Nissan is warning it could scrap investment in its Sunderland car plant unless Britain promised to pay compensation for any tax barriers resulting from Brexit negotiations.
Sunderland voted overwhelmingly to leave the European Union, with more than 60% backing Brexit. The cruel irony.
Sunderland was one of the first regions to report its result on the night of the June 23 referendum and the first to show the true extent of the support in Britain for leaving the EU.
“If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government,” Nissan Chief Executive Carlos Ghosn told reporters at the Paris Motor Show.
“You can have commitments of compensation in case you have something negative. If there are tax barriers being established on cars, you have to have a commitment for carmakers who export to Europe that there is some kind of compensation.”
Nissan builds around one in three of all cars made in Britain at its Sunderland plant, according to the Sunderland Echo, and employs almost 7,000 people in the area.
Ghosn’s remarks show the increasing concern that Theresa May’s government may be heading for a so-called “Hard Brexit”, where Britain loses membership of the single market and customs union two years after triggering Article 50 — the mechanism that starts talks with the EU on the terms of Brexit.
The Japanese government last month warned the UK that the Brexit negotiations would affect its levels of investment in manufacturing.
To quote the Japanese letter (emphasis ours):
“There are numerous Japanese businesses operating in Europe, which have created 440,000 jobs. A considerable number of these firms are concentrated in the UK. Nearly half of Japanese direct investment intended for the EU in 2015 flowed to the UK … we strongly request that the UK will consider this fact seriously and respond in a responsible manner to minimise any harmful effects on these businesses.”
According to a survey of 100 CEOs from accountancy firm KPMG earlier this week, 76% are considering relocation, while 72% said they voted to Remain in the European Union in the June referendum. Meanwhile, the Organisation for Economic Co-operation and Development (OECD), forecast that Brexit will cut UK GDP growth from 2% to 1% next year.
EXCLUSIVE FREE REPORT:
5 Top Fintech Predictions by the BI Intelligence Research Team. Get the Report Now »