There is ‘no good Brexit’ for UK car parts boss

A Mini on the assembly line in Oxford, UK. Car-sector companies are shaking up manufacturing processes because of fears that Brexit will make trade harder. (AFP)
Updated 17 November 2018

There is ‘no good Brexit’ for UK car parts boss

CANNOCK: “There is no good Brexit!” insists Greg McDonald, chief executive of Goodfish Group, a UK-based company making plastic components for the country’s key car sector.

The small company, nestled in the Midlands not far from Birmingham, the UK’s second largest city, sells one third of its products to mainland Europe, with weekly shipments to Poland and one every 10 days to the Czech Republic.

In addition, most of what the group sells in the UK ends up being shipped overseas.

To help Brexit-proof the business — and the whole auto industry is worried about potential disruption at ports — Goodfish is looking at possibly setting up production facilities in central or eastern Europe.

“It’s our way of combating potential loss of business and also (ensuring) future growth,” McDonald, 56, told AFP.

“If you’re a business owner and all your investment and all your wealth is tied up in your business, which is mostly the case (here), you don’t wait to be told by the politicians what the final outcome is.

“You make plans to address the situation as you see it,” said McDonald, who has lived in France, Germany, Ireland and Switzerland.

Goodfish is not alone among car-sector companies shaking up manufacturing processes because of fears Brexit will ultimately make trade harder.

The industry body, Society of Motor Manufacturers and Traders (SMMT), has blamed Brexit uncertainty for plunging UK investment, warning about the harmful impact of new, post-Brexit customs controls.

The Midlands is home to 40 percent of the UK’s 186,000 auto sector workers, including Indian-owned Jaguar Land Rover (JLR), which has already taken the plunge into Europe.

JLR recently opened a €1.4-billion ($1.6-billion) factory in Nitra, western Slovakia, its first in continental Europe ahead of Britain’s planned EU departure on March 29.

UK companies’ manufacturing processes are complicated by the need to import raw materials, which have become more expensive owing to a sliding pound — caused in turn by Brexit jitters.

“Of course we’re suffering from weak sterling because of the fears of Brexit,” McDonald said.

UK manufacturers who have survived previous difficult financial cycles “are the exporters,” McDonald pointed out.

A young company with 125 staff, Goodfish was founded in 2010 and has annual turnover of more than £10 million ($12.8 million).

How it builds on its success is likely to depend largely on the final terms of the UK’s post-Brexit trade agreements.

The draft document agreed with Brussels this week states that during a transition period ending on Dec. 31, 2020, EU law will apply to give businesses time to prepare for new ties.

This means the UK will continue to participate in the EU Customs Union and the Single Market.

It allows Britain continued market access to the remaining 27 EU countries but it must respect the rules on free movement of goods, capital, services and labor without having any say in EU decision-making.

“Of course a customs union gets around most of the problems but having to follow the rules of the EU without actually having any say on what these rules are — that’s definitely a worse position” than now, McDonald said.

Time to tear down Mideast trade barriers, Davos panel hears

Updated 23 January 2019

Time to tear down Mideast trade barriers, Davos panel hears

  • Mohammad Al-Tuwaijri, Saudi minister of economy and planning, said a move to ease movement of traffic across the border could be followed elsewhere
  • Majid Al Futtaim CEO Alain Bejjani: Now there’s this seriousness between Saudi Arabia and the UAE, I hope it gets to frictionless trade

DAVOS: Amid global trade wars and the rise of protectionism, Middle East economic and business leaders on Tuesday issued a clarion call for the exact opposite: To ease customs restrictions in the region.
A panel at Davos heard how an agreement between Saudi Arabia and the UAE to boost cooperation — including the reduction of obstacles to trade across the shared border — could be a blueprint for the wider region.
Mohammad Al-Tuwaijri, Saudi minister of economy and planning, said a move to ease movement of traffic across the border — partly through the use of technology — could be followed elsewhere. “We want to establish a reference for others to follow,” he said.
Alain Bejjani, CEO of retail and leisure group Majid Al Futtaim, said “frictionless trade” would give the region a boost.
“Now there’s this seriousness between Saudi Arabia and the UAE, I hope it gets to frictionless trade,” he told Arab News on the sidelines of the Davos forum.
Bejjani declined to say whether that would involve a customs union, a common market or a common currency. Given the imposition of trade tariffs between the US and China, and the rise of Brexit, globalization — something espoused by many Davos delegates — is seen as on the wane.
But Bejjani said breaking down barriers in the Middle East could help it better compete with Western Europe and the US.
“For the past almost century now… we’ve been ingeniously working on making sure we put barriers across the Arab world. The reality is we have a market that’s as big as most of the largest markets in the world… if we’re smart enough to work together,” he told the Davos panel.
Khalid Al-Rumaihi, chief executive of the Bahrain Economic Development Board, agreed that Saudi-UAE cooperation was “a great template” for others to follow.
Aside from “opening up” Middle East markets, Al-Rumaihi said harmonizing regulation in the region would also be beneficial to businesses and entrepreneurs.
“If the rules are changing in each country, if they’re not harmonized, it’s very difficult… for an entrepreneur (to understand) the regulatory environment. So they don’t scale very quickly, and that’s something we need to solve,” he said. Talk of freer trade within the Middle East is especially relevant when it comes to the Palestinian territories, which are subject to Israeli occupation and blockade.
Palestinian Prime Minister Rami Hamdallah said freer movement and a reduction of duties would help the economy grow.
“We need to see our products being waived (of) customs,” he said. “We need mobility — we’re under occupation.”