Brexit

[jpkeates]

If Nissan Sunderland closes down, as Nissan have said that it will if there's no deal to allow components to move as they do now, that's 7500 out of work.
And there are thousands more who work for companies that supply Nissan.

That's a single event that a no deal brexit will bring about.

When Nissan last threatened to close the plant, the government gave them £80m not to, because the damage to the area would be too terrible to contemplate.
Now it's just one of many things that we're going to let happen.

[islandgirl]

Interesting. Do you think it is really about Brexit or about falling sales and demand for electric vehicles? I found this from Feb this year about the decision not to build one model in the UK

Gianluca de Ficchy said the decision was a mixture of investment needed for emissions regulations and reduced sales forecasts but added uncertainty over Brexit had also played a part.

He also said "Our workforce in Sunderland has our full confidence, and will continue to benefit from the investment planned for Juke and Qashqai."

Not quite closure of the plant with 7500 out of work - or is there an official statement from Nissan to that effect that i have missed?

[jpkeates]

The model than Nissan is suspending in Sunderland isn't electric.

If we leave with no deal, it will be impossible to mass manufacture motor cars in the UK until we have a deal that allows components to pass through customs as they do now.

That's not a view based on my views about Brexit, it's based on my knowledge of how cars are manufactured.
That's nothing to do with tariffs (which would be high) or the added cost of vehicles and components, it's simply about the speed at which goods pass through customs points.

At the moment, provided the trade is within the EU, it's frictionless at UK borders - there's enough of a barrier caused by geography to make the UK less attractive than other European nations and the UK has spent a vast amount of money investing in infrastructure and (basically) bribing companies to build in the UK rather than elsewhere.

We didn't build a channel tunnel to help people go on holiday!

Because no one knows how we will trade once we leave the EU, it is not really possible for Nissan or anyone else to state categorically what they will do, and they aren't likely to want to take an explicitly political position.

But when there's any kind of difficulty that slows cross channel logistics, after a day or two production is impacted in UK car manufacturing.
Usually, it can be mitigated by bringing critical items through different routes (Holland - Harwich instead of Calais = Dover) or they switch production to utilise local stock.
But, more than a few days (or the post Brexit issue that Holland and France would both have the same issue) and the whole chain breaks down.

The kind of delays that are being forecast by the government - a reduction of cross border trucks by 40%-60% and delays of 1.5 to 2.5 at ports would end production in a few days.

That's not a project fear thing, bad weather and the French propensity to strike means it happens often enough that we know exactly what the effects are.

To give some idea of the scale involved - each day 1100 trucks enter the UK from the EU with automotive freight. 5000+ cars are exported along with just under 6000 engines are exported.

It's a vast industry and it evolved to its "just in time" model during our membership of the EU. It wasn't possible before and it won't work afterwards without a trade deal that allows it to work as now.

[islandgirl]

but because it is a vast industry it WILL be sorted and quickly. I think you misunderstood about electric vehicles. You say "The model than Nissan is suspending in Sunderland isn't electric." Exactly. They are building more and more electric vehicles so this one is not now needed.

Interestingly enough this is in today's news: "BERLIN--German automotive giant Volkswagen AG said Tuesday that its executive board has delayed final approval for building a new car plant in Turkey in light of the country's incursion into northern Syria.Volkswagen, which is planning to build a facility in Turkey with the capacity to assemble around 300,000 cars a year, is the first big German company to reconsider an investment in Turkey in the wake of the Ankara's controversial move into northern Syria and its attack on Kurdish forces in the wake of the U.S. decision to withdraw from the region."

Turkey is not in the EU.....in fact we are constantly told the previous fears about it joining are unfounded. Yet the plant is going to be built there. And "Major producers such as Fiat, Renault, Ford, Hyundai and Toyota produced more than 1.3 million motor vehicles in Turkey last year."
Whichever market these cars are destined for, the parts presumably have to come from the EU. They manage it, why can't we?

[jpkeates]

Turkey has a customs union agreement with the EU and there is frictionless trade for all industrial goods (excluding processed agricultural goods).
So automotive trade is frictionless.

[islandgirl]

Exactly my point - easily done!

[jpkeates]

Discussions between Turkey and the EU (then EEC) began in 1959, the first limited agreement was in 1963 and the deal was signed in its current form in 1995.
Piece of cake.

[islandgirl]

It could be ein Stück Kuchen - the trade is there, just needs to be handled slightly differently. I guess I am a glass half full kinda gal

[theartfullodger]

We already have the best deal right now.. ..

[Macromia]

I think that you need to work out what it is that you actually want from 'Brexit', islandgirl.

You say that you knew what you voted for. You say that you want a 'no deal Brexit'.
You now seem to be suggesting that we should agree to be in a customs union with the EU (which is what we would temporarily have if we agreed an exit deal).

We could leave without any sort of deal, and then start to negotiate a deal that puts us in a customs union, but any deal would take (at the very least) several months to negotiate (more likely several years), and would not be more favourable than what we have been offered, or what we already have now. Even a delay of a few months would be enough to potentially result in the closing of even a major manufacturing plant.

The UK can very, very easily have excellent trading arrangements agreed with the EU (the best deal that is possible). All that is required is that the government revoke article 50.

[islandgirl]

"Even a delay of a few months would be enough to potentially result in the closing of even a major manufacturing plant." Once I had picked myself up off the floor having collapsed in fits of laughter I thought should I bother doing as I am told...? Pointless exercise methinks but perhaps the words Trade Deal rather than Customs Union will help....

[jpkeates]

The trade deal between the EU and Canada took seven years.
When Greenland left the EU it took 3 years to put a replacement deal in place (and Greenland's economy is basically fishing).

[Macromia]

So, you don't understand that even large businesses aren't prepared to accept losses that they think they can avoid by moving production elsewhere (especially when they don't have any definite idea when things will end, and will have good reason to suspect that it will take years for any sort of deal to be agreed)?

You also don't under stand that a "customs union" is a kind of trade deal? The only reason countries enter into 'customs union' agreements is to facilitate the movement of goods between countries - i.e. to make trade easier.

This really isn't something that anyone should be laughing about. Large businesses that rely on easy trade between the UK and other EU countries might move their operations out of the EU, or might accept losses/lower profits for a while in the hope that things will improve. Smaller businesses won't be able to cope with even short term losses and will more than likely close down.
Denying that leaving the EU is going to cause problems for businesses really doesn't help. There is literally no one claiming that leaving the EU is the only problem affecting Nissan (or any other business). Businesses are negatively affected by a whole variety of different issues all of the time, they close when the combination of negative issues becomes too much - leaving the EU without any deal in place is likely to be the tipping point for many.

[islandgirl]

All I can say folks is let's see. Having worked for British and American companies in my time (some very large ones too) I know a little of how it works and understand more than any "thick lied-to naive uneducated Leaver" ought to! Let us see, in due course if it brings prosperity or chaos. My bets are on the former as you may have gathered....

[Macromia]

Having worked for British and American companies in my time (some very large ones too) I know a little of how it works and understand more than any "thick lied-to naive uneducated Leaver" ought to!

So you'll know that many businesses have narrow profit margins and/or rely on deliveries being on time (both into and out of the business).
Most businesses can cope with occasional interruptions in supply (e.g. a few days as a result of weather/strikes), although they may take a financial hit from any delays, but they are less likely to be able to cope with longer term disruption - especially when this results in financial loss.
If a Brexit deal is not agreed, there will be delays importing/exporting goods, and at the same time companies will have to cope with increased costs, and probably reduced sales.

Let us see, in due course if it brings prosperity or chaos. My bets are on the former as you may have gathered....

In the long term the UK will prosper following any form of Brexit (whether we leave without a deal or with one). That really isn't in any doubt. However, we would also prosper in the long term if we remained within the EU.
The question is whether The UK would do better outside of the EU than within it - and that is something that we will never know, because we can't try both options out to see which one produces the best results.

What we do know is that there are negative consequences to leaving the EU in the short term, especially if we leave without any form a deal. Some of these negatives, perhaps most of them, can have their effects mitigated, but this still comes with a cost.

The question remains:
"How will the UK, and British citizens, benefit from leaving the EU?" - and this question is still unanswered.