Ford preparing alternative production sites to prevent no-deal Brexit tariffs

Automaker Ford Motor is coming up with a back-up plan to prevent itself from paying higher tariffs and getting disrupted from its business in case if Britain leaves the European Union (EU) without a deal.

The firm told British prime minister Theresa May in a private conference call with other business leaders of its plans, British national daily newspaper The Times reported on Tuesday. Other businesses in the conference call also delivered the same warning as Ford to Mrs May, the report said.

Higher tariffs on firms, job losses at risk with a no-deal Brexit scenario

Last month, the automaker said it could face a bill of up to US$1 billion (£767 million) if a no-deal Brexit happens. The bill would comprise of World Trade Organization tariffs and frayed costs due to a weaker pound.

Ford operates two engine plants in Britain and employs 13,000 people there. It is the top-selling car brand in Britain and the country is its third-largest market.

Carmakers and other manufacturers have cautioned on the toll a no-deal Brexit could affect businesses. The problems on higher tariffs, disruption to supply chains and threats to jobs are real issues that will occur if Britain leaves the EU on a hard landing.

Britain is scheduled to leave the EU on March 29.

Foreign and local manufacturers jumping ship

Although some manufacturers have claimed that the decision to relocate their factories are unrelated to the Brexit turmoil, the timing of the shift places their move under scrutiny.

Last month, British home electronics maker Dyson said it will be moving its corporate head office to Singapore to cater to the geographical shift in their consumer portfolio.

The group said it will continue to grow its investments in its research and development labs in the United Kingdom (UK), as well as support the capabilities of its offices in Singapore, Malaysia, China, and the Philippines for this year.

Japanese electronics giant Sony also announced plans to shift its European head office from Britain to the Netherlands to avoid Brexit-related customs issues.

Sony’s move mirrors its rival Panasonic which moved its European headquarters from the UK to the Netherlands last year over similar concerns.