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Analysis

Sorry Brexiters, but JLR decision is indeed ‘despite Brexit’

by Luke Lythgoe | 05.07.2019

Brexiters like to mock anyone who says good economic news happens “despite Brexit”. They sarcastically flip the refrain, using it to suggest the media won’t acknowledge economic successes since 2016 without insisting Brexit made it more difficult or less likely. But that’s exactly what has happened in the case of Jaguar Land Rover’s decision today to build its new electric vehicles in the West Midlands.

Brexiters including Martin Daubney, the lads mag editor turned Brexit party MEP, and Arron Banks-backed news site Westmonster have already deployed the “despite Brexit” sneer after JLR announced it will be building its new electric version of the Jaguar XJ model in Castle Bromwich. The move will secure 2,700 jobs.

But the car manufacturer, owned by India’s Tata Motors, has very explicitly said this decision has been made despite Brexit – with none of the Brexiters’ sarcasm. JLR told Sky News: “We are making this investment because the ongoing Brexit uncertainty has left us with no choice, we had to act, for our employees and our business. We are committed to the UK as our home and will fight to stay here but we need the right deal.”

David Bailey, a professor of business economics at Birmingham Business School, corroborated JLR’s tricky position on the BBC’s Today programme. “Given where it is in its product lifecycle [JLR] has to make this decision. The capacity is at Castle Bromwich and there’s research and development nearby as well, so they’ve basically run out of time on this decision,” he said. Bailey added that without this investment the Castle Bromwich plant would “effectively be dead”.

The post-Brexit vote period has not been kind to the car industry, which is also facing challenges from falling sales in China and demand for diesel vehicles plunging. JLR has been one of the most outspoken manufacturers on Brexit. It announced cuts of 4,500 jobs from its West Midlands plant in January, following 1,500 losses in 2018. It has also warned that a no-deal Brexit could cost it up to £1.2 billion a year.

JLR has been put in a corner and has decided to gamble on the UK’s next prime minister not being reckless enough to plunge the country off an economic cliff. It is clearly uneasy about that gamble. For other manufacturers it might not make as much sense to take the risk, with more flexibility to move operations offshore. The uncertainty of Brexit has seen investment in the UK car industry fall by 47% since 2017 – and we are attracting just a fraction of the global investment in electric vehicles.

Brexiters are irresponsible to use their “despite Brexit” jibe to make out like the UK economy has gone swimmingly since 2016. Ultimately, it is thousands of people’s jobs that will be on the line if hardliners get the disastrous Brexit they want.

If we want jobs to stay in the UK, if we want to be open to international investors, we need to stick with the deal we’ve got with the EU today – it’s miles better than any Brexit on offer. That’s why we will be demonstrating on July 20 and saying “Yes to Europe”.

Edited by Hugo Dixon

5 Responses to “Sorry Brexiters, but JLR decision is indeed ‘despite Brexit’”

  • Strange piece Luke.
    Brexit may well have caused problems in the motor manufacturing industry but surely the domestic market needs to be brought into the equation. If tariffs are to be levied on imports then home grown products will become much more attractive to the consumer. Electric vehicles are the future and it would seem sensible for JLR to want to produce them in this country for the domestic market and eventually increase production for export come any free trade deals. With regards to traditional diesel and petrol vehicles it is certain that there will be a world wide reduction in production. The change is coming regardless of our membership of the EU.

  • I cannot see the convictions of Brexiters being dented by any setbacks. This has not happened so far despite weakening of the pound etc; setbacks can make people even more determined. It took for Germany to be completely razed to the ground before the goose stepping stopped there, and I can’t see that happening here even if the UK breaks up.

    However I think Peter makes some good points below, “Home made” products are likely to come into their own if Brexit happens.

  • Cannot wait to hear the brexit cries of ‘bully! Mommy, mommy she is a bully, help!’ once they come face to face with the new EU Commission president, Ursula “Uschi” von der Leyen. No more Mr/Ms nice guy will be the refrain.

    Just as we would look with fond memories of the EU should we come under the US hammer, the brexit team will dream of the good old days of the original EU negotiators.

    Peter is right, home grown products are best and once we have had our fill of marmalade we can get busy lining up for a new electric Jaguar. At less than 9 pounds an hour wages for most of us, I cannot see the home grown products finding many home grown consumers. Tarifs levied by the WTO will make it a difficult sell as an export.

    Anyway, doesn’t Tata own Jaguar? That make it about as British as Rolls Royce or coca cola.