Brexit discussion thread III

Leonard Hofstadter

Jaguar Land Rover recently announced a cut in UK production due to 'uncertainty around Brexit' (to use their own words). I presume that's what the previous posts are referring to.

https://www.theguardian.com/business/2018/jan/22/jaguar-land-rover-to-cut-production-at-halewood/

flutered

Infini wrote: »

Whats honestly needed at this stage is not to hold back but to hammer these idiots who keep thinking they can have their cake and eat it. Hard cold reality is the only thing that needs to be dealt with this idiocy because its the only thing that will make them think. Maybe when buisnesses start triggering contingency plans ans their economy begins tanking proper will they wake up.

the folks at the head of brexit are future proofed against any downturn, actually most if not all have ulterior motives as regards brexit

captainspeed

captainspeed wrote: »

Jaguar Land Rover recently announced a cut in UK production 'due to Brexit' (to use their own words). I presume that's what the previous posts are referring to. I'm on a mobile device so I can't supply a link right now but look on the car site Autocar and you'll find it.

Brexit and Diesal uncertainty. As I pointed out earlier, UK car sales have dropped due to a number of factors. Worth noting as well, 2017 was a record year for them, so they would have ramped up production anyway.

irishash

Aegir wrote: »

Are we? I thought we were talking about a luxury manufacturer who has seen such a dramatic drop in sales they are struggling to find somewhere to store their cars?

If we are to take the unnamed luxury manufacturer as an example, why would it be surprising to you, with a 6% drop in UK sales, that they are finding it difficult to find room to store the cars produced?

A car manufacturer would not just ship extra cars abroad to free up space, that would be just moving the problem to another location.

And again I would call a 6% drop in sales, year on year, to be dramatic in any industry.

Professor Moriarty

Professor Moriarty wrote: »

Hmmm. So you mightn't see any issue with British car manufacturers being wholly owned by foreign companies as compared to, say, VW which is German owned, located and managed. No problem at all?

no more so than the largest brewer in Ireland being owned by a foreign company.

Please, spit it out, what is your point?

irishash

Aegir wrote: »

Brexit and Diesal uncertainty. As I pointed out earlier, UK car sales have dropped due to a number of factors. Worth noting as well, 2017 was a record year for them, so they would have ramped up production anyway.

2016 was a record year, not 2017 - you yourself linked to a business insider article that discussed both production and sales decreases in 2017, year on year.

irishash

irishash wrote: »

If we are to take the unnamed luxury manufacturer as an example, why would it be surprising to you, with a 6% drop in UK sales, that they are finding it difficult to find room to store the cars produced?

A car manufacturer would not just ship extra cars abroad to free up space, that would be just moving the problem to another location.

And again I would call a 6% drop in sales, year on year, to be dramatic in any industry.

so you didn't read the article then?

There are a number of reasons for falling sales, Brexit being only one of them

flutered

Peregrinus wrote: »

It was never going to be "put into law" until the Brexit deal was signed, sealed and delivered. What phase 1 was about was "making progress" on priority items that would be addressed in the Brexit deal, but they won't actually be addressed in the Brexit deal until there is an actual Brexit deal, which won't enter into force until actual Brexit.

And it's not going to be the UK "putting them into law". The first draft of the Brexit agreement is currently being drafted by the EU, and it will of course reflect the EU's interpretation of what the UK has agreed to in relation to the phase 1 issues. In due course the draft will be presented to the UK for discussion, finalisation and hopefully agreement.


The EU won't "shrug and give up". The EU, remember, presents the draft treaty to the UK. The UK either (a) accepts the draft, or (b) seeks to negotiate changes in the draft and then accepts the altered draft, or (c) seeks to negotiate changes in the draft but rejects the draft when it can't get changes that it regards as necessary, or (d) just rejects the draft without any attempt to get changes. Both of the breakdown scenarios there involve the UK being the one that pulls the plug. I think that's much more likely than the EU being the one to call a halt.

Of those four outcomes, I think (a) accepting the draft without alteration, and (d) rejecting the draft without any attempt to negotiate changes, and not very likely. Almost certainly there will be discussions over aspects of the draft agreement, some changes will be made, other changes will be sought but not made, and eventually the UK will either accept the package or reject it.

For what it's worth, I'm still of the view that the UK is more likely to accept the package, whatever it is, than reject it. That's what they've done at every point up to now.

May's strategy may be that she will in the end take whatever deal she can get from the EU, but she will string this out so that only happens very late in the piece. This would give the hard Brexiters a dilemma; at that point the option of a different deal would no longer be even a theoretical possibility, so if they shaft May they would have to do so on a platform of proceeding with a no-deal Brexit, and furthermore of burning the UK's diplomatic credibility by having the UK denounce a deal which it has freely signed. That's pretty extreme. While no doubt there are hard Brexiters who would sign up to this platform, I doubt that they could command a majority in the Tory party.

any deal done needs the blessing of parlament

irishash

Aegir wrote: »

so you didn't read the article then?

There are a number of reasons for falling sales, Brexit being only one of them

Do you honestly think that the diesel issues are worth at least 50% consideration to the brexit issues?

Also the new car industry in the UK is now lagging behind the rest of Europe, where car sales are rising. They also have the diesel issue (aside from UK legislation on same) to worry about.

Leroy42

Aegir wrote: »

I didn't raise the point, i responded to yet another anecdotal story.

Whilst I agree that the anecdotal story is not in itself the basis for anything, the point that it was raising (sales dropping and thus overproduction) was backup up the statistics provided by yourself and others.

Car sales are down, thus the only solutions (from a production plant POV) is to reduce production or to maintain production but increase inventory levels. The anecdotal story suggests, in that instance, that the production is being maintained and thus they having having problems with storing an increasing level of inventory.

You seem to making the point that the fall of in sales has more than just brexit involved (which I agree in part with, although I think the whole brexit cloud is having the effect of dampening down demand) but it also raises a further question as to how the UK plants will deal with the, increasginly likely and according to the likes of Rees-Mogg and Farange, a welcome outcome of tariffs.

This will lead to an increase in cost which will have to be borne somewhere. Do they end consumers in the EU take the hit? Surely that will give an advantage to manufacturers not hit by tariffs. Does the company take the hit, and in all likelyhood look to regain the hit by keeping wages/other costs down and thus impacting the on the workers? Or does the UK government subsidise the companies to cover the hit, again this will impact on the UK although the wider society rather than the direct workers.

But whichever way you look at it it cannot be seen as a positive to a export depended plant to have to deal with increased export costs and issues

Zubeneschamali

Aegir wrote: »

Brxit hasn't happened yet, did you not know?

Sure, it is going to get much, much worse that the 2017 numbers.

But posting the 2016 numbers is only useful as a baseline to show the coming collapse.

Ellian

Lemming wrote: »

Apologies for answering both at the same time; but the reason why I believe reality will prove to be a very cruel mistress for fanciful notions of Brexit is quite simple: "Money talks & bullsh1t walks".

There is only so far that blaming "them wots foreign" can take both the British media & more importantly its politicians before they run out of road and have to turn to face the masses who have been spoon-fed a diet of jingoistic bullsh1ttery and fake promises of riches and answer for why they've failed to deliver. It will not be pretty when that point is reached.

Agree with most of that but I think when that happens, it will be the fault of the EU, remoaners who failed to get with the program, Mrs. May (closet remainer sabotaged the whole thing) intellectuals,liberals or some combination of above. Anyone but the Brexit cheerleaders. I am well aware of Godwin's Law but in my mind there are parallels to the Stabbed in the back myth that took root in Germany post WW1 and no matter how bad it gets, I just cannot see any political reconciliation in the UK with arch-Brexiters ever admitting the idea was bulls**t from the get go. It's going to take extraordinary political skill, courage and vision to unpick the mess that the UK currently finds itself in, and I do not see a politician of that caliber appearing on the political landscape anytime soon.

flutered

First Up wrote: »

It is nothing of the sort. Free movement across the Irish border, coupled with free movement between Britain and NI means that goods of British origin, plus goods imported into the UK can freely enter the ROI and therefore the EU.

While Brussels might turn a blind eye to what is going on in the domestic Irish market, it will not tolerate an unregulated back door into the rest of the EU via the island of Ireland.

That raises the serious risk of checks on everything from Ireland arriving in EU ports or airports, as I elaborated earlier.

or else it will demand that the border will be on the seas, the dup will not get a say in that if it happens

flutered

LuckyLloyd wrote: »

Meanwhile, the press continue to poison hearts and minds:

https://www.express.co.uk/news/politics/918117/Brexit-news-UK-EU-Michel-Barnier-Iain-Duncan-Smith-Theresa-May-news-latest-politics

(Brexit Day: Britain to be FREE of EU three months early)

https://www.express.co.uk/news/politics/918157/Brexit-news-Theresa-May-Home-Office-overrules-mandarins-migration-transition-period

(More poo flinging at the treasonous civil servants)

https://www.express.co.uk/news/world/917865/EU-Barnier-UK-Brexit-Macron-Merke-tough-EU-stancel-Commission-Charles-Grant-punish

(The EU are CRACKING as they fail to row in behind Barnier's LUNACY)

And my personal favourite:

https://www.express.co.uk/news/politics/917962/brexit-latest-irish-uk-government-committed-december-agreement-irish-border-leo-varadkar

(The Irish government demand free trade arrangement, essentially twisting our position to be a Brexit positive)

Imagine if you're only view on the world was the Express? You'd be a committed Leave advocate let me tell ya.

imagne the state of ones brain been fed on such a diet 24/7

flutered

Aegir wrote: »

The only luxury car maker in the UK is Jaguar Land Rover and they can't make cars quick enough at the moment. UK sales are down 5% for a number of reasons, including Brexit, the cyclical nature of car sales and concerns over the future of diesel engines, but all of the manufacturers are showing increases in sales

https://www.smmt.co.uk/2018/01/2017-uk-car-manufacturing-declines-3-still-second-biggest-output-since-turn-century/

Edit: Actually, wrong fogures, it is a 3% drop, but hardly earth shattering and still very very strong

https://www.smmt.co.uk/2017/01/17-year-high-british-car-manufacturing-global-demand-hits-record-levels/

has not production of the opel astra been reduced to one shift from two by its new owner pugeot

Enzokk

Aegir wrote: »

no more so than the largest brewer in Ireland being owned by a foreign company.

Please, spit it out, what is your point?

Are there any reasons for those companies to keep manufacturing in the UK if they become a financial liability? I mean I can understand the emotional reason to keep a British owned company in the UK, but a foreign owned company with multiple manufacturing factories all over the EU and the world will not have that emotional attachment to keep the jobs in the UK.

Ireland would be in deep trouble if their locally produced brands that are owned by foreign companies find that costs in Ireland are much more than the EU if you started adding tariffs to your cost. Luckily we haven't decided to be that stupid, yet.

First Up

flutered wrote: »

First Up wrote: »

It is nothing of the sort. Free movement across the Irish border, coupled with free movement between Britain and NI means that goods of British origin, plus goods imported into the UK can freely enter the ROI and therefore the EU.

While Brussels might turn a blind eye to what is going on in the domestic Irish market, it will not tolerate an unregulated back door into the rest of the EU via the island of Ireland.

That raises the serious risk of checks on everything from Ireland arriving in EU ports or airports, as I elaborated earlier.

or else it will demand that the border will be on the seas, the dup will not get a say in that if it happens

Well they are most unlikely to support a government that agrees to it but the bigger question is how trustworthy would a border on the seas between Belfast and Stranraer or Heysham be.

irishash

irishash wrote: »

Do you honestly think that the diesel issues are worth at least 50% consideration to the brexit issues?

Also the new car industry in the UK is now lagging behind the rest of Europe, where car sales are rising. They also have the diesel issue (aside from UK legislation on same) to worry about.

yeah, i do think the concerns over Diesal tax are a major factor. I know several people that are looking to buy a new car, but don't want to buy something that may be worthless in three years time. These are all Mercedes, Audi and BMW drivers ass well.

Car sales have boomed in the UK and it is a cyclical purchase. you don't change your car every year so car sales are unlikely to keep going up.

Yes, they are lagging behind europe, but at the start of the cycle, they were ahead of europe.

Remember of course, half the cars sold in the UK come from the EU, so these are fgures that will concern not just the UK

Leroy42 wrote: »

Whilst I agree that the anecdotal story is not in itself the basis for anything, the point that it was raising (sales dropping and thus overproduction) was backup up the statistics provided by yourself and others.

Car sales are down, thus the only solutions (from a production plant POV) is to reduce production or to maintain production but increase inventory levels. The anecdotal story suggests, in that instance, that the production is being maintained and thus they having having problems with storing an increasing level of inventory.

luxury cars aren't made for stock though, most will be made to order, certainly finished units. There will be vanilla units made, demonstrators etc. but they won't have hundreds of fully finished cars rolling off the line without orders.

Leroy42 wrote: »

You seem to making the point that the fall of in sales has more than just brexit involved (which I agree in part with, although I think the whole brexit cloud is having the effect of dampening down demand) but it also raises a further question as to how the UK plants will deal with the, increasginly likely and according to the likes of Rees-Mogg and Farange, a welcome outcome of tariffs.

This will lead to an increase in cost which will have to be borne somewhere. Do they end consumers in the EU take the hit? Surely that will give an advantage to manufacturers not hit by tariffs. Does the company take the hit, and in all likelyhood look to regain the hit by keeping wages/other costs down and thus impacting the on the workers? Or does the UK government subsidise the companies to cover the hit, again this will impact on the UK although the wider society rather than the direct workers.

But whichever way you look at it it cannot be seen as a positive to a export depended plant to have to deal with increased export costs and issues

Farage is irrelevant now, he has had his five minutes of fame and his recent desperate attempt to drum up support for Irexit shows how far he has fallen.

There will be a deal between the EU and the UK, because the industry is just way too important to all parties for there not to be.

Of course Brexit has added to the fall in sales, but it isn't the sole reason, no one thinks this. To blindly say it is due to Brexit, is as incorrect as saying it isn't. It is a cyclical industry that has gone through a decade of sustained growth, the last seven years way above expectations, so it was always going to tail off.

Add to that, a double whammy of uncertainty about buying a diesal car and added uncertainty over Brexit accentuate this fall.

It isn't good for the UK car industry, but the sky is not falling in.

Professor Moriarty

Enzokk wrote: »

Are there any reasons for those companies to keep manufacturing in the UK if they become a financial liability? I mean I can understand the emotional reason to keep a British owned company in the UK, but a foreign owned company with multiple manufacturing factories all over the EU and the world will not have that emotional attachment to keep the jobs in the UK.

Ireland would be in deep trouble if their locally produced brands that are owned by foreign companies find that costs in Ireland are much more than the EU if you started adding tariffs to your cost. Luckily we haven't decided to be that stupid, yet.

Exactly. But I think that the point is simply being ignored rather than being misunderstood. The idea that a British company wholly owned by an Indian conglomerate or a German conglomerate is as secure as a German company founded in Germany, owned by Germans, managed by Germans and headquartered in Germany is a denial of reality.

Enzokk

Enzokk wrote: »

Are there any reasons for those companies to keep manufacturing in the UK if they become a financial liability? I mean I can understand the emotional reason to keep a British owned company in the UK, but a foreign owned company with multiple manufacturing factories all over the EU and the world will not have that emotional attachment to keep the jobs in the UK.

Ireland would be in deep trouble if their locally produced brands that are owned by foreign companies find that costs in Ireland are much more than the EU if you started adding tariffs to your cost. Luckily we haven't decided to be that stupid, yet.

this is groundhog day.

It would cost hundreds of millions to move a car plant. No one is going to do that on a whim.

But, ask yourself why Guinness keep St James' Gate open rather than close it and move it to Poland?

There is more to premium goods than just a name, as Waterford crystal found out at terrible cost.

Professor Moriarty

Professor Moriarty wrote: »

Exactly. But I think that the point is simply being ignored rather than being misunderstood. The idea that a British company wholly owned by an Indian conglomerate or a German conglomerate is as secure as a German company founded in Germany, owned by Germans, managed by Germans and headquartered in Germany is a denial of reality.

why?

Harika

Aegir wrote: »

why?

German automobile companies get subsidised from the state or county itself or are co-owned by them or are minority shareholder.

Professor Moriarty

Aegir wrote: »

why?

Well, apparently I can't say that the point is self-evident. You obviously don't understand the history of car manufacturing in Germany and its national importance. So I suggest that you research VW's 80 year long history of being owned, managed and located in Germany. Then research Tata's history in Britain. Then compare the two. If you then think that German owners, management and workers (300,000) have zero loyalty to Germany then you are wrong. If you think that Tata and VW have the same sentiment and loyalty towards Britain and Germany respectively, then you are wrong.

Peregrinus

J Mysterio wrote: »

This is not right. Patently both the EU and Ireland expect the UK to honour the commitment found in Phase 1.

Yes, we certainly do. But they aren't legally bound to honour the commitments made in Phase 1 until a treaty embodying those commitments enters into force, which won't happen - was never going to happen - until 19 March 2019.

If, between now and then, the UK decides not to honour its commitments, that's not illegal. The sanction will be no Brexit deal, no transition period, probably no trade deal with the EU, substantial damage to the UK's standing as a reputable negotiation partner which will probably adversely affect its ability to negotiate favourable trade deals with third countries. Hopefully those sanctions will be enough to persuade the UK that its best interests lie in honouring its commitments. But, if they aren't enough, there will be no legal sanction, because they won't have breached any legally-binding commitments.

Peregrinus

First Up wrote: »

It is nothing of the sort. Free movement across the Irish border, coupled with free movement between Britain and NI means that goods of British origin, plus goods imported into the UK can freely enter the ROI and therefore the EU.

While Brussels might turn a blind eye to what is going on in the domestic Irish market, it will not tolerate an unregulated back door into the rest of the EU via the island of Ireland.

That raises the serious risk of checks on everything from Ireland arriving in EU ports or airports, as I elaborated earlier.

You miss my point. The EU is happy either with (a) the whole of the UK staying in regulatory alignment, or (b) NI staying in regulatory alignment, plus a quasi-border between NI and GB. Either of these will satisfy the commitments that the UK has given to the EU, and therefore the EU will not - indeed, cannot - pick one and insist that the UK do it. Therefore, the draft text of the treaty will not commit the UK to one or other option; it will accommodate both.

Of course, if the UK does choose regulatory alignment in NI and regulatory divergence in GB, then the EU will be concerned to know that the quasi-border will be effective to protect the integrity of the single market, and no doubt the draft text for the treaty will contain language which gives the EU the assurance that it requires about this.

Peregrinus

Aegir wrote: »

if the deal was delivered at the 11th hour, what choice would there be?

That's my point. The longer that May clings to office, the lower the chance that, when she does jump or get pushed, she will be replaced by a hard Brexiter. Whereas if she goes now or soon, she might very well be replaced by a hard Brexiter.

Zubeneschamali

Peregrinus wrote: »

If, between now and then, the UK decides not to honour its commitments, that's not illegal. The sanction will be no Brexit deal, no transition period, probably no trade deal with the EU

That is the worst possible penalty. The brexiteers seem to be of the opinion that since this penalty will also hurt the EU, that the EU will back off and agree to whatever deal is on the table in the end, even if it tramples elements from Phase 1.

First Up

Peregrinus wrote: »

First Up wrote: »

It is nothing of the sort. Free movement across the Irish border, coupled with free movement between Britain and NI means that goods of British origin, plus goods imported into the UK can freely enter the ROI and therefore the EU.

While Brussels might turn a blind eye to what is going on in the domestic Irish market, it will not tolerate an unregulated back door into the rest of the EU via the island of Ireland.

That raises the serious risk of checks on everything from Ireland arriving in EU ports or airports, as I elaborated earlier.

You miss my point. The EU is happy either with (a) the whole of the UK staying in regulatory alignment, or (b) NI staying in regulatory alignment, plus a quasi-border between NI and GB. Either of these will satisfy the commitments that the UK has given to the EU, and therefore the EU will not - indeed, cannot - pick one and insist that the UK do it. Therefore, the draft text of the treaty will not commit the UK to one or other option; it will accommodate both.

Of course, if the UK does choose regulatory alignment in NI and regulatory divergence in GB, then the EU will be concerned to know that the quasi-border will be effective to protect the integrity of the single market, and no doubt the draft text for the treaty will contain language which gives the EU the assurance that it requires about this.

I get your point but I think you are missing mine. The EU will need a lot more than assurances and language about how a quasi border would operate. They will need the specifics, right down to the layout of the checkpoints, job specs of the staff and plenty more.

The Brexit process to date has featured a number of instances when the UK has had its "assurances" politely handed back with a list of detailed questions to be answered. In most cases they are still waiting.

CelticRambler

First Up wrote: »

The EU will need a lot more than assurances and language about how a quasi border would operate. They will need the specifics, right down to the layout of the checkpoints, job specs of the staff and plenty more.

That's where the transition period comes in. There's no point wasting time and effort drawing up detailed layouts and job specs until the "assurances and language" has been signed off and the agreement executed.

Professor Moriarty

Professor Moriarty wrote: »

Well, apparently I can't say that the point is self-evident. You obviously don't understand the history of car manufacturing in Germany and its national importance. So I suggest that you research VW's 80 year long history of being owned, managed and located in Germany. Then research Tata's history in Britain. Then compare the two. If you then think that German owners, management and workers (300,000) have zero loyalty to Germany then you are wrong. If you think that Tata and VW have the same sentiment and loyalty towards Britain and Germany respectively, then you are wrong.

Britain has a long heritage with regards the automotive industry and Jaguar and Land Rover play on this, it is a big selling point particularly in China and the US. TATA will not want to disrupt this for the fun of it.

TATA are just the current custodians of two brands that have been around for decades, just as BMW and Ford were before them. Oddly, neither of them chose to move Jaguar or Land Rover to cheaper manufacturing locations, because there is so much more to the marque than just a car.

How popular do you think Guinness would be if Diageo moved brewing out of Ireland? it's sales would drop massively over night in its largest market and it would lose an essential part of what it is. Not to mention it would lose its main R&D people and a major part of its heritage. Jaguar is the same.

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

First Up

CelticRambler wrote: »

First Up wrote: »

The EU will need a lot more than assurances and language about how a quasi border would operate. They will need the specifics, right down to the layout of the checkpoints, job specs of the staff and plenty more.

That's where the transition period comes in. There's no point wasting time and effort drawing up detailed layouts and job specs until the "assurances and language" has been signed off and the agreement executed.

If the UK commits to only NI staying in the CU, the detail of how that will work will have to be in place as part of the exit agreement and future relationship. They can use the Transition period to paint the customs post, not to argue about them.

First Up

Aegir wrote: »

Professor Moriarty wrote: »

Well, apparently I can't say that the point is self-evident. You obviously don't understand the history of car manufacturing in Germany and its national importance. So I suggest that you research VW's 80 year long history of being owned, managed and located in Germany. Then research Tata's history in Britain. Then compare the two. If you then think that German owners, management and workers (300,000) have zero loyalty to Germany then you are wrong. If you think that Tata and VW have the same sentiment and loyalty towards Britain and Germany respectively, then you are wrong.

Britain has a long heritage with regards the automotive industry and Jaguar and Land Rover play on this, it is a big selling point particularly in China and the US. TATA will not want to disrupt this for the fun of it.

TATA are just the current custodians of two brands that have been around for decades, just as BMW and Ford were before them. Oddly, neither of them chose to move Jaguar or Land Rover to cheaper manufacturing locations, because there is so much more to the marque than just a car.

How popular do you think Guinness would be if Diageo moved brewing out of Ireland? it's sales would drop massively over night in its largest market and it would lose an essential part of what it is. Not to mention it would lose its main R&D people and a major part of its heritage. Jaguar is the same.

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

A small fraction of Guinness is brewed in Ireland. It is brewed in over 40 countries - five of the biggest breweries are in Africa.

The largest market for Guinness is the UK (2nd largest Nigeria) and in both cases the beer is brewed locally.

You have a bit to learn about branding.

ilovesmybrick

Aegir wrote:

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

Aegir wrote:

How popular do you think Guinness would be if Diageo moved brewing out of Ireland? it's sales would drop massively over night in its largest market and it would lose an essential part of what it is. Not to mention it would lose its main R&D people and a major part of its heritage. Jaguar is the same.

Aegir wrote:

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

The problem with this argument is that James gate is only one of a number of Guinness breweries worldwide. As far as I recall the largest is actually on Nigeria. Many historically significant British automotive manufacturers are now based abroad, see Royal Enfield for example.

I think that you overestimate the importance for the global market of Jaguar being majorly based in the UK.

Leroy42

Aegir wrote: »

Britain has a long heritage with regards the automotive industry and Jaguar and Land Rover play on this, it is a big selling point particularly in China and the US. TATA will not want to disrupt this for the fun of it.

TATA are just the current custodians of two brands that have been around for decades, just as BMW and Ford were before them. Oddly, neither of them chose to move Jaguar or Land Rover to cheaper manufacturing locations, because there is so much more to the marque than just a car.

How popular do you think Guinness would be if Diageo moved brewing out of Ireland? it's sales would drop massively over night in its largest market and it would lose an essential part of what it is. Not to mention it would lose its main R&D people and a major part of its heritage. Jaguar is the same.

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

Do you really think people are buying Toyotas and Nissan Micras because they are built in the UK? Sure, there is a kudos attached to the British brand, but Brexit may well damage that as it may well be seen by many in EU as the British being a competitor.

The key problem they face is that the plants are likely to face increased costs both from tariffs and from increased logistical costs. Will those customers that currently buy the likes of LR and Jag continue to buy at higher prices? In some cases yes, LR/Jaguar is not really about the price but this really is niche in terms of the car manufacturing output and the key area will be the likes of Ford, Nissan etc.

Recently the Japanese manufacturers visiting 10 DS to try to get some updates on what the policy will be post Brexit, and if I recall correctly Nissan struck on early deal with the government (although I don't think the details were ever released).

If they are looking for reassurance and additional details from May, don't you think that signals that they are not happy with the current path?

Sam Russell

First Up wrote: »

A small fraction of Guinness is brewed in Ireland. It is brewed in over 40 countries - five of the biggest breweries are in Africa.

The largest market for Guinness is the UK (2nd largest Nigeria) and in both cases the beer is brewed locally.

You have a bit to learn about branding.

Not so. All Guinness is brewed in James Gate - Park Royal was closed more than a decade ago. They do brew a different Guinness in Nigeria, but from an extract from St James Gate.

Sam Russell

If the UK leaves the single market and the customs union, time critical manufacturing, as practised in the motor assembly business, will basically cease because delays at customs will make it impossible for them to continue production lines as they do currently. Now they will not shut down immediately, but new models will be missed and production will concentrate on the UK home market. They will also begin to do mixed model manufacturing - which puts up cost. For example, Nissan might start producing Renault variations of the Nissan models for the UK market. They might start using Ford engines and gear boxes.

BMW have already decided to not make the electric version of the Mini in Coventry.

Sales of luxury cars, such as BMW, Mercedes, Jaguar and Range Rover will not suffer as much as the lower sectors, but price does affect sales. If you can afford a BMW etc you will not be affected by a 10% tariff.

Professor Moriarty

Aegir wrote: »

Britain has a long heritage with regards the automotive industry and Jaguar and Land Rover play on this, it is a big selling point particularly in China and the US. TATA will not want to disrupt this for the fun of it.

TATA are just the current custodians of two brands that have been around for decades, just as BMW and Ford were before them. Oddly, neither of them chose to move Jaguar or Land Rover to cheaper manufacturing locations, because there is so much more to the marque than just a car.

How popular do you think Guinness would be if Diageo moved brewing out of Ireland? it's sales would drop massively over night in its largest market and it would lose an essential part of what it is. Not to mention it would lose its main R&D people and a major part of its heritage. Jaguar is the same.

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

Given the historical importance of car manufacturing in Germany and its significance to Germany's national identity, do you think, say, BMW has the equivalent loyalty to Germany as Tata has to Britain? Which would be better if you were looking for long term government investment? In the context of Brexit, do you think that the interests of Jaguar Land Rover would be better served by being wholly British owned rather than Indian owned? In the context of Brexit, do you think that Rolls Royce's interests would be better served by being wholly British owned rather than German owned?

First Up

Sam Russell wrote: »

Not so. All Guinness is brewed in James Gate - Park Royal was closed more than a decade ago. They do brew a different Guinness in Nigeria, but from an extract from St James Gate.

Forgot Park Royal had closed but its nonsense to say all Guinness is brewed in St James Gate. Like most international brands Guinness is brewed under licence in numerous countries. However Guinness directly owns the largest breweries in Africa - the ones that produce 40% of Guinness worldwide production. A "different" Guinness is still sold as Guinness.

Brands have their own momentum and in many cases have only an advertising link with the country of origin.

Enzokk

Aegir wrote: »

this is groundhog day.

It would cost hundreds of millions to move a car plant. No one is going to do that on a whim.

But, ask yourself why Guinness keep St James' Gate open rather than close it and move it to Poland?

There is more to premium goods than just a name, as Waterford crystal found out at terrible cost.

Companies will make a decision. Will the up front cost of moving a factory be less than facing tariffs and uncertainty in post-Brexit UK. We will not know until a few years after Brexit what will come to pass. You are correct that brands will have value to where their products are produced, but its not true for all brands all the time.

Aegir wrote: »

Britain has a long heritage with regards the automotive industry and Jaguar and Land Rover play on this, it is a big selling point particularly in China and the US. TATA will not want to disrupt this for the fun of it.

TATA are just the current custodians of two brands that have been around for decades, just as BMW and Ford were before them. Oddly, neither of them chose to move Jaguar or Land Rover to cheaper manufacturing locations, because there is so much more to the marque than just a car.

How popular do you think Guinness would be if Diageo moved brewing out of Ireland? it's sales would drop massively over night in its largest market and it would lose an essential part of what it is. Not to mention it would lose its main R&D people and a major part of its heritage. Jaguar is the same.

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

If Jaguar needs to be manufactured in the UK to sell then that is where it will be made. But I doubt other brands will face the same problem. There is no unique circumstance for all companies that they need to have the same business plan. Some may find it better to move, others will stay in the UK. It all depends on the deal struck with the EU. The EU will not lose manufacturing to the UK as I believe the chain for parts for most cars come from all over the world so tariffs for Germany is the same as the UK. But the UK will lose out if there are tariffs with the EU as any parts that need to be sent to the UK from within the EU will be more expensive for a company and thus the profit will be less.

So I think we all know who as the most to lose here.

Strazdas

Zubeneschamali wrote: »

That is the worst possible penalty. The brexiteers seem to be of the opinion that since this penalty will also hurt the EU, that the EU will back off and agree to whatever deal is on the table in the end, even if it tramples elements from Phase 1.

The most likely option at this point is that the UK will crash out with no transition period and no trade deal. The type of free trade deal with services they are seeking is a complete fantasy.

Enzokk

Strazdas wrote: »

The most likely option at this point is that the UK will crash out with no transition period and no trade deal. The type of free trade deal with services they are seeking is a complete fantasy.

To add the free trade deal with services they are seeking is a complete fantasy without staying in the customs union and single market.

blanch152

Aegir wrote: »

Britain has a long heritage with regards the automotive industry and Jaguar and Land Rover play on this, it is a big selling point particularly in China and the US. TATA will not want to disrupt this for the fun of it.

TATA are just the current custodians of two brands that have been around for decades, just as BMW and Ford were before them. Oddly, neither of them chose to move Jaguar or Land Rover to cheaper manufacturing locations, because there is so much more to the marque than just a car.

How popular do you think Guinness would be if Diageo moved brewing out of Ireland? it's sales would drop massively over night in its largest market and it would lose an essential part of what it is. Not to mention it would lose its main R&D people and a major part of its heritage. Jaguar is the same.

If you want a good example, just google MG Motors. Yes, they are still going but are now manufactured in China. They sell around 500 cars per year in the UK.

Since when is Ireland, Guinness' largest market?

https://en.wikipedia.org/wiki/Jaguar_Land_Rover#Sales

Jaguar Land Rover sells more units in China than the UK. The UK is no longer its largest market.

Skedaddle

At the end of the day, brands are brands. They can whip up all sorts of mythology around them for marketing purposes, regardless of where they're actually made. Most people don't care. They just want a Jaguar or a Range Rover because it's a Jaguar or a Range Rover, not necessarily because of it having been made in Britain.

I don't think made in the UK carries anything like the kind of branding anymore that Made in Germany does, even for those cars.

In general "Made in Britain" has been squandered as a concept due to short-term thinking in the UK and nobody really taking it all that seriously after the 1970s. It could have been a big deal, but that's not how it turned out.

I think they're kidding themselves if they think they've a brand anything like "Made in Germany" or "Made in Japan". They're simply not a high quality / high tech manufacturing economy with a reputation for quality. They've a few straggling car luxury car brands, and that's about it. They're not even brands that are owned in the UK anymore. They had a reputation for engineering, but you're talking about more than half a century ago. There are a few remnants of the legacy of engineering like Rolls Royce's aerospace engines etc but there aren't many and the ones they do have tend to rapidly get sold off e.g. the company behind the ARM microchip architecture which is used in mobile phone processors ranging from Qualcomm Snapdragon to Apple's iX chips. That's now owned by a Japanese company.

Take a look at British IT and telecoms equipment sectors : they'd loads of companies and products in the 1970s and 80s, and didn't seem to ever manage to get any global market share. All these old names huge infrastructural hardware vendors like GEC, English Electric, GPT, STC, Marconi, Plessey, etc etc are all gone and that's down to how things are run in business in the UK, not anything to do with the EU. Transportation manufactures like BREL and so on are all gone.

The present day UK's mostly about services industries and trade, not actually making things.

I remain totally unconvinced by the very stretched notion that the UK can somehow reinvent its industrial glory days. It's up against huge and far more competent and established competition with a global presence and I don't really see how it's possible to roll the clock back to 1958. There was absolutely nothing stopping the UK being as industrially successful as Germany, in fact the EU structures would have seriously helped it to be, if it had used any of them.

So, outside the EU they're hardly going to do any better than inside it. It just makes absolutely no sense.

It's like throwing away all the stuff you're good at and deciding that you're going to make a career out of something you're pretty mediocre or even bad at and in an area where you've limited skills. It's not likely to work out.

Skedaddle

Skedaddle wrote: »

At the end of the day, brands are brands. They can whip up all sorts of mythology around them for marketing purposes, regardless of where they're actually made. Most people don't care. They just want a Jaguar or a Range Rover because it's a Jaguar or a Range Rover, not necessarily because of it having been made in Britain.

It isn't just about where it is made, it is an association with the heritage and pedigree of a brand.

I mean, how many of us are proud to drive German cars and swear blind they are the best, when in fact, a lot of the ones we drive on these islands are made in South Africa or Brazil.

Skedaddle wrote: »

Take a look at British IT and telecoms equipment sectors : they'd loads of companies and products in the 1970s and 80s, and didn't seem to ever manage to get any global market share. All these old names huge infrastructural hardware vendors like GEC, English Electric, GPT, STC, Marconi, Plessey, etc etc are all gone and that's down to how things are run in business in the UK, not anything to do with the EU. Transportation manufactures like BREL and so on are all gone.

As are Nortel, Alcatel, Lucent, Motorola.... Is that down to how things are run in the UK as well, or maybe it is just the reality of modern globalisation.

Skedaddle wrote: »

The present day UK's mostly about services industries and trade, not actually making things.

and yet it is still the 9th largest manufacturer of goods in the world...go figure

Capt'n Midnight

" Once again, this is rumor control. Here are the facts. "
- Andrews from Alien 3

https://www.theguardian.com/business/2017/nov/23/car-production-rises-as-exports-make-up-for-falling-uk-demand

UK car sales have been declining since April and fell another 12% in October, with diesel transactions down nearly 30%.

More than four out of five UK-built cars were shipped abroad last month, the highest proportion this year, with most going to other European countries.

Two different things at work.

Internal sales have fallen for various reasons. If you look at debt levels in the UK and interest rates, and inflation and real drop in wages there's not a lot to look forward to. And they've already done the scrappage thing to shift cars so margins weren't great even when volume was.

External sales are good, but Brexit hasn't happened and the exporters are still benefiting from the drop in Sterling including wages.

Capt'n Midnight

Capt'n Midnight wrote: »

" Once again, this is rumor control. Here are the facts. "
- Andrews from Alien 3

https://www.theguardian.com/business/2017/nov/23/car-production-rises-as-exports-make-up-for-falling-uk-demand

Two different things at work.

Internal sales have fallen for various reasons. If you look at debt levels in the UK and interest rates, and inflation and real drop in wages there's not a lot to look forward to. And they've already done the scrappage thing to shift cars so margins weren't great even when volume was.

External sales are good, but Brexit hasn't happened and the exporters are still benefiting from the drop in Sterling including wages.

haven't we just done this?

Leroy42

The issue isnt really whether British manufacturing is still regarded as good, it is whether it being made in Britain is tge key.

As mentioned, BMW is a German brand even though production is also done outside Germany.

So will British manufacturers continue to pay additional tariffs and additional logistical costs rather than move production to the EU.

Not necessarily all of it, but simply moving any part of it is a negative rather than this land of endless bounty they have been selling Brexit as.

Aegir you are very good at countering the negatives here, but there is a worrying lack of any bonuses to Brexit. Most, if not all, of the claims during and since the campaign have be shown to be at best optimistic

Vronsky

I think a lot of people here are bringing their own pro-european feelings into the debate and somewhat confusing matters. While their is little chance of the UK getting a wonderful deal (benefits without obligations), there is also little chance of there not being a basic Brexit deal to keep the show in the road - this is mutually beneficial for both The UK and the EU.

When the alternative is no deal at all, Parliament will vote through whatever is arrived at.

listermint

Vronsky wrote: »

I think a lot of people here are bringing their own pro-european feelings into the debate and somewhat confusing matters. While their is little chance of the UK getting a wonderful deal (benefits without obligations), there is also little chance of there not being a basic Brexit deal to keep the show in the road - this is mutually beneficial for both The UK and the EU.

When the alternative is no deal at all, Parliament will vote through whatever is arrived at.

What will this deal look like .

In your words ?

Nody

Vronsky wrote: »

I think a lot of people here are bringing their own pro-european feelings into the debate and somewhat confusing matters. While their is little chance of the UK getting a wonderful deal (benefits without obligations), there is also little chance of there not being a basic Brexit deal to keep the show in the road - this is mutually beneficial for both The UK and the EU.

When the alternative is no deal at all, Parliament will vote through whatever is arrived at.

I think EU will offer a deal; the question is how far the Brexit militant wing are going to go in blocking it. For example I could see May's final deal being voted down as not good enough (i.e. Labour's claim of same access as now, some Remainers going against the PM etc.) but without enough time to get a new PM in place to sign a deal (or the new PM being an hardcore Brexiteer refusing to sign it) making UK crash out without a deal and nothing can be done until next general election (and EU are not going to wait for 2 years).

That's the scary part; not that there is not a deal on the table (EU will make sure there is one) but that between May's failure of government and the Tory Militant Brexiteers that it is not signed in time to be effective and Corbyn has not exactly shown himself as a man of action who'd do something about it except complain.