JLR Threatens to Abandon the U.K. after "Hard" Brexit

Jaguar Land Rover CEO Ralf Speth says a failure to arrange a “frictionless” trade deal when the U.K. exits the European Union next year could drive the carmaker out of England.

Speth tells the Financial Times that a “hard” Brexit would cost JLR £1.2 billion ($1.6 billion) per year in higher tariffs and force the company to relocate to remain financially viable.

Other companies that assemble cars in the U.K. have warned that future plans to stay in Britain will be strongly affected by the country’s ability to negotiate continued low tariffs in trade with the EU. But Speth’s assessment is the most blunt to date.

At risk in JLR’s case is £80 billion ($106 billion) in investments on new products and electrification, Speth says. He emphasizes that the carmaker’s “heart and soul” are in the U.K. But he warns that JLR would spend those funds elsewhere and abandon operations in England if necessary “to save the company.”

Jaguar Land Rover is the British auto industry’s biggest carmaker. The company current employs 40,000 people and exports some £18 billion ($24 billion) in products per year.