EU Referendum


Brexit: Nissan bites back


30/09/2016




Despite the content-free speech from Liam Fox yesterday, reality is beginning to bite, and bite hard. This comes in the form of Renault-Nissan which says that it can't wait until the end of Brexit to know what is going to happen. If the company is to commit to further investment in its plant in Sunderland, it needs certain guarantees from the British government as to trading conditions.

Says Carlos Ghosn, CEO of Renault-Nissan, "I'm going to have to make a deal with the UK government," adding that he would be looking for compensation if his company's tax regime became less favourable or cross-border duties had to be paid once Britain left the European Union.

"If these kinds of principles are accepted we can go ahead because it will neutralise some of our concerns," says Ghosn. "We would like to stay.... We're happy, we have a good plant, which is productive but we cannot stay if the conditions do not justify that we stay".

This is the same Carlos Ghosn who, when asked in November 2013 how Nissan would react if the UK were to leave the EU, said: "If anything has to change, we [would] need to reconsider our strategy and our investments for the future".

Well, as good as his word, he's reconsidering strategy and future investments. And he will no doubt be telling the current Prime Minister that Nissan only agreed in 1982 to invest in the UK because another Prime Minister told the company that there was "no realistic prospect" of the UK leaving the (then) EEC.

But a month before Ghosn spoke in 2013, Toshiyuki Shiga - Nissan's chief operating officer - said that Britain's membership of the European Union was "very important" and that his company wanted to see the UK remain part of the Single Market. So now it seems that all those firms who were so keen on EU membership weren't after all hankering after the EU. It was continued participation in the Single Market that they actually wanted.

Now that's coming out into the open, though, it is going to be very hard for such firms to row back and say it was EU membership that they really wanted. And since its is demonstrably possible to remain in the Single Market and leave the EU, we should – in theory – have no difficulty keeping the likes of Nissan on board.

All we need is the Prime Minister to follow in her predecessor's shoes, but with a slight change in emphasis, saying that there is: "no realistic prospect" of the UK leaving the Single Market (in the immediate future).

For the time being, it is becoming more and more evident that Mrs May has little choice to adopt the EEA solution for Brexit – for at least as long as it takes to organise something better. And that, it would appear, would allay many of the fears that industry is currently articulating.