Ford could lose £613m this year as a result of hard Brexit

http://bit.ly/2S3wiNO

Tristan Shale-Hester 2019-01-24 16:25

The American giant predicts “$800 million headwind” if the UK leaves the EU with no deal

Ford has predicted it could lose up to $800 million – equivalent to £613 million – as a result of a hard, no-deal Brexit.

Executives at the American manufacturer fear the combination of World Trade Organisation (WTO) tariffs and the weakening pound could severely damage profits in the first nine months following a no deal Brexit.

• Ford to cut ‘thousands’ of European jobs, eyes up alliance with VW

Ford has previously issued stark warnings about how its European operations could be affected by Brexit, and other manufacturers have echoed the same sentiment. Jaguar Land Rover, which is also facing difficulties due to a downturn in sales of diesel cars, previously said a hard Brexit could cost it £1.2 billion a year. Ford has around 13,000 employees in the UK, equating to about a quarter of its 54,000 European workers.

The business’ executives told analysts on Wednesday that the full extent of any job losses in the UK and the EU are unlikely to become clear until later in the year.

The £613m figure is broadly consistent with a claim made by Ford’s European chief Steven Armstrong over a year ago, when he remarked a no-deal Brexit could cost the company around £767m in the first year after the UK leaves the EU.

• Toyota boss warns no-deal Brexit should be “avoided at all costs”

Reports indicate Ford was prepared to disclose the £613m estimated figure during an earnings call with Wall Street analysts on Wednesday, but did not do so because no Brexit-related questions were raised.

A spokesperson for Ford told Auto Express: “Our planning assumptions for Brexit include a negotiated exit as the most likely outcome, with a transition period during 2019 and 2020 if the withdrawal package is approved by UK Parliament.

• Brexit offers “no advantages” for UK carmakers, warn MPs

“However, we recognise that the situation is highly uncertain, and are monitoring events closely.

"In the event of a no deal scenario the resulting border friction, deteriorating economic outlook, coupled with likely further Sterling devaluation, and introduction of WTO tariffs would severely impact Ford’s operations in the UK and across Europe and could potentially result in an $800 million headwind in 2019.”

Read our review of the new Ford Focus here...

from Featured Articles http://bit.ly/2CIaU6N