GENEVA (Reuters) - Ford (F.N) needs clarity on post-Brexit trading conditions as it decides on future investment in Britain, the carmaker’s Europe boss told Reuters on Monday.
Britain’s largest automotive engine maker Ford builds half of the country’s total output of 2.7 million units at its Bridgend location in Wales and London Dagenham factory.
The automaker will continue to build some of its own engines at Bridgend but has yet to say what will replace the current run built for Jaguar Land Rover, prompting union fears that over 1,000 jobs could be lost.
Ford said it is in discussions over future investment but, like many of its peers, called for certainty as soon as possible over what future trading conditions will be between Britain and the European Union.
Britain is scheduled to leave the EU at the end of March 2019 following a 2016 referendum.
“We’ll continue to work with the various stakeholders to look for what the opportunities are,” Ford’s Europe, Middle East and Africa boss Steven Armstrong told Reuters during an interview at the Geneva Motor Show.
“The sooner we have the clarity, the easier the decisions become to make, positive or negative, so that clarity is the important part of this,” he said.
Executives are worried that Brexit could impose tariffs and customs checks between Britain, Europe’s second-largest car market, and the European Union, snarling up supply chains, adding costs and risking the viability of plants.
Ford estimates that a hard Brexit, which would see World Trade Organisation (WTO) tariffs of 10 percent on imports and exports and lower levels on components, would cost it up to $1 billion per year.
“If we went to WTO levels of tariffs plus the other costs that would come into the system through the increased inventory and the friction at the border and everything else, the annual cost to us would be getting up toward $1 billion worth of tariffs,” said Armstrong.
Reporting by Costas Pitas; Editing by Adrian Croft