Brexit Effect Starts Hitting UK Car Industry as Job Cuts Arrive

The UK car industry has endured plenty of upheavals, but it may see the biggest yet, with layoffs starting to pour in as Brexit looms. The UK is scheduled to depart the European Union on March 29, 2019, Friday 11 pm, UK time.

Bracing itself for Brexit, Vauxhall Motors has cut 650 workers from its labor force. Meanwhile, Jaguar Land Rover has scheduled production cuts in the near future, and union bosses fear this is just the beginning.

"People shouldn't underestimate the dangers that Brexit is bringing," said John Cooper, a union representative who has worked in the car industry in Ellesmere Port, where Vauxhall has been building its Astra hatchbacks for the last 50 years. "Why would Nissan continue to invest in the northeast when it's got a plant in Spain where it can build the same car without a 10 percent tariff?"

Tariffs and other forms of red tape could spell disaster for the British auto industry since parts move from one European country to another multiple times during the production process. The Mini Cooper, for example, has crankshafts made in France shipped to BMW’s UK engine plant for assembly and then sent to Steyr, Austria for the final manufacture.

"It's hard to see how anybody could sanely vote for anything that would make the business more difficult," said Peter Southwood, 44, who's worked at Vauxhall for 21 years. "They see the cars coming down the line, they see how many are going abroad, they see where the parts come from."

With Brexit and the imposition of a 10-percent tariff, the cost of car assembly could increase by £2,372 (over P170,000). Inevitably, car manufacturing plants that export most of their Britain-made cars--such as Toyota and Honda--can close down as a result.

Foreign companies will leave "if there is no profitability of continuing operations in the UK," Japan's ambassador to the UK, Koji Tsuruoka said in February. "It's as simple as that. These are high stakes that I think all of us need to keep in mind."

But Britons who voted for Brexit aren’t necessarily changing their minds. One man said he supported Brexit because migrant workers who entered UK via the bloc’s open borders have impacted wages negatively.

"I'm happy to get out of Europe, just not with the way the government have gone about it," he said.