The economic consequences of Brexit
Poll: The economic consequences of Brexit
Total Members Polled: 732
Discussion
Jockman said:
catso said:
sanf said:
Just imagine for a moment, post brexit, bear with me on this.....If the government goes down the route of offering a rebate to UK manufacturers of the 10%
Do you honestly think they would do that?Maybe I'm a bit too cynical and should have more faith in our leaders but I wouldn't trust any of them any further than I could spit them...
The first glimmers of illumination:
http://reaction.life/brexit-plan-secret/
Iain Martin is pretty well connected:
http://reaction.life/brexit-plan-secret/
Iain Martin is pretty well connected:
Martin said:
That said, as much as I can discern it based on conversations in the last few weeks, the plan seems roughly to be as follows.
The ideal aim is what is loosely termed a “soft Brexit”, meaning some kind of trade-off with control of borders (allowing quotas and an emergency brake) and an agreement that ensures the continuation of mutually beneficial key trading arrangements, for the German car industry and the City as the centre of euro-denominated trading. A variation of the EEA seems to be the way to do it. As I explained yesterday, Britain is not a supplicant. The big losers from any attack on the City of London will be the fragile EU and the Eurozone, currently contemplating an explosion at Deutschebank and in Italy’s banking sector.
But simultaneously the UK government is, sensibly, preparing for the shock of a hard Brexit taking place against a backdrop of EU decay, or even in extreme circumstances disintegration. That means arming the Bank of England (figuratively, not literally), getting the Treasury ready and preparing discretely for what will be a tricky process.
Much of the political chatter is too UK-centric. The great complication at the centre of the delay is the disintegrating political scene in the EU, which makes negotiation extremely difficult. The migration crisis, the rebellion of Hungary and its allies, and the banking problem, are creating a dangerous populist cocktail. Most of all, next year is an election year in France and Germany. France chooses its President in two rounds in April and May 2017, and the German federal elections are expected to be held in September or October next year. Mrs Merkel may not make it.
Seems eminently sensible if that is the approach. The interesting thing is the finessing of the FMOL question: a pitch to overlay it with quotas and the brake. Possibly therefore not breaching the freedom, but giving the government enough window dressing, backed up by actual control mechanisms, to allow it to present it as 'an end to uncontrolled immigration'. Will the colleagues go for it? Possibly not, which I suspect allows the fall back of hard brexit. Plan A+B as it were. The ideal aim is what is loosely termed a “soft Brexit”, meaning some kind of trade-off with control of borders (allowing quotas and an emergency brake) and an agreement that ensures the continuation of mutually beneficial key trading arrangements, for the German car industry and the City as the centre of euro-denominated trading. A variation of the EEA seems to be the way to do it. As I explained yesterday, Britain is not a supplicant. The big losers from any attack on the City of London will be the fragile EU and the Eurozone, currently contemplating an explosion at Deutschebank and in Italy’s banking sector.
But simultaneously the UK government is, sensibly, preparing for the shock of a hard Brexit taking place against a backdrop of EU decay, or even in extreme circumstances disintegration. That means arming the Bank of England (figuratively, not literally), getting the Treasury ready and preparing discretely for what will be a tricky process.
Much of the political chatter is too UK-centric. The great complication at the centre of the delay is the disintegrating political scene in the EU, which makes negotiation extremely difficult. The migration crisis, the rebellion of Hungary and its allies, and the banking problem, are creating a dangerous populist cocktail. Most of all, next year is an election year in France and Germany. France chooses its President in two rounds in April and May 2017, and the German federal elections are expected to be held in September or October next year. Mrs Merkel may not make it.
walm said:
In fairness, you may have persuaded me that the pressure on Merkel will be greater owing to the trade imbalance.
But once again looking at it from your original perspective of the "industry heavyweights" I still think they are in a FAR better position to cope than say JLR.
It just seems vanishingly unlikely that BMW (25% of volumes into UK - some of which are MINIs and made here so avoid any tariff problems) would say "listen Angela, with a 10% tariff we will be forced to build a huge factory in the UK to build our entire line-up of RHD cars and shut down a bunch of German capacity to offset.
That is a laughable suggestion.
They might re-tool the MINI plant in Cowley to do some 3-series perhaps since it is such a big volume car for them.
But a brand new massive factory to cover the full range?
I can't see the economics stacking up.
Volume is crucial.
It would make them more money just to take the 10% tariff hit and sell a few less cars in the UK than spend all that capex on a small volume facility here.
But that is EXACTLY what JLR will do.
They will ramp up Slovakian capacity and drop Solihull capacity in order to avoid the tariff.
BECAUSE THEY ALREADY HAVE THE FACTORY!
Likewise for Nissan.
They have factories in the EU.
So they can just shift capacity to avoid tariffs. Which means lost UK jobs.
Sure it will cost them more than it does now but unlikely it will be 10% more (labour just isn't that significant a part of COGS for auto OEMs).
Spot on.But once again looking at it from your original perspective of the "industry heavyweights" I still think they are in a FAR better position to cope than say JLR.
It just seems vanishingly unlikely that BMW (25% of volumes into UK - some of which are MINIs and made here so avoid any tariff problems) would say "listen Angela, with a 10% tariff we will be forced to build a huge factory in the UK to build our entire line-up of RHD cars and shut down a bunch of German capacity to offset.
That is a laughable suggestion.
They might re-tool the MINI plant in Cowley to do some 3-series perhaps since it is such a big volume car for them.
But a brand new massive factory to cover the full range?
I can't see the economics stacking up.
Volume is crucial.
It would make them more money just to take the 10% tariff hit and sell a few less cars in the UK than spend all that capex on a small volume facility here.
But that is EXACTLY what JLR will do.
They will ramp up Slovakian capacity and drop Solihull capacity in order to avoid the tariff.
BECAUSE THEY ALREADY HAVE THE FACTORY!
Likewise for Nissan.
They have factories in the EU.
So they can just shift capacity to avoid tariffs. Which means lost UK jobs.
Sure it will cost them more than it does now but unlikely it will be 10% more (labour just isn't that significant a part of COGS for auto OEMs).
It's not difficult to work out is it.
Still, the brexiteer view seems to be that the Jag CEO is clearly a bedwetter and can be ignored.
So that's OK then.
walm said:
Andy Zarse said:
walm said:
Well if you gave us the figures for VW then we would know who cares more.
Andy seems to be confused between MORE people caring and HOW MUCH each person cares.
Quite the opposite. Still, what I do know is money talks. You know what the other stuff does...Andy seems to be confused between MORE people caring and HOW MUCH each person cares.
walm said:
But once again looking at it from your original perspective of the "industry heavyweights" I still think they are in a FAR better position to cope than say JLR.
Oh I don't doubt it. But in my view it's not binary; there's room for both sides to prosper.walm said:
In fairness, you may have persuaded me that the pressure on Merkel will be greater owing to the trade imbalance.
But once again looking at it from your original perspective of the "industry heavyweights" I still think they are in a FAR better position to cope than say JLR.
It just seems vanishingly unlikely that BMW (25% of volumes into UK - some of which are MINIs and made here so avoid any tariff problems) would say "listen Angela, with a 10% tariff we will be forced to build a huge factory in the UK to build our entire line-up of RHD cars and shut down a bunch of German capacity to offset.
That is a laughable suggestion.
They might re-tool the MINI plant in Cowley to do some 3-series perhaps since it is such a big volume car for them.
But a brand new massive factory to cover the full range?
I can't see the economics stacking up.
Volume is crucial.
It would make them more money just to take the 10% tariff hit and sell a few less cars in the UK than spend all that capex on a small volume facility here.
But that is EXACTLY what JLR will do.
They will ramp up Slovakian capacity and drop Solihull capacity in order to avoid the tariff.
BECAUSE THEY ALREADY HAVE THE FACTORY!
Likewise for Nissan.
They have factories in the EU.
So they can just shift capacity to avoid tariffs. Which means lost UK jobs.
Sure it will cost them more than it does now but unlikely it will be 10% more (labour just isn't that significant a part of COGS for auto OEMs).
So BMW would never shift capacity to the UK, but JLR will definitely shift capacity to Slovakia? How's that then?But once again looking at it from your original perspective of the "industry heavyweights" I still think they are in a FAR better position to cope than say JLR.
It just seems vanishingly unlikely that BMW (25% of volumes into UK - some of which are MINIs and made here so avoid any tariff problems) would say "listen Angela, with a 10% tariff we will be forced to build a huge factory in the UK to build our entire line-up of RHD cars and shut down a bunch of German capacity to offset.
That is a laughable suggestion.
They might re-tool the MINI plant in Cowley to do some 3-series perhaps since it is such a big volume car for them.
But a brand new massive factory to cover the full range?
I can't see the economics stacking up.
Volume is crucial.
It would make them more money just to take the 10% tariff hit and sell a few less cars in the UK than spend all that capex on a small volume facility here.
But that is EXACTLY what JLR will do.
They will ramp up Slovakian capacity and drop Solihull capacity in order to avoid the tariff.
BECAUSE THEY ALREADY HAVE THE FACTORY!
Likewise for Nissan.
They have factories in the EU.
So they can just shift capacity to avoid tariffs. Which means lost UK jobs.
Sure it will cost them more than it does now but unlikely it will be 10% more (labour just isn't that significant a part of COGS for auto OEMs).
http://www.telegraph.co.uk/news/2016/09/28/ill-off...
May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
Jimboka said:
http://www.telegraph.co.uk/news/2016/09/28/ill-off...
May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
And this is based on the 2nd place runner for the conservative nomination.May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
Pipe dream. Ignoring the fact that sarkozy has a nice line saying one thing when running as opposed to once in power.
As I posted earlier it looks rather like May will invoke '50 early next year with an aim to get EEA membership with some knobs on. If not then the back up plan is hard brexit. I'd imagine the hard brexit line is a negotiation position, but the idea that she'll schedule a second ref based on the outcome of the French election, possibly to output a narciscist dwarf with an ego complex is pushing the bounds of reality
Jimboka said:
...a way out of the Brexit liars advisory protest vote ...caused by the Brexit liars.
...
Are you incapable of having a discussion without resorting to playground language and phraseology? ...
Pick your dummy back up and crack on. More people wanted to leave than stay. Live with it. No matter how much you tell yourself you are, you aren't going to be more intelligent, less racists, better looking and generally just better than the people who voted differently to you.
In fact resorting to the cretinous and insulting language you use I suspect the opposite is far more likely.
Jimboka said:
http://www.telegraph.co.uk/news/2016/09/28/ill-off...
May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
Old news, please keep up. May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
http://uk.reuters.com/article/uk-britain-eu-sarkoz...
Article said:
The French and German governments have said they view Brexit as irreversible. Berlin, Paris and their EU partners have also made clear they do not foresee undertaking politically sensitive changes to the EU treaty in the foreseeable future.
Laughable really. Comeback politician with zero power decides to re-write the EU treaty on his own with super special clauses to keep the UK in line. This will of course be unanimously accepted by the other 27 nations without alteration, approved by the EU Commission in a perfect U-Turn, then passed by the EU parliament and signed by all parties just in time for Christmas. Hurrah !!!!
Nissan now making noises about delaying or stopping investment in its U.K. facility until brexit negotiations are concluded
http://mobile.reuters.com/article/idUSKCN11Z1YA?il...
http://mobile.reuters.com/article/idUSKCN11Z1YA?il...
cookie118 said:
Nissan now making noises about delaying or stopping investment in its U.K. facility until brexit negotiations are concluded
http://mobile.reuters.com/article/idUSKCN11Z1YA?il...
Looks like Nissan want the government to commit to Sanf's suggestion. http://mobile.reuters.com/article/idUSKCN11Z1YA?il...
sanf said:
Just imagine for a moment, post brexit, bear with me on this.....If the government goes down the route of offering a rebate to UK manufacturers of the 10%
davepoth said:
So BMW would never shift capacity to the UK, but JLR will definitely shift capacity to Slovakia? How's that then?
Well JLR have already announced that it is their next new facility.Like Nissan above I can't imagine Brexit is encouraging them to think about expanding their Solihull and Sunderland plants - can you?
On the other hand the only cars BMW make/assemble in the UK right now are MINIs.
All the UK sold BMW models are assembled elsewhere.
They would have to build a BRAND NEW facility in the UK just to avoid an unknown level of tariff (which may even be zero) and then it can ONLY MAKE RHD cars (i.e. for the UK).
Which means the economies of scale (which is almost the be-all and end-all of auto manufacturing) don't work.
So yes.
There in lies the problem Mark.
If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
pim said:
There in lies the problem Mark.
If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
Article 50 means nothing except that negotiations for our withdrawal begin with a 2 year deadline for completion, there's no certainty until negotiations have been concluded and we know what deal we're getting, if any. If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
If manufacturers want certainty then planning new production at their EU plants rather than in the UK is the obvious choice.
pim said:
There in lies the problem Mark.
If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
That depends on how much value is placed on the workforce in this small Island and the conditions the government imposes on the employer.If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
There are many reasons why the car manufacturers chose to invest in the UK, the ability of the workforce to produce the goods efficiently whilst the government provides a good environment for business is key.
Speaking to the continental engineers I do occasionally, including the Germans, the British have a very different mind set which makes us very attractive to engineering companies, we are the fall back nation when it comes to developing new products or finding solutions to difficult engineering problems, even for the Germans. We should not undersell what we bring to the table.
What had always let down the UK manufacturers in the car industry was disastrous top management, absurd union policies and a lack of investment, the engineers, given the correct management and investment always produce the goods.
Ridgemont said:
Jimboka said:
http://www.telegraph.co.uk/news/2016/09/28/ill-off...
May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
And this is based on the 2nd place runner for the conservative nomination.May will postpone the triggering until the French/German elections have taken place. No point in negotiating with the outgoing administrations,
Sarkozy will win & offer a way out of the Brexit liars advisory protest vote ( mostly naff all to do with Europe, just idiots/unemployed/victim mentality, protesting against the perceived establishment).
Then this nonsense will end & we will remain in a mildly rearranged Europe,
Hopefully the wider world will forgive the national humiliation/embarrassment caused by the Brexit liars.
Economic/industrial suicide avoided.
Hurrah!
Pipe dream. Ignoring the fact that sarkozy has a nice line saying one thing when running as opposed to once in power.
As I posted earlier it looks rather like May will invoke '50 early next year with an aim to get EEA membership with some knobs on. If not then the back up plan is hard brexit. I'd imagine the hard brexit line is a negotiation position, but the idea that she'll schedule a second ref based on the outcome of the French election, possibly to output a narciscist dwarf with an ego complex is pushing the bounds of reality
jsf said:
pim said:
There in lies the problem Mark.
If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
That depends on how much value is placed on the workforce in this small Island and the conditions the government imposes on the employer.If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
There are many reasons why the car manufacturers chose to invest in the UK, the ability of the workforce to produce the goods efficiently whilst the government provides a good environment for business is key.
Speaking to the continental engineers I do occasionally, including the Germans, the British have a very different mind set which makes us very attractive to engineering companies, we are the fall back nation when it comes to developing new products or finding solutions to difficult engineering problems, even for the Germans. We should not undersell what we bring to the table.
What had always let down the UK manufacturers in the car industry was disastrous top management, absurd union policies and a lack of investment, the engineers, given the correct management and investment always produce the goods.
Murph7355 said:
Jimboka said:
...a way out of the Brexit liars advisory protest vote ...caused by the Brexit liars.
...
Are you incapable of having a discussion without resorting to playground language and phraseology? ...
Pick your dummy back up and crack on. More people wanted to leave than stay. Live with it. No matter how much you tell yourself you are, you aren't going to be more intelligent, less racists, better looking and generally just better than the people who voted differently to you.
In fact resorting to the cretinous and insulting language you use I suspect the opposite is far more likely.
Tryke3 said:
jsf said:
pim said:
There in lies the problem Mark.
If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
That depends on how much value is placed on the workforce in this small Island and the conditions the government imposes on the employer.If cars build in this country are having to pay a 10% inport duty to mainland Europe there could be problems.
It wouldn't take much for Nissan to set up a factory in say Antwerp which is a big port and create jobs there.
Article 50 should be brought forward then at least manufactures know where they stand.
At the moment it is political talk with no substance.We all know there is a big world out there but are they interested in dealing with a small Island of the coast of Europe?
There are many reasons why the car manufacturers chose to invest in the UK, the ability of the workforce to produce the goods efficiently whilst the government provides a good environment for business is key.
Speaking to the continental engineers I do occasionally, including the Germans, the British have a very different mind set which makes us very attractive to engineering companies, we are the fall back nation when it comes to developing new products or finding solutions to difficult engineering problems, even for the Germans. We should not undersell what we bring to the table.
What had always let down the UK manufacturers in the car industry was disastrous top management, absurd union policies and a lack of investment, the engineers, given the correct management and investment always produce the goods.
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