were ­German-owned marques.

Industry has little to fear from EU withdrawal. Indeed once the UK is free to negotiate its own trade deals, a new era of growth is ­possible.

After running out of apocalyptic scare stories, we can then expect an EU vow to be staged, with appeals by EU leaders for us to stay and the offer of fresh reform. The economic debate has not been won by either Remain or Leave – it is a score draw.

No one really knows what the future offers, both have substantial risks. Far better we leave and take control of our economic future than allow it to be dictated by an unaccountable elite.

• Brian Monteith is director of ­Global Britain