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Study: “Hard” Brexit Could Threaten 18,000 Auto Jobs in Germany
If the U.K. leaves the European Union without securing favorable trade deals, the resulting slump in car sales in England could jeopardize 18,000 auto factory jobs in Germany, say consultants Deloitte Touche Tohmatsu Ltd.
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If the U.K. leaves the European Union without securing favorable trade deals, the resulting slump in car sales in England could jeopardize 18,000 auto factory jobs in Germany, say consultants Deloitte Touche Tohmatsu Ltd.
Under World Trade Organization rules, a so-called hard Brexit would allow Europe to impose tariffs as great as 10% on cars and 4.5% on components traded with the U.K. Roughly 20% of Germany’s car production is exported to England.
Deloitte estimates that a hard Brexit will hike the price of cars in the U.K. as much as €5,600 ($6,200). If so, sales in the country could plunge 20% in 2019—the year the U.K. formally leaves the EU—and strip away €12.4 billion ($13.8 billion) in auto industry revenue and pressure German carmakers to eliminate jobs.
Prime Minister Theresa May favors an array of all-new pacts to replace current trade arrangements with the EU. But carmakers fret that without an interim plan, the British auto industry could be permanently damaged during the years-long negotiating process.
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