A bad Brexit deal could also force Jaguar Land Rover to leave the UK, putting 40,000 jobs at risk.
It's a worrying time for the British auto industry. Jaguar Land Rover has already been forced to cut production later this year because of the potential repercussions of Brexit. Now, JLR's CEO Ralf Speth has warned that a so-called "hard Brexit deal" could lose the company £1.2 billion ($1.5 billion) a year in tariffs. "A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year. As a result, we would have to drastically adjust our spending profile", the CEO said in a statement.
"We have spent around £50bn in the UK in the past five years – with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome," the CEO said in a statement ahead of the government publishing its Brexit White Paper outlining proposed post-Brexit trading relationship with the EU. Speth is urging for the government to "maintain free and frictionless trade with the EU and unrestricted access to the single market." He added there needs to be "greater certainty" for Jaguar to continue investing heavily in the UK. Ultimately, a bad Brexit deal without a free trade agreement could force Jaguar Land Rover to leave the UK, putting at least 40,000 jobs at risk.
"If I'm forced to go out because we don't have the right deal, then we have to close plants here in the UK and it will be very, very sad. This is hypothetical, and I hope it's an option we never have to go for," Speth said in an interview with Financial Times. BMW also recently issued a similarly stark warning back in June. Like Jaguar Land Rover, BMW said it would have to close its Mini and Rolls-Royce production facilities if a trade agreement isn't reached.