Business leaders have urged the Government to reach agreement with the EU after the latest warning from Nissan about the impact of a 'no-deal' Brexit on its Sunderland plant
The firm issued a statement today saying a change to World Trading Organisation rules would have 'serious implications for British industry' and calling on UK and EU negotiators to work together.
Paul Butler, CEO of the North East Automotive Alliance, said Brexit uncertainty was adding to a number of problems facing the industry.
"These are indeed challenging times for the UK automotive sector - the impact of the new emissions tests, the declining diesel sales which has resulted in an acceleration towards electrification and the trade negotiations mean we are facing unprecedented challenges," he said.
"Multinational companies set up operations to serve key markets, so it’s no surprise that Europe accounts for more than 50% of all UK car exports. We also operate global just in time supply chains.
"Therefore, the threat and impact of costly WTO tariffs, the imposition of customs checks, red tape and fees on goods that currently move friction-free across borders is a serious threat to our competitiveness.
"The Nissan Sunderland plant is the UK’s largest automotive plant, producing 30% of all UK passenger vehicles. This is supported by a truly globally competitive supply chain, which combined accounts for 30,000 direct employees.
"It’s clear that we must encourage the UK Government and the EU negotiators to work towards a deal that is beneficial to all parties and secures free and frictionless trade in order that we remain globally competitive.
"The UK automotive sector is the most productive in Europe. If we are given a level playing field to compete I have no doubt the UK automotive sector and our region will continue to prosper.”
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The North East England Chamber of Commerce has been calling for clarity on Brexit for months.
Assistant director of policy Jonathan Walker said: "The need to maintain free and frictionless trade with our nearest and biggest export market is essential to ensure the continued success of some of our most important industries and the jobs they create.
"This warning comes as no surprise and adds further weight to concerns that have been voiced across the business community in recent months.
"Time is running out for Government to sit up and take notice of those who know the most about international trade. Businesses need clarity and the two sides negotiating Brexit have to work together to get a deal with the utmost urgency."
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Natasha McDonough, MD of MMC Strategic Marketing, chairs the chamber's Sunderland committee.
Getting Brexit right was vital for future generations, she said: "As a city we’re proactively working to boost our STEM skills levels, our transport infrastructure and a lot of this comes from the needs and development of Nissan within the city.
"This warning, therefore, has a tremendous impact on the entire supply chain in the North East to Nissan.
"It’s the economic impact on future generations to consider her,e as well as the immediate impact on our city and region."
Sunderland-born Centre for Cities economist Paul Swinney said the Nissan statement highlighted not only the need for a deal on Brexit, but also the importance of expanding Sunder;and's industrial base.
"Nissan’s comments once again underline the importance for Sunderland that the UK Government secures a trade deal with the EU as soon as possible," he said.
"Almost 60 per cent of the city’s exports go to the EU, and the ability of Sunderland and other cities to offer access to EU markets has no doubt been one of the factors in them being able to attract in investment from companies such as Nissan.
"It also highlights the problem of a city being too dependent on a single industry.
"So as well as the UK Government doing the sensible thing and getting a trade deal, local politicians need to continue to work hard to make sure that Sunderland is about more than just the automotive sector.
"The city needs a wider range of activities with a greater number of higher-paid jobs to make its economy more resilient to the varying fortunes of any one particular sector."
Professor Lawrence Bellamy, Academic Dean, of Sunderland University's Faculty of Business, Law and Tourism, said Nissan was well-placed to deal with Brexit, but needed to know what was coming.
Failure to each a deal would be bad news for everyone, he added: "Nissan has proved to be a highly resilient organisation.
"The world-class operation at Sunderland represents a fantastic collection of facilities, knowledge and skills. This is something which is extremely difficult to replicate and it has given the company a significant competitive advantage.
"The continued vagaries around the Brexit position are understandably causing concern. It’s understandable that, in the absence of clarity over critical issues such as ‘frictionless trade’, the company has voiced the need for early resolution.
"Well-run organisations such as Nissan have the capability to reconfigure their supply chain to deal with a range of challenges. However Nissan and their suppliers need time to respond. Certainty is a must.
"My personal view is that a no-deal position is bad for the UK and the EU. Both are significant markets, which both would wish to access. A win-win outcome is needed, but unpicking the complexity of the years of alignment takes time and sitting on key decisions to apply additional pressure with an impending deadline is more likely to lead to a lose-lose situation.
"Being a bystander of the negotiation process remains very frustrating and it is totally understandable that stakeholders such as Nissan should comment and encourage the impasse to end.”