With just 10 weeks left until the UK is scheduled to leave the EU, the prospect of a no-deal exit remains firmly on the table. That’s bad news for the UK car industry, which is already planning for the worst.
Image: picture-alliance/dpa/A. Weigel
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In the punch-drunk days that followed Britain's vote to leave the EU in June 2016, David Davis was the man Theresa May turned to in the fog. Tasked with leading the newly-created Department for Exiting the European Union, his views on how straightforward the Brexit process would be had long since been established.
"And while they are at it they will be demanding that those British companies that they own will have uninterrupted access to Europe," he added.
Davis appeared to genuinely believe that the powerful German car industry would be fighting for UK interests in the negotiations that lay ahead between the EU and the UK.
In the almost three years that have passed, Davis' views don't appear to have changed that much. Hours before the UK Withdrawal Bill was crushingly defeated in the UK parliament on Tuesday, he tweeted that "German industry is very afraid of a World Trade Organization exit" and appeared to identify the threat of a WTO exit as a trump card for the UK in negotiations, as opposed to the existential threat to the British economy that most economic analysis identifies it as.
The idea that the future UK-EU trade relationship would be thrashed out over a bratwurst and beer in Berlin is consigned to history, much like Davis' career as the Brexit Secretary.
And therefore, the UK car industry — upon which more than 1 million jobs depend within the UK alone — has to grapple increasingly with the prospect of a no-deal Brexit, and all the drastic measures that would entail.
The BMW Group is one of several international carmakers for which the UK is a location of major significance. Aside from the fact that the UK market is the fourth largest for BMW, the German carmaker also has a major manufacturing presence throughout Britain, for example the Mini plants in Oxford and Swindon, the Rolls-Royce plant in Goodwood and the company's Hams Hall engine factory in the Midlands.
The plants at Oxford and Swindon will cut off production until April 28, Rolls-Royce will cease operations for the first two weeks of April while the BMW engine facility at Hams Hall will be closed for most of the month.
"As a responsible business, we are looking at our options and taking steps to make sure we're prepared for a worst case scenario — a no-deal Brexit," he said.
"We have therefore scheduled next year's maintenance period to start at the point the UK exits the EU, to minimise the risk to our business of unintended production stoppages which could be caused by possible short-term disruption to cross-border movement of parts through the channel ports."
Biggs emphasized that there is nothing unusual about closing manufacturing sites for planned annual maintenance periods, but he said the timing had been changed in 2019 specifically with Brexit in mind.
A big deal in Japan as well
The BMW Group is just one of several large international carmakers with a major stake riding on the outcome of Brexit. Nissan and Toyota are major employers in the UK, but neither was willing to comment in detail to DW on their plans for a no-deal Brexit.
However, Toyota has already said it will close its Derbyshire plant for an unknown period of time if Britain leaves without a deal. "My view is that if Britain crashes out of the EU at the end of March we will see production stops in our factory," plant director Marvin Cooke told the BBC last year.
Nissan's plant in Sunderland (pictured) is one of several Japanese car manufacturing facilities in the UKImage: Getty Images/AFP/O. Scarff
Last week. Honda UK announced that it would close its UK plant for six days after Brexit, "to best mitigate the risk of disruption to production operations at the Swindon factory."
While the carmakers have been somewhat coy on their longer-term plans in the event of a no-deal Brexit, the comments made by Japanese Prime Minister Shinzo Abe during a visit to London last week provided a less than subtle illustration of how dimly the Japanese view the prospect of the UK leaving the EU without a deal — a trade bloc which accounts for close to 15 percent of Japanese exports, with which it has just struck a major trade agreement.
"We truly hope that a no-deal Brexit will be avoided, and in fact that is the whole wish of the whole world," he said. "Japan is in total support of the draft withdrawal agreement worked out between the EU and Prime Minister May."
The absolution that may never come
Guessing at the final outcome of Brexit at this stage is pointless given the current political climate in London. Therefore, carmakers are unlikely to reveal much more than what they have already, at least until the picture becomes clearer.
However, there is still a belief within Brexiteer circles, such as that long espoused by David Davis, that the German car industry will ultimately push for concessions to be made to the UK, regardless of the consequences for other EU interests.
Just before the Withdrawal Deal vote in London on Tuesday night, Nigel Farage, arguably the most prominent Brexiteer of all, reaffirmed his belief that the German car industry will demand the EU give in to British demands, to help stave off a no-deal Brexit.
However, nothing in the statement from the VDA, the powerful German car lobby, reacting to last night's parliamentary vote indicated a change in its policy. Instead, it heaped the blame on London.
"With today's decision the majority of parliament has done its country a disservice," it said. "Now an uncontrolled Brexit is more likely. The consequences of a 'no deal' would be fatal."
While Brexit supporters continue to wait for absolutions that may never come, those in the car industry, such as Graham Biggs of BMW, are left to reckon with the growing possibility of a hard Brexit.
"A no-deal Brexit would be the worst-case outcome for business, as it would cause the greatest disruption to our globally networked manufacturing and sales operations," he said.
"What we have said all along is that we need a deal which delivers frictionless trade this would clearly not be the case if it comes to a no-deal Brexit."
Brexit timeline: Charting Britain's turbulent exodus from Europe
Britain shocked the world when it voted to leave the European Union on June 24, 2016. DW traces the major events that have defined Brexit so far.
Image: picture-alliance/empics/Y. Mok
June 2016: 'The will of the British people'
After a shrill referendum campaign, nearly 52% of British voters opted to leave the EU on June 23. Polls had shown a close race before the vote with a slight lead for those favoring remaining in the EU. Conservative British Prime Minister David Cameron, who had campaigned for Britain to stay, acknowledged the "will of the British people" and resigned the following morning.
Image: picture-alliance/dpa/A. Rain
July 2016: 'Brexit means Brexit'
Former Home Secretary Theresa May replaced David Cameron as prime minister on July 11 and promised the country that "Brexit means Brexit." May had quietly supported the Remain campaign before the referendum. She did not initially say when her government would trigger Article 50 of the EU treaty to start the two-year talks leading to Britain's formal exit.
Image: Reuters/D. Lipinski
March 2017: 'We already miss you'
May eventually signed a diplomatic letter over six months later on March 29, 2017 to trigger Article 50. Hours later, Britain's ambassador to the EU, Tim Barrow, handed the note to European Council President Donald Tusk. Britain's exit was officially set for March 29, 2019. Tusk ended his brief statement on the decision with: "We already miss you. Thank you and goodbye."
Image: picture alliance / Photoshot
June 2017: And they're off!
British Brexit Secretary David Davis and the EU's chief negotiator, Michel Barnier, kicked off talks in Brussels on June 19. The first round ended with Britain reluctantly agreeing to follow the EU's timeline for the rest of the negotiations. The timeline split talks into two phases. The first would settle the terms of Britain's exit, and the second the terms of the EU-UK relationship post-Brexit.
Image: picture alliance/ZUMAPRESS.com/W. Daboski
July-October 2017: Money, rights and Ireland
The second round of talks in mid-July began with an unflattering photo of a seemingly unprepared British team. It and subsequent rounds ended with little progress on three phase one issues: How much Britain still needed to pay into the EU budget after it leaves, the post-Brexit rights of EU and British citizens and whether Britain could keep an open border between Ireland and Northern Ireland.
Image: Getty Images/T.Charlier
December 2017: Go-ahead for phase 2
Leaders of the remaining 27 EU members formally agreed that "sufficient progress" had been made to move on to phase two issues: the post-Brexit transition period and the future UK-EU trading relationship. While Prime Minister Theresa May expressed her delight at the decision, European Council President Tusk ominously warned that the second stage of talks would be "dramatically difficult."
Image: picture-alliance/AP Photo/dpa/O. Matthys
July 2018: Johnson, Davis resign
British ministers appeared to back a Brexit plan at May's Chequers residence on July 6. The proposal would have kept Britain in a "combined customs territory" with the EU and signed up to a "common rulebook" on all goods. That went too far for British Foreign Minister Boris Johnson and Brexit Secretary David Davis, who resigned a few days later. May replaced them with Jeremy Hunt and Dominic Raab.
Image: picture-alliance/empics/G. Fuller
September 2018: No cherries for Britain
May's Chequers proposal did not go down well with EU leaders, who told her at a summit in Salzburg in late September that it was unacceptable. EU Council President Tusk trolled May on Instagram, captioning a picture of himself and May looking at cakes with the line: "A piece of cake perhaps? Sorry, no cherries." The gag echoed previous EU accusations of British cherry-picking.
Image: Reuters/P. Nicholls
November 2018: Breakthrough in Brussels
EU leaders endorsed a 585-page draft divorce deal and political declaration on post-Brexit ties in late November. The draft had been widely condemned by pro- and anti-Brexit lawmakers in the British Parliament only weeks earlier. Brexit Secretary Dominic Raab resigned along with several other ministers, and dozens of Conservative Party members tried to trigger a no-confidence vote in May.
Image: Getty Images/AFP/E. Dunand
December 2018: May survives rebellion
In the face of unrelenting opposition, May postponed a parliamentary vote on the deal on December 10. The next day, she met with German Chancellor Angela Merkel to seek reassurances that would, she hoped, be enough to convince skeptical lawmakers to back the deal. But while she was away, hard-line Conservative lawmakers triggered a no-confidence vote. May won the vote a day later.
Image: Getty Images/S. Gallup
January 2019: Agreement voted down
The UK Parliament voted 432 to 202 against May's Brexit deal on January 16. In response to the result, European Council President Donald Tusk suggested the only solution was for the UK to stay in the EU. Meanwhile, Britain's Labour Party called for a no-confidence vote in the prime minister, her second leadership challenge in as many months.
Image: Reuters
March 2019: Second defeat for May's deal
May tried to get legal changes to the deal's so-called Irish backstop in the weeks that followed. She eventually got assurances that the UK could suspend the backstop under certain circumstances. But on March 12, Parliament voted against the revised Brexit deal by 391 to 242. EU leaders warned the vote increased the likelihood of a no-deal Brexit. Two days later, MPs voted to delay Brexit.
Image: picture alliance/AP Photo/T. Ireland
March 2019: Extension after second defeat
Following the second defeat of May's divorce deal, the European Council met in Brussels on March 21 to decide what to do next. EU leaders gave May two options: delay Brexit until May 22 if MPs vote for the withdrawal deal or delay it until April 12 if they vote against the deal. If the deal were to fail again in Parliament, May could ask for a long extension.
Image: picture-alliance/AP Photo/F. Augstein
March 2019: Brexit deal rejected a third time
On March 29, the day that the UK was supposed to leave the EU, British lawmakers voted for a third time against May's deal — rejecting it this time with a vote of 344 to 286. Following the latest defeat, May approached the main opposition Labour leader Jeremy Corbyn in an attempt to find a compromise, angering hardline Brexiteers in her own Conservative party.
Image: picture-alliance/AP Photo/House of Commons/M. Duffy
April 2019: Brexit delayed until Halloween
With the April 12 deadline looming after the third defeat of May's deal, EU leaders met again in Brussels to discuss a second delay. The only question was how long should it be? In the end, the UK and EU agreed to a "flexible" extension until October 31 — which can end sooner if the Brexit deal is approved. The UK had to take part in EU elections in May because their exit wasn't secured in time.
Image: Reuters/E. Plevier
May 2019: Prime Minister Theresa May resigns
Weeks of talks between Prime Minister Theresa May and the Labour party to reach a deal proved unsuccessful and further eroded her political capital. She triggered an angry backlash from her party after she tried to put the option of a second referendum on the table. The series of failures led May to announce her resignation, effective June 7, in an emotional address.
Image: Reuters/H. McKay
June 2019: Search for a new prime minister
After Theresa May announced on June 7 that she would leave office, other members of her Conservative party began clamoring for the top job. Within a month, the leadership battle came down to Jeremy Hunt (left), an EU proponent who fears a no-deal scenario, and Boris Johnson (right), one of the main proponents of Brexit.
July 2019: Prime Minister Boris Johnson
At the end of July 2019, Johnson was officially named Theresa May's successor as British prime minister. "We are going to energize the country, we are going to get Brexit done by October 31," he said after he was elected leader of the Conservative Party.
Image: Imago Images/Zuma/G. C. Wright
September 2019: Johnson's election threat
Conservative rebels and opposition MPs backed efforts to delay an October 31 Brexit deadline in fear of a no-deal departure. In response, Johnson called for a general election, saying his government cannot rule without a mandate after he stripped 21 rebel MPs of their Conservative status. The Labour Party said it would not back elections until legislation to block a no-deal Brexit was in place.
In late September, Britain's highest court ruled that Johnson's decision to suspend Parliament ahead of the UK's planned exit was unlawful. "This was not a normal prorogation in the run-up to a Queen's Speech," said the Supreme Court. Political rivals immediately called on Johnson to leave his post. Johnson said he would abide by the court ruling, though said he "strongly" disagreed.
Image: Reuters/H. Nicholls
October 2019: A new deal
British Prime Minister Boris Johnson managed to secure a deal with European negotiators that would allow the UK to leave the EU in an orderly manner. The deal received unanimous backing from the leaders of 27 other member states. But an attempt to get the UK Parliament to sign off on the deal failed. Instead, Parliament pushed for the Brexit deadline to be extended until the end of January 2020.
Image: picture-alliance/AP Photo/F. Augstein
December 2019: Lawmakers vote for Johnson's Withdrawal Bill
On December 22, UK lawmakers vote for Prime Minister Johnson's European Union withdrawal bill, which will see a leave date of January 31 2020 enshrined in law. Getting a majority to vote to pass the bill in the lower house has proven a major sticking point for the PM, but following a general election Johnson's Conservative party won control of the house and the bill passed with a 124 majority.
Image: picture-alliance/empics/House of Commons
December 2020: EU, UK 'finally' reach trade deal
After months of disagreements over fishing rights and future business rules, the EU and UK clinched a post-Brexit trade deal on Christmas Eve. Prime Minister Boris Johnson hailed the deal, saying the UK has "taken back control of our laws and our destiny." The deal will allow the UK and the EU to trade without tariffs, but also impose limitations on free movement and financial services.
