Is Boris sh*tting himself?
Discussion
Turkey has a trade deal with the EU. Which Britain shortly won't have.
Ironic really. People were annoyed by the idea of losing their jobs to cheap foreign labour and now that's exactly what is going to happen. At least they won't be pushing up the house prices by living next door eh?
Ironic really. People were annoyed by the idea of losing their jobs to cheap foreign labour and now that's exactly what is going to happen. At least they won't be pushing up the house prices by living next door eh?
SMB said:
Tuna, On the last page you said this ' Contrary to popular opinion, companies can't just up sticks every six months and move where the exchange rate is better. Labour relations, skilled workforces and just financial momentum all play a part.'
I did indeed reference Ford as a decision based on costs to demonstrate that they do up sticks and move based on cost alone. Costs include import tariffs or we as UK compete at labour rates comparable to Croatia and Turkey with the impact that has on our standard of living. A prospective 10% tarif on every car sold into the EU is significant for a manufacturer. So costs do matter and being in the single market( and the costs to UK as either a full or partial member) is critical.
The issue here is long term costs, not immediate fluctuations. So, yes in the long term manufacturers will move where their cost base is lowest. If we erect extreme protectionist tariffs, we will suffer hugely, as will the EU. However in the short and medium terms, we don't know what the balance is going to be - tariffs and exchange rates and government subsidies are all up for grabs. Any business that makes a significant movement in the next six months or so must have an amazing crystal ball.I did indeed reference Ford as a decision based on costs to demonstrate that they do up sticks and move based on cost alone. Costs include import tariffs or we as UK compete at labour rates comparable to Croatia and Turkey with the impact that has on our standard of living. A prospective 10% tarif on every car sold into the EU is significant for a manufacturer. So costs do matter and being in the single market( and the costs to UK as either a full or partial member) is critical.
I can't take a doom and gloom view on this, it feels extremely damaging to assume the worst and start putting up defenses. We've always been a trading nation and now we need to show we really mean business. Yes, it could be bad (very bad), but so was the 2008 crash and we survived that. We know the trade is out there, and we know that Europe wants stability and growth as much as we do. Why not aim for that?
EnglishTony said:
Turkey has a trade deal with the EU. Which Britain shortly won't have.
Ironic really. People were annoyed by the idea of losing their jobs to cheap foreign labour and now that's exactly what is going to happen. At least they won't be pushing up the house prices by living next door eh?
Remind us again where you live Ironic really. People were annoyed by the idea of losing their jobs to cheap foreign labour and now that's exactly what is going to happen. At least they won't be pushing up the house prices by living next door eh?
Derek Smith said:
Johnson's time in London might well come back to haunt him. There are some 'odd' deals that have not been fully explained. I've yet to find him making any decision that wasn't based on what is best for him. Regardless of approval ratings, he'd be a disaster for the tory party. May for all her manifest faults - and there are quite a few - she will give a statesman like impression.
I admit to be utterly perplexed at the widely held view that Boris would be a good PM. He's a journalist, a broadcaster, and former London Mayor. Being London Mayor seems to involve principally looking after transport in London (especially bus and cycle lanes) and PR. There's a webpage somewhere with Boris's 100 best [sic] achievements as Mayor. It's not impressive, unless he was in the running to be SoS for Urban Transport.
Tuna said:
The issue here is long term costs, not immediate fluctuations. So, yes in the long term manufacturers will move where their cost base is lowest. If we erect extreme protectionist tariffs, we will suffer hugely, as will the EU. However in the short and medium terms, we don't know what the balance is going to be - tariffs and exchange rates and government subsidies are all up for grabs. Any business that makes a significant movement in the next six months or so must have an amazing crystal ball.
I can't take a doom and gloom view on this, it feels extremely damaging to assume the worst and start putting up defenses. We've always been a trading nation and now we need to show we really mean business. Yes, it could be bad (very bad), but so was the 2008 crash and we survived that. We know the trade is out there, and we know that Europe wants stability and growth as much as we do. Why not aim for that?
Large companies especially like certainty, you can't expect them to wait until the end of our negotiations before deciding what to do. As you say, nothing much will happen in the 6 months and nor does it have to, nothing will cjhange for at least a couple of years but that's a couple of years in which they can start to prepare. I would expect any significant new investments to made in EU plants, any new models to be built at EU plants, any new jobs to be at EU plants, and any plant closures to be in the UK. Financial services are much more mobile than large manufacturing, I'd be surprised if any affected companies stayed around for long.I can't take a doom and gloom view on this, it feels extremely damaging to assume the worst and start putting up defenses. We've always been a trading nation and now we need to show we really mean business. Yes, it could be bad (very bad), but so was the 2008 crash and we survived that. We know the trade is out there, and we know that Europe wants stability and growth as much as we do. Why not aim for that?
I was talking to one of my customers today, they're already planning on moving more operations to their Polish subsidiary, just in case, and another considering opening a plant in Germany. There will be contingency planning going on at many UK based companies, none of it good for us.
RYH64E said:
Large companies especially like certainty, you can't expect them to wait until the end of our negotiations before deciding what to do. As you say, nothing much will happen in the 6 months and nor does it have to, nothing will cjhange for at least a couple of years but that's a couple of years in which they can start to prepare. I would expect any significant new investments to made in EU plants, any new models to be built at EU plants, any new jobs to be at EU plants, and any plant closures to be in the UK. Financial services are much more mobile than large manufacturing, I'd be surprised if any affected companies stayed around for long.
I was talking to one of my customers today, they're already planning on moving more operations to their Polish subsidiary, just in case, and another considering opening a plant in Germany. There will be contingency planning going on at many UK based companies, none of it good for us.
Absolutely, to unpick 4 decades of agreement and make new ones will take way more than 2 years, right now we don't even know what we need to discuss. uncertainty for 2 yrs + will kill UK industry.I was talking to one of my customers today, they're already planning on moving more operations to their Polish subsidiary, just in case, and another considering opening a plant in Germany. There will be contingency planning going on at many UK based companies, none of it good for us.
Greg66 said:
Derek Smith said:
Johnson's time in London might well come back to haunt him. There are some 'odd' deals that have not been fully explained. I've yet to find him making any decision that wasn't based on what is best for him. Regardless of approval ratings, he'd be a disaster for the tory party. May for all her manifest faults - and there are quite a few - she will give a statesman like impression.
I admit to be utterly perplexed at the widely held view that Boris would be a good PM. He's a journalist, a broadcaster, and former London Mayor. Being London Mayor seems to involve principally looking after transport in London (especially bus and cycle lanes) and PR. There's a webpage somewhere with Boris's 100 best [sic] achievements as Mayor. It's not impressive, unless he was in the running to be SoS for Urban Transport.
RYH64E said:
Large companies especially like certainty, you can't expect them to wait until the end of our negotiations before deciding what to do. As you say, nothing much will happen in the 6 months and nor does it have to, nothing will cjhange for at least a couple of years but that's a couple of years in which they can start to prepare. I would expect any significant new investments to made in EU plants, any new models to be built at EU plants, any new jobs to be at EU plants, and any plant closures to be in the UK. Financial services are much more mobile than large manufacturing, I'd be surprised if any affected companies stayed around for long..
It rather depends on what happens in Europe next. There are likely to be more referenda, possible more exits, shocks to the Euro, social unrest, strikes and further immigration problems. The underlying problems that prompted our vote are present right across the continent and Portugal, Italy, Spain and Greece are on the verge of collapse. Half of my team in London are from southern Europe for exactly that reason. We have a particularly attractive HQ as we have strong international links, access to the best graduates, a multilingual community and a great employment environment.Tuna said:
We have a particularly attractive HQ as we have strong international links, access to the best graduates, a multilingual community and a great employment environment.
And free and unfettered access to the single market including financial passporting, sounds like a glorious opportunity for those with the will to take advantage. As I've been saying for months, the UK isn't Greece, or Portugal, Italy, Spain etc, business is good, life is good, we're doing well, what could possibly go wrong...RYH64E said:
Large companies especially like certainty, you can't expect them to wait until the end of our negotiations before deciding what to do. As you say, nothing much will happen in the 6 months and nor does it have to, nothing will cjhange for at least a couple of years but that's a couple of years in which they can start to prepare. I would expect any significant new investments to made in EU plants, any new models to be built at EU plants, any new jobs to be at EU plants, and any plant closures to be in the UK. Financial services are much more mobile than large manufacturing, I'd be surprised if any affected companies stayed around for long.
I was talking to one of my customers today, they're already planning on moving more operations to their Polish subsidiary, just in case, and another considering opening a plant in Germany. There will be contingency planning going on at many UK based companies, none of it good for us.
I was in a meeting yesterday at an FTSE 250 company, regarding some business we are (were?) doing with them (professional services) related to their ongoing expansion.I was talking to one of my customers today, they're already planning on moving more operations to their Polish subsidiary, just in case, and another considering opening a plant in Germany. There will be contingency planning going on at many UK based companies, none of it good for us.
Their CFO was present, which wasn't at all expected, and the overriding theme was one of any UK investment now being on hold. Meanwhile they're continuing their expansion and investment in other EU countries.
If I hadn't been there and seen it myself I would think that whoever was typing this post was just bulls
tting, trying to reinforce the remainers' view that we're royally screwed.Unfortunately that's not the case. It's simple fact.
It's also a very easy decision for the company to make. Their products are sold across the EU (you'll know the brands very well) and across the portfolio the production is split over 5 manufacturing locations, so it's a simple of case of looking at where's best for a new production capability based upon X,Y and Z, where none of those factors is whether the location is in the EU or not.
Now that they have Brexit to throw into the mix, it's easier to rule out the UK as a potential location as there's a risk.
It's not a difficult decision for them; it's a very obvious one. I can't imagine many sane people would not do the same thing.
This is a company with market cap' sitting at around £0.5bn so not massive, but don't think for a minute that these sorts of decisions aren't being made right now in companies of all sizes.
We'll only see it on the news if it's a major financial institution or someone like Nissan, JLR or ARM cutting investment, but be assured it's happening.
I'm sure there is going to be change. The question is whether it's net positive or negative. There will be high profile movements, just as there were before the referendum. Except now, every last job announcement is going to be followed by a chorus of "Told you so" from whichever camp it most suits.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff