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The Auto Industry, Clarkson, And May Talk About Brexit. WTF is Brexit?!

If you caught the latest episode of Top Gear, the Stig thinks Brexit is some sort of laxative and that for tax purposes he’s classified as a Biscuit. Being an American and proud of it, I was quite fond of biscuits but clearly ignorant of Brexit. So I brushed away the guns piled on top of my keyboard and did some Googling. It turns out on June 23rd, 2016 there will be a major vote for our British compadres to decide “Should the United Kingdom remain a member of the European Union or leave the European Union?” Not knowing the implication of this, I turned to British archetype, Jeremy Clarkson, and explainer of mundane things, James May, for answers. Lucky for me, they’ve conveniently talked about it on Youtube.

Remaining in the European union seems to be one out of the three things they can agree on. The other two being sandwich spread is delicious, and that the old Ford Mondeo is a brilliant car. Their more selfish reason for remaining in Europe is that they claim it will be easier to film their new Amazon Prime show, The Grand Tour, if the UK remains part of the EU. Leaving the EU would require them to fill out a carnet, essentially a Merchandise Passport or international customs documents that simplify customs procedures for the temporary importation of various types of goods. Clarkson and May claim the paper trail would take a 100 years to finish and span the 21 miles between the UK and France.

However, the issue is much deeper than carnets, as the auto industry has a lot to say regarding the effect of the British leaving the EU. Companies like Ford, Toyota, Honda and BMW have significant investments in the UK, and would be directly and negatively affected. According to Toyota, which employs 3,400 at the Burnaston and Deeside manufacturing plants, “We are concerned that leaving would create additional challenges. As a result we believe continued British membership of the EU is best for our operations and their long-term competitiveness.” And according to BMW who both build and export cars in the UK stated “We firmly believe Britain would be better off if it remained an active and influential member of the EU.”

A Telegraph columnist, Erin Baker, stated the British automotive manufacturing industry was capable of producing 1.59 million cars just last year:

The industry provided jobs for 800,000 people and contributed £15 billion to the economy. We are HQ for seven mainstream manufacturers, eight premium manufacturers, seven Formula One teams, six design studios, 13 R&D centres and over 100 specialist brands, all here because the British workforce are highly skilled and have adopted flexible working practices unencumbered by dogmatic unions.

Added to which, we are part of the European market, with all the trading benefits that allows: unrestricted access to the world’s largest single market and innovation funding, negotiating strength to secure international trade deals and share technical regulations, and free movement of labour.

What happens to the 11.8 per cent of the UK’s trade in goods that the auto industry supplies if we leave the EU? We could emulate Norway and join the European Free Trade Association, but that apparently means obeying 93 per cent of EU regulations anyway.

… exiting the EU would be, well, a catastrophically bad idea.

In contrast, columnist Neil Winton, believes the auto industry are only looking out for themselves:

It’s also worth remembering that the car industry has form. In 2002 it was saying that if Britain didn’t join the euro it would move its factories to the continent. This was another example of an industry uniting for a cause that would be very convenient for it – one currency across a huge market – but with no concern for the economic turmoil that might follow.

He cites a report from Civitas that suggest the benefits of the EU single market are but an illusion:

According to the report’s author Michael Burrage, the noisy opposition to Brexit from car manufacturers is coming despite the fact they haven’t taken the trouble to do any research. “None of them has produced a serious risk/benefit analysis at all,” he said.

“These findings, along with evidence that single market members have suffered from high unemployment compared with independent OECD (Organization for Economic Cooperation and Development) countries, that their GDP and productivity have grown more slowly, and that the exports of 15 non-member countries to the rest of the EU have grown more rapidly than those of the UK, demonstrates that the image of the single market as the ‘crown jewel’ of the EU which has delivered ‘substantial economic benefits’ to the UK is a myth,” Burrage said in the report.

So, claims of impending gloom don’t add up.

With all that said the pollsters have so far determined that the decision for or against Brexit is split directly down the middle. Britain’s Prime Minister, David Cameron, has stated leaving Europe would threaten the UK’s economic and national security, a sentiment supported by leaders of almost all British political parties, business and international leaders. While proponents of the Brexit argues EU membership is costly and imposes burdensome regulations on business while also limiting efforts to curb immigration, as every EU citizen has the right to live and work in any EU country.

If you’ve made it this far, what are your thoughts on the Brexit?

(Source: YoutubeThe Telegraph & Wall Street Journal)

About Hansen

The engineer amongst the crew, Hansen once built a mini baja car with his bare hands. Hansen had the opportunity to join Honda’s R&D team in Ohio but chose the life of the east coast and the defense industry instead. A die hard auto enthusiast he religiously follows the auto industry and loves long walks in the auto shows.

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