Free Press Journal

‘Bad’ Brexit to cost JLR $1.6 bn a year


London : Tata Motors-owned Jaguar Land Rover has warned the British government that a “bad” Brexit deal could jeopardise the country’s biggest carmaker’s investment plans, cost it over 1.2 billion pounds ($1.59 billion or Rs 8,262.60 crore) annually and may even force it to close down plants and exit from the UK.

Britain is set to exit the 28-member European Union (EU) in March next year, ending its over 40-year relationship with the bloc.

“A bad Brexit deal would cost Jaguar Land Rover (JLR) more than 1.2 billion pounds profit each year. As a result, we would have to drastically adjust our spending profile,” JLR CEO Ralf Speth warned in a statement late on Wednesday.

Speth’s comments came ahead of a crucial meeting between British Prime Minister Theresa May and her Cabinet at her country retreat of Chequers to hammer out the contours of a new post-Brexit customs arrangement with the European Union (EU) on Friday.

“I don’t want to threaten anybody, but we have to make transparent the implications of the move. We want to stay in the UK. JLR’s heart and soul is in the UK,” the CEO said.

“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees,” he said.

JLR is the UK’s largest carmaker, which has witnessed a complete turnaround in its fortunes since Tata Motors acquired the traditional British brands from Ford 10 years ago.

Speth said that under Indian ownership, the company has spent around 50 billion pounds in the UK in the past five years, with plans for a further 80 billion pounds in the next five. However, all that could be put in “jeopardy” with a bad deal with the EU as Britain prepares to exit the economic bloc in March next year.

“We, and our partners in the supply chain, face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market,” he said.

The JLR CEO even indicated the prospect of a UK exit. “If I’m forced to go out because we don’t have the right deal, then we have to close plants here in the UK and it will be very, very sad. This is hypothetical, and I hope it’s an option we never have to go for,” Speth was quoted as saying by The Financial Times.