The Brexit referendum thread: potential consequences for GB, EU and the Brits in CH

[Blueangel]

	Quote:	Loz1983
	Did you miss what happened in Greece in 2015? About 15 billion in lost GDP, totally incompetent negotiator, the guy is an utter twonk.

Miss it? I was there. I was in Syntagma Square on the day before, on the day, and the day after the Grexit referendum. Unfortunately clashed with my Greek mother-outlaw's birthday party in Athens. Very inconsiderate of them.

[fatmanfilms]

	Quote:	marton
	Vauxhall’s UK plant at Ellesmere Port, which makes the Astra hatchback, is heavily reliant on EU sales, as around 80 per cent of the 120,000 cars produced at the site are exported to other member states. GM already cut production at two mainland European plants that make models popular in Britain. Source

UK sales to Europe will be a doddle as the currency has dropped nearly 20%, perhaps they should invest more in the UK? European plants will loose out, even more so with a hard BREXIT.

[marton]

	Quote:	fatmanfilms
	UK sales to Europe will be a doddle as the currency has dropped nearly 20%, perhaps they should invest more in the UK? European plants will loose out, even more so with a hard BREXIT.

Oversimplistic!

There are many supply chains that wind into Europe and back, each time they cross a frontier there will be tariffs and quotas.

Plus the impact on "just in time" supply chains due to Customs delays will also add to costs.

UK car prices were already increased due to higher cost of parts for these reasons plus the weakness of the £ when paying for EU produced parts

[greenmount]

	Quote:	Loz1983
	Did you miss what happened in Greece in 2015? About 15 billion in lost GDP, totally incompetent negotiator, the guy is an utter twonk.

He might be a bad negotiator (though what kind of leverage did he have?) but defo not a twonk. That being said, it doesn't mean I'm his fan or something.

[rainer_d]

	Quote:	marton
	Oversimplistic! There are many supply chains that wind into Europe and back, each time they cross a frontier there will be tariffs and quotas. Plus the impact on "just in time" supply chains due to Customs delays will also add to costs. UK car prices were already increased due to higher cost of parts for these reasons plus the weakness of the £ when paying for EU produced parts

At best agricultural products (when exported to the EU) would get cheaper - if the EU would let them in without tariffs...

Though, most of the raw-materials probably don't originate in the EU but in Asia/Africa anyway. But spinning-up a cottage industry of suppliers isn't something that can be done very quickly (well, I don't really know - just an educated guess. But take a look at Russia for somebody who's trying just that).
But it all relies on the assumption that the EU will let all those goods manufactured in Britain and sold at dumping prices (due to currency-effects) into the EU.

[marton]

	Quote:	rainer_d
	At best agricultural products (when exported to the EU) would get cheaper - if the EU would let them in without tariffs... Though, most of the raw-materials probably don't originate in the EU but in Asia/Africa anyway. But spinning-up a cottage industry of suppliers isn't something that can be done very quickly (well, I don't really know - just an educated guess. But take a look at Russia for somebody who's trying just that). But it all relies on the assumption that the EU will let all those goods manufactured in Britain and sold at dumping prices (due to currency-effects) into the EU.

UK has been in the EU for a very long time and many supply chains have been built taking full advantage of the Customs free borders.

An example of the interconnections of the current supply chain is a fuel injector for diesel lorries manufactured by the US component maker Delphi.

This part uses steel from Europe which is machined in the UK before going to Germany for special heat treatment.

The injector is then assembled at Delphi’s UK plant in Stoneham, before being sold on to truckmakers based in Sweden, France or Germany.
Multiple tariffs and Customs delays would make this process very costly.

Possibly this special steel is not made in the UK and the final customers are anyway not in the UK so this part might be a candidate for conversion to full mainland Europe processing?

[Jim2007]

	Quote:	fatmanfilms
	UK sales to Europe will be a doddle as the currency has dropped nearly 20%, perhaps they should invest more in the UK? European plants will loose out, even more so with a hard BREXIT.

For that to actually work though you'd need to be producing something with 100% UK inputs and even then you'd still have labor pressure due to falling purchasing power.

Most manufacturing these days is really assembly - you import parts and add some more parts to make some other components, which then might well end up being exported and imported again as part of something else. So it is not just cost in tariffs but time and uncertainty due to customs clearance.

[Jim2007]

	Quote:	marton
	An example of the interconnections of the current supply chain is a fuel injector for diesel lorries manufactured by the US component maker Delphi.

The simplest and craziest I've come across was a cheese maker way down in the southern tip of Ireland with no export sales - so no problem??? Wrong they ship 100% of the output 100s of tones of cheese every year to mainland U.K. for consumer packing and the back again for delivery to the Supermarket chains on a JIT model. So that is pretty well shot to pieces now.

[Urs Max]

	Quote:	fatmanfilms
	UK sales to Europe will be a doddle as the currency has dropped nearly 20%, perhaps they should invest more in the UK? European plants will loose out, even more so with a hard BREXIT.

By that logic every country with a weak currency should be thriving and Switzerland, among others, be in a recession for decades. Reality is the exact opposite.

With a longer-term perspective, a currency isn't weak of its own accord, it's weak because the underlying economy is, it's the tail not the dog.

	Quote:	greenmount
	He might be a bad negotiator (though what kind of leverage did he have?) but defo not a twonk. That being said, it doesn't mean I'm his fan or something.

Looks like it's not all doom and gloom judging by this headline or is he just doing it to help His quote that the markets could be wrong is interesting and hardly a surprise when you see what happens on a regular basis:

http://www.telegraph.co.uk/business/...3-as-mark-car/

but for some reason you have to subscribe here, but it's available for free on facebook

Headline:

"Carney sends pound rebounding as he says markets 'mistaken' to be so gloomy on Article 50"

	Quote:	Zurichowl
	Looks like it's not all doom and gloom judging by this headline or is he just doing it to help His quote that the markets could be wrong is interesting and hardly a surprise when you see what happens on a regular basis: http://www.telegraph.co.uk/business/...3-as-mark-car/ but for some reason you have to subscribe here, but it's available for free on facebook Headline: "Carney sends pound rebounding as he says markets 'mistaken' to be so gloomy on Article 50"

You really think he has the remotest choice in this?

[Mikers]

	Quote:
	You really think he has the remotest choice in this?

Yes

[marton]

	Quote:	Urs Max
	By that logic every country with a weak currency should be thriving and Switzerland, among others, be in a recession for decades. Reality is the exact opposite. With a longer-term perspective, a currency isn't weak of its own accord, it's weak because the underlying economy is, it's the tail not the dog.

And to prove your point;
Swiss exports exceed level before franc’s shock rise
In the third quarter of 2016, Swiss exports reached CHF 52.5 billion, 8.1% higher than they were for the same period in 2015
The same quarter of 2014 exports reached CHF 51.7 billion, 1.5% lower than the third quarter of 2016.

Source

For the opposite view look at the economies of countries whose currencies have crashed; Venezuela, Argentina, Turkey

[marton]

	Quote:	Zurichowl
	Looks like it's not all doom and gloom judging by this headline or is he just doing it to help His quote that the markets could be wrong is interesting and hardly a surprise when you see what happens on a regular basis: http://www.telegraph.co.uk/business/...3-as-mark-car/ but for some reason you have to subscribe here, but it's available for free on facebook Headline: "Carney sends pound rebounding as he says markets 'mistaken' to be so gloomy on Article 50"

There are positive and negative forecasts all over the place.
As Carney himself said until May gives clarity about Brexit and the deal with the EU is further advanced then any forecasts have little real value.

Exactly, then why concentrate on all the UK bashing?

[marton]

	Quote:	Zurichowl
	Exactly, then why concentrate on all the UK bashing?

Who does that?

Keeping up their high standards the Guardian has published a hitherto secret recording of a Theresa May meeting before the referendum
"Theresa May privately warned that companies would leave the UK if the country voted for Brexit during a secret audience with investment bankers a month before the EU referendum."

Source

And for those who still wrongly believe there is some sort of ultra powerful EU entity forcing laws and rules on member states then take a look at the Canadian trade agreement farce!

For those with black humour
He [David Davis] says instead the best model [for Brexit] is the Canadian Ceta deal that the EU has just struck.
Source

Actually he may prove to be correct that Brexit will also be unable to conclude a deal with the EU

[amogles]

	Quote:	marton
	UK has been in the EU for a very long time and many supply chains have been built taking full advantage of the Customs free borders. An example of the interconnections of the current supply chain is a fuel injector for diesel lorries manufactured by the US component maker Delphi. This part uses steel from Europe which is machined in the UK before going to Germany for special heat treatment. The injector is then assembled at Delphi’s UK plant in Stoneham, before being sold on to truckmakers based in Sweden, France or Germany. Multiple tariffs and Customs delays would make this process very costly. Possibly this special steel is not made in the UK and the final customers are anyway not in the UK so this part might be a candidate for conversion to full mainland Europe processing?

This type of multi-site manufacturing is quite typical of susbidy tourism. Manfacturers have optimized the art of extracting the maximum of subsidy and tax breaks while creating the minimum of local benefits.

	Quote:	marton
	Keeping up their high standards the Guardian has published a hitherto secret recording of a Theresa May meeting before the referendum "Theresa May privately warned that companies would leave the UK if the country voted for Brexit during a secret audience with investment bankers a month before the EU referendum." Source

Theresa May supported Remain during the campaign. This isn't even news. Only the blubbing Graun could make this an exclusive story.

[marton]

	Quote:	amogles
	This type of multi-site manufacturing is quite typical of susbidy tourism. Manfacturers have optimized the art of extracting the maximum of subsidy and tax breaks while creating the minimum of local benefits.

So? No doubt they will continue to do this and there will be ever new offers from mainland Europe States to attract UK based companies.