No-deal Brexit 'lose-lose' for EU and UK: BMW chief

August 01, 2019
Employees work on a BMW 3 Series car during a media tour at the new plant of German automaker BMW in San Luis Potosi, Mexico, in this June 6, 2019 file photo. — Reuters
Employees work on a BMW 3 Series car during a media tour at the new plant of German automaker BMW in San Luis Potosi, Mexico, in this June 6, 2019 file photo. — Reuters

FRANKFURT AM MAIN, Germany — The chief executive of German high-end carmaker BMW said on Thursday that British Prime Minister Boris Johnson should "listen to the economy" and "the people" and avoid a no-deal Brexit.

"A hard Brexit is not in the interests of industry nor the country," Harald Krueger told reporters during a telephone conference on BMW's second-quarter financial results.

"If it comes to a hard Brexit, there's only lose-lose" for all concerned, he added.

Switching from German to English, he implored Johnson to "listen to the economy and listen to the people" by striking a deal with Brussels.

"He ought to be in dialogue with business on these questions, and I hope a pragmatic compromise solution can be found," Krueger said.

"For that, I'd even be willing to meet Boris Johnson personally."

Johnson was elected to the leadership of the UK's conservative party — and thereby the premiership — on a promise to deliver Brexit "do or die" by October 31.

Previous Prime Minister Theresa May requested repeated extensions past Britain's original March 29 departure date, as she tried and failed to push a withdrawal agreement with the European Union through parliament.

The vow to leave with no deal if necessary secured the backing of Brexit hardliners, and the former journalist has packed his cabinet with true believers in the anti-Brussels project.

But while the government on Thursday announced an extra 2.1 billion pounds (2.3 billion euros, $2.5 billion) of funding for no-deal preparations, the car industry has said it is already slamming on the brakes on investment.

Companies invested just 90 million pounds in the sector in the first six months of 2019, the Society of Motor Manufacturers and Traders (SMMT) said in a statement, plunging 70 percent year-on-year.

Production in the first half also tumbled around 20 percent, to 1.7 million vehicles.

Many foreign manufacturers, like BMW, France's Peugeot — whose German brand Opel is sold under the Vauxhall name in the UK — or Japan's Nissan operate parts of their production chains in the Britain.

But an acrimonious exit with new customs checks and tariffs could disrupt the delicately-balanced interlinkages between factories that stretch across international borders.

Peugeot chief Carlos Tavares has told the Financial Times that production of Vauxhall/Opel Astra cars could be shifted to southern Europe.

BMW still plans to assemble its battery-electric Mini at its factory in Oxford from the autumn and "we don't want any interruptions in production," BMW's Krueger said.

Nevertheless, "we've taken certain precautions for Brexit and we're in a very good position regarding flexibility of our factories, not just in Oxford but around the world," finance director Nicolas Peter said. — AFP

August 01, 2019
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