Tags: Brexit | brexit | may | companies | hammond

Global Firms Fret Over Brexit Uncertainty, May Confidence Vote

missing piece from a european jigsaw puzzle revealing british flag and brexit question
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Wednesday, 16 January 2019 09:05 AM

Less than two hours after his government’s Brexit plan suffered a crushing defeat in Parliament, U.K. Chancellor of the Exchequer Philip Hammond jumped on the phone. On the other end of the line: executives and business lobbyists spooked by the prospect of Britain crashing out of the European Union without a deal in a few weeks.

During the hour-long conference call with the country’s top business groups and executives from companies including Amazon.com Inc. and Siemens AG, Hammond sought to soothe frayed corporate nerves, assuring that Parliament is working to avoid a chaotic departure and floating the the prospect of a delay of the end-of-March departure date.

Yet the government’s latest late-night attempt to give reassurances after a serious Brexit setback hasn’t stemmed a further outpouring of disappointment and concern from corporate leaders. Across industries, companies continued to slam ongoing uncertainty and are ramping up contingency planning, even as Prime Minister Theresa May pledges cross-party talks this week to break the impasse.

“Businesses must continue to be ready for no deal,” said Lucy Fergusson, a partner at law firm Linklaters LLP. “We are running out of time.”

Adam Marshall, director general of the British Chambers of Commerce and one of the attendees on the Hammond call, said after the vote that businesses he represents were frustrated, impatient and angry. He called it “a high-stakes political roller-coaster ride that shows no sign of stopping.”

From the initial shock of the actual Brexit vote in mid 2016, companies have slowly adapted, moving more operations to the continent or stockpiling supplies in the U.K. on concern that the free flow of goods and people will hit a road block after March.

Following is a list of reactions from select industry groups following May’s defeat on Tuesday:

Transport

Vauxhall, which is owned by Peugeot-maker PSA Group, said it was 'extremely disappointing' that the threat of a no-deal Brexit hadn’t been removed. Vauxhall’s French owners have been weighing whether to close one of its two factories in the U.K.

Kuehne + Nagel International AG, the world’s largest sea freight forwarder, said a disorderly Brexit would be the 'worst solution' and that it is working to secure alternative trade routes with Europe outside of the busy Kent corridor. It also said it’s started recruiting additional customs clerks.

Japanese automaker Honda Motor Co. said a hard Brexit would seriously impact its European operations, even though it is implementing countermeasures. New checks at the border could disrupt its logistics systems, while tariffs on goods moving between the EU and U.K. would hurt its competitiveness, it said.

Health

The lobby for Europe’s pharmaceutical industry said the ongoing impasse in Westminster is a real and immediate threat to patient safety and public health in the U.K. The drugs industry has long warned that leaving the EU without an agreement could cause medicine shortages as shipments pile up at the border.

Nathalie Moll, director general of the European Federation of Pharmaceutical Industries and Associations, said the U.K. and the EU should 'put politics aside' and 'put measures in place to prevent patients being harmed by the consequences of Brexit.'

Novo Nordisk A/S, the world’s biggest maker of insulin, has reserved space on airplanes and plans to boost stockpiles further to ensure diabetes patients in the U.K. don’t run out of the life-saving medicine. The Danish company said it started planning for different Brexit scenarios about three years ago.

“While we have stockpiled, the issue then from a supply point of view is how quickly can we replenish that stockpile, because we anticipate there could be some delays,” Pinder Sahota, Novo’s U.K. general manager, said in an interview. “This is a major logistical challenge for the industry.”

Retail

Helen Dickinson, chief executive of the British Retail Consortium, said 'the time for Parliamentary games is over' and warned that a no-deal Brexit would mean higher prices for consumers and less choice on the shelves.

The Scotch Whisky Association, a lobby group for the U.K.’s largest export in the food and drink sector, said a “no-deal Brexit would damage our industry by forcing cost and complexity into the production and export of Scotch whisky, and must be avoided.’’

Julianne Ponan, chief executive of superfood maker Creative Nature, said she’s stockpiling items like hemp seed from Germany and choosing to source goji berries from China instead of the EU to avoid any potential disruption to production.

“It’s just a mess at the moment,” Ponan said by phone, who voted for Brexit in the hope it would bring more export opportunities. “I didn’t think that we’d be 10 weeks away and not have anything on the table.”

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The government’s latest late-night attempt to give reassurances after a serious Brexit setback hasn’t stemmed a further outpouring of disappointment and concern from corporate leaders.
brexit, may, companies, hammond
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2019-05-16
Wednesday, 16 January 2019 09:05 AM
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