Multination Automaker Ford Motor said that the company will face a bill of around $1 billion if Britain moves out of the European Union with no deal, including World Trade Organization tariffs and the aftermath of a falling pound.
In a statement, Ford said that on the basis of internal calculations Brexit would hit Ford badly, costing the company around $500 million to $1 billion depending on the wide range of factors. Many automakers, such as Airbus have also cautioned about the impact a no-deal Brexit could have, including hiking tariffs, supply chain disruption, and massive job threats.
Britain will probably leave the EU in a couple of month. As PM Theresa May failing badly at winning support for her proposed and discussed deal, companies are quite tensed about the probability of a messy Brexit.
Bob Shanks, Ford Chief Financial Officer refused to reveal what impact no-deal exist will have on the company, but mentioned that Ford was already preparing for such an unfortunate scenario.
While speaking at the Ford’s headquarters outside Detroit, he said that they had been working on the consequences of a hard Brexit. He added that they don’t want this to happen, but they are waiting for a decision. A few days back, Shanks said that a no-deal exit wasn’t expected, but if it happens it is going to be ‘catastrophic’. Last March, Ford estimated that if a Brexit happens it would cost the company around $1 billion annually.
Ford has major operations in the UK, and is a leading Britain-based automotive brand, which is currently operating two engine plants in Britain. Nearly one in three cars of Ford are manufactured at the company’s German Cologne plant.
A couple of weeks back, Ford, employer of around 53,000 people in Europe, said that it is likely to cut thousands of jobs and might consider plant closures in Europe to retain its profit in the region. The leading automaker is an employer of over 12,000 people in Britain.
The uncertainty around Brexit is just adding to the woes of automakers in Europe, who are also facing regulatory alterations that are badly hitting the demand for diesel, dip in the demand from China and the US tariff-related concerns.
A ford representative said that the company recognizes that the uncertainty of the situation, and are therefore, monitoring the events closely.
Amid the growing concerns around Brexit, the UK’s leading car company Jaguar Land Rover announced that it will shun production lines in April for some days as it struggles with a grueling sales slowdown.