Automotive industry in Great Britain: 800,000 jobs are at risk

Status: 05/19/2023 08:27 a.m

Opel parent company Stellantis is demanding that the British government renegotiate the Brexit deal with the EU. Otherwise there is a risk of plant closures and job cuts, because the production costs for electric cars are getting out of control.

Stellantis, one of the largest car manufacturers in the world and Opel’s parent company, has pointed the gun at the British government: Either they immediately renegotiate part of the Brexit trade agreement with the EU. Or one will have to close car plants in Great Britain and thousands of jobs would be affected.

The background is that stricter rules will apply to industrial products from next year. According to the Brexit agreement, 45 percent of the components of a British electric car must then come from the United Kingdom or the EU so that the car can be exported to the EU duty-free. From 2027 it will even be 65 percent.

Battery shortage in UK

In practice, this is hardly feasible, says Mike Hawes, chief executive of the British trade association of the automotive industry. Because the batteries, of all things, which account for a large part of the value of electric cars, are difficult to obtain here.

The battery industry can’t keep up with the demand, says Hawes. There is therefore a risk that car manufacturers will actually have to pay duties on exports from next year. Because e-batteries would probably have to be bought outside the EU, most probably in Asia. Great Britain is lagging behind when it comes to setting up its own battery production.

The British House of Commons voted by a large majority in favor of an agreement with the EU in the Brexit dispute.
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800,000 jobs at risk

Stellantis warns that if the tariffs drive up the costs for British e-cars too high, the factories will have to be withdrawn. Not only would the approximately 5,000 employees at Stellantis be affected, fears Andy Palmer, automotive expert and former manager at Nissan. According to Palmer, there are a total of around 800,000 jobs in the UK, in the entire automotive and supplier industry.

The British government must now act urgently: The most important thing now is to bring battery and other car parts manufacturers back to the United Kingdom, says Palmer.

Demand for better terms with the EU

In the meantime, Britain must continue to negotiate better terms with the EU. Other car manufacturers, including the German Association of the Automotive Industry, are now demanding this.

The opposition Labor Party is also involved. The once dazzling promise of many conservatives that everything would be better with Brexit is crumbling more and more. Labor leader Keir Starmer says Brexit deal isn’t working. Improving it to make Brexit work is Labor’s goal. It is therefore already possible that bad news like this one from the automotive industry will give Labor momentum for the next election in 2025.

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