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No Deal? No Way!

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It was the early 1960s. The company I worked for designed and manufactured specialist components for aircraft. We were asked for initial designs for such components to meet the stringent requirements of a supersonic airliner – Concord – proposed as a joint project between British and French aircraft manufacturers.

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An Air France Concorde (the UK version of the plane’s name omitted the final ‘e’). Image from wiki media commons.

We were in competition with a French manufacturer of similar components. Whoever won the design competition, both companies would manufacture the components. Winning the design competition offered prestige, but it was manufacturing that held the promise of long term profits. So neither company tried too hard to win the design competition.

In the event, our designs were the closest to the specification so it was we who were asked to work up the designs into plans for manufacture. And, decades later, we all know that no-one made any money from Concord.

I tell this story because it is an early example of international co-operation in manufacturing. Britain was not even a member of the EU back then, although much effort was being put into applying, only to be vetoed by the then French president, Charles DeGaule.

These days most complex machines – not just aircraft, but motor vehicles and domestic appliances – are manufactured by international consortia using components sourced from around the world. Within the EU, these consortia take full advantage of the Single Market and Customs Union to import components tariff free from one part of the Union to another and sell the resulting machine in most member states.

In the automotive industry, for example, final assembly of one model might take place in the UK, and of another in France or Belgium, with components for both sourced from several countries. No wonder these companies are worried about the possibility of a ‘no deal’ Brexit. Their supply chains will be disrupted, their UK businesses rendered unviable. This applies to UK based component manufacturers supplying end users elsewhere in the EU just as much as to UK based manufacturers sourcing components from other parts of the EU.

It also applies to UK based food processors importing ingredients from within the EU, and UK farmers and horticulturalists supplying ingredients to EU processors. Such contracts generally take years to negotiate. This explains why the UK can’t “just walk away” as some of those who voted “leave” two years ago would wish. The reality is that, unless David Davis and his team can come up with something as close as possible to the existing Single Market and Customs Union, the future looks very bleak indeed for British businesses of all sizes.

Patrick Minford, one of the few economists who favour Brexit, admits this but is unconcerned, stating that the UK can do without manufacturing. The leadership of the Labour Party should be very worried about the livelihoods of their members and supporters. It is beyond belief that they are not fulfilling the proper role of an opposition and fighting tooth and nail to prevent #Brexit.

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5 Comments

  1. You raise a valid concern, Frank. Undoing the globalized market chain could result in unpredictable dire consequences to both the UK and EU markets. We face a similar situation here in the USA with our administration’s intent on re-negotiating NAFTA.

    Liked by 2 people

  2. Your article, Frank, illustrates the dangers of voting reflexively without considering the long-term consequences, a lesson we here in America have also been rather unpleasantly learning the past few months. Hopefully both the UK and US will learn from our recent foolish mistakes, though not, alas, before great damage has been done.

    Liked by 2 people

  3. franklparker says:

    And I see on tonight’s BBC news that Harley Davidson are now to manufacture bikes destined for Europe in Europe – an inevitable effect of Trump’s trade war!

    Liked by 2 people

  4. tidalscribe says:

    If only the dire effects had been explained, or what would be involved in unravelling in the run up to the vote. But I fear lots of people would still have wished to ‘make a statement’ . I loved Concord and watching her take off when we lived right by and worked at Heathrow. But if many had been made with numerous flights, the novelty of roaring, bone rattling take off and landings might have worn off!

    Liked by 1 person

  5. Clive says:

    A well-balanced piece, Frank. Those who warned abut the dangers to our trade and industries in the referendum campaign were accused of creating ‘Project Fear.’ But it seems that every day we hear of yet another company planning ahead for the negative impact on their business of a no deal Brexit. Add Trump’s economic illiteracy into the equation, with his punitive and unnecessary tariffs, and I can’t see how even the most ardent Brexiteer can still believe it will be beneficial to the UK economy.

    Liked by 1 person

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