CEO Speth says without ‘the right deal, then we have to close plants here in the UK’
LONDON — Jaguar Land Rover CEO Ralf Speth has warned Theresa May’s government that a “bad Brexit” deal without “frictionless” access to the European Union would jeopardize as much as 80 billion pounds ($106 billion) in investments over the next five years and could force the automaker to leave the UK.
In an interview with the Financial Times, Speth said JLR would leave Britain if this were the only option “to save the company.”
“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 told the newspaper.
The extra costs and delays in parts deliveries coming from outside the UK in the event of a bad deal would cut profit by 1.2 billion pounds a year, making it unprofitable to remain in the UK, Speth said.
“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. Jaguar Land Rover’s heart and soul is in the UK,” Speth told the FT.
The warning came on the eve of a crucial Cabinet meeting on Friday where Prime Minister May will try to find consensus on a compromise plan for the future economic relationship with the EU.
It also comes less than a month after Jaguar Land Rover, based in the West Midlands, central England, promised to retool its Solihull plant near Birmingham for a new generation of electric cars.
“We have to decide whether we bring additional vehicles, and electric vehicles with new technology with batteries and motors into the UK,” Speth told the FT. “We have other options. If I do it here and Brexit goes in the wrong direction, then what is going to happen to the company?”
The company has already said it will move production of its Land Rover Discovery to Slovakia from Solihull by early next year.
JLR is the latest automotive manufacturer to sound the alarm amid government indecision that’s increased the chances of a so-called hard Brexit.
BMW Group and plane maker Airbus have also said they may pull investments if Brexit makes trade more difficult.
“If the UK automotive industry is to remain globally competitive and protect 300,000 jobs in Jaguar Land Rover and our supply chain, we must retain tariff and customs-free access to trade and talent with no change to current EU regulations,” Speth said in separate comments.