Carmaker joined by Toyota in warning over threat to jobs if UK leaves EU without deal
Paint finishing at the Mini production line at BMW’s Cowley plant in Oxfordshire.
Photograph: Chris Honeywell/BMW
BMW has said it might be forced to stop making the Mini at its Cowley plant near Oxford in the event of a no-deal Brexit, putting more than 4,500 jobs and more than 100 years of carmaking at the site at risk.
The German automotive firm joined Toyota and Vauxhall owner PSA in warning that an uncontrolled exit from the EU would cost British workers their jobs, as the Geneva Motor Show kicked off with the UK automotive sector under an increasingly dark cloud.
BMW board member Peter Schwarzenbauer, who is responsible for the Mini and Rolls-Royce brands, told Sky News that the future of the Mini brand in the UK was under threat in the absence of a Brexit deal.
He said: “This would be really a huge burden for the Mini brand. If this would come, which is the worst-case scenario, we’d need to consider what it means for us in the long run. For Mini this is really a danger.”
Asked if this might mean BMW moving out of the Cowley plant, on the outskirts of Oxford, he said: “We at least have to consider it because we cannot absorb 10% costs on top of it.”
Cars have been made at Cowley since the Bullnose Morris in 1913, after William Morris began replicating US production line techniques there. It now employs 4,500 people and made 234,501 Minis last year, 80% of which were exported.
More than 60% of its parts are sourced from Europe, almost all of which come from Calais through the ports of Dover and Folkestone.
Schwarzenbauer also said the company, which employs 8,000 people in the UK, was looking at whether it should move some engine production from Hams Hall in Warwickshire to a site in Austria.
“We have some flexibility on the engine side with Steyr in Austria. We would need to make some adjustments toward Steyr. We are preparing to be able to do it,” he said, adding that a final decision had not been made.
Speakingin Geneva at the event Johan van Zyl, chief executive of Toyota Motor Europe, said he could give no assurances that its British staff would keep their jobs until the outcome of Brexit is decided.
Toyota has two major manufacturing plants in the UK, with about 2,600 workers at its Burnaston plant in Derbyshire making the Corolla and 600 employees making engines at Deeside.
“If it’s a bad Brexit of course it will become very difficult,” van Zyl said, speaking to the Guardian. “It will have a negative impact on competitiveness.
“We are still hopeful that we will have a realistic outcome that will give us frictionless trade and that will give us no tariffs and barriers between Europe and the UK.”
Toyota invested £240m in its UK operations last year to start production of its new Corolla model at Burnaston, but the imposition of tariffs on exports from the UK to Europe would threaten the British operations.
The carmaker has previously warned that significant delays at the border in a no-deal Brexit would force it into “stop-start” production at Burnaston.
Like most of the manufacturers who rely on “just-in-time” delivery of parts, Toyota has stockpiled some materials, but can only cover three days of production without a continuous inflow of parts.
PSA, the owner of two Vauxhall plants in the UK, added to the ominous signs for the future of the British car industry.
Maxime Picat, PSA’s operational director for Europe, suggested that the imposition of tariffs would undermine the effort to make the UK a world leader in battery technology, as carmakers accelerate the move away from the internal combustion engine to electric vehicles.
“If the UK market is closed to the European one it’s a bit hard for me to understand how production of such batteries can benefit only for UK needs,” he said.
“Keeping a coordinated continental European automotive industry as it is today is the best chance for the UK.”
The imposition of tariffs on EU-UK trade is the top concern for PSA, and could lead to plant closures. Picat said: “Today I cannot say there will be no plant closure … We will try and find any solution to avoid it.”
While the short-term costs of delays at the border would be bearable for Toyota, van Zyl emphasised that tariffs would threaten future investment. Carmakers generally keep the same basic design for a model for about five to seven years, although decisions on the next round of investment can be made well in advance of that.
Honda announced last month that it plans to close its Swindon factory by 2022, a move which threatens at least 7,000 jobs at the plant and in its direct supply chain.
The company initially said Brexit was not a factor before appearing to change its stance, although it said global trends affecting the automotive sector were the main reason.
Also last month, Nissan reversed its 2016 decision to build its new X-Trail sports utility vehicle in its Sunderland plant, which would have created 700 jobs. It said Brexit was among the reasons for its decision.