The goals behind Brexit–the successful referendum to remove Britain from the consortium of governments known as the European Union–were always a little intentionally vague, but the main idea was that the United Kingdom wasn’t going to let anyone else tell them what to do. This can be summed up in the Leave campaign’s slogan “Take back control.” It’s been clear for a while that almost exactly the opposite has happened, and perhaps nowhere is that clearer than in the car industry.
That the entire Brexit experiment was actually a political Grenfell Tower in the making–a terrible and avoidable self-immolation confounded by a confused government that would inevitably destroy the lives of the people with the biggest stake and least control–seemed obvious at the time to many, many people. Just not enough people.
I don’t want to dunk on the people who voted “leave” in the referendum because it’s not my country. It wasn’t my choice. If anything, America will benefit from the outflow of production and dollars from the UK. It sucks. But it’s also a good reminder that politics has consequences. It impacts the cars you love and the cars you get. It impacts the people who make the cars. It impacts everyone.
Car Companies Beg The EU To Not Make The UK Suffer The Consequences Of Their Own Actions
If you don’t want to read this article, this tweet does a pretty good job of summing up what’s happening now with the UK’s car industry. For the car industry, at least, Brexit has been an own-goal of epic proportions. Own-goal probably understates it. Rather than accidentally kicking the ball into their own net, it’s like they punched the goalie in the throat, headered the ball into the back of the goal, and then attempted to give one of the linesmen a noogie.
Being a part of the European Union allowed for easy trade between the various countries in Europe and the other regions aligned with the European Union via treaties. With a kind of misguided optimism that rivals Underpants Gnomes (see above video), Britain was going to come out of Brexit with the ability to negotiate even better and even stronger trade agreements.
Charitably, that hasn’t happened yet, and the United Kingdom relies heavily on the rest of Europe for trade. A Europe that, for good reason, saw Brexit as a kind of big middle finger, and negotiated a tough trade deal on the way out — one that contains all sorts of ticking time bombs.
One of those bombs is about to explode. The European auto industry is shifting rapidly towards electrification and rules set to go into effect next year will require 45% of the value of an EV sold in the European Union to come from either Britain or the EU. That’s fine for gasoline cars, but as David learned with his i3, the value of an EV is largely its battery and the Brits ain’t exactly rolling in lithium and battery factories.
Ford is begging the EU for an extension. Stellantis did the same, saying it would have to start closing plants and laying people off if the rules go into effect. Here’s a bit from from the BBC via Reuters that goes far to explain how bad this can get:
Andy Palmer, former Nissan chief operating officer, told BBC radio that urgent action was required.
“The cost of failure is very clear. It’s 800,000 jobs in the UK, which is basically those jobs associated with the car industry,” said Palmer, who is also chairman of European battery manufacturer InoBat.
“If you don’t have a battery capability in the UK, then those car manufacturers will move to mainland Europe.”
Utter madness.
The Germans To The Rescue
While you were sleeping, the Verband der Automobilindustrie (VDA), aka the German Association of the Automotive Industry, decided it, too, didn’t want to see Britain sink into the ocean.
The VDA, the German car industry lobby group, said “it is now urgent to adjust” the deal because tariffs would represent “a significant competitive disadvantage for the European car industry in relation to its Asian competitors in the so important UK market”. Tariffs would slow down the shift to electric cars, it argued.
The VDA’s members include some of the world’s most powerful carmakers such as BMW, Mercedes-Benz, Porsche and Volkswagen. The UK represents an important and profitable market for Germany’s carmakers – albeit a small part of their global sales.
There are probably a few reasons behind this that are not purely selfless on the part of the VDA. As mentioned, the UK is still a decent-sized market for German automakers and an even worse economic condition in the country isn’t good for business. Second, the rush to make cars electric hasn’t been easy for German automakers, either, and it behooves the VDA to get Brussels to keep pushing back these requirements (though they asked for an extension to 2026 instead of 2027).
And, finally, the Germans may be mad at the Brits, but there’s a war not that far away from Germany’s border and we all need friends.While the Russians can barely build Ladas, it’s much better to keep the British strong than it is to let the Chinese take over everything.
China’s Geely Continues To Take Over British Automakers
Geely has been slowly and consistently buying up European and, in particular, British automakers. In addition to Volvo, Geely owns the Lotus Group and part of Aston Martin. As of this week, Geely now owns a lot more of Aston.
There’s a full writeup in the Financial Times about the deal, but here’s the meat of it:
Geely has doubled its stake in Aston Martin to 17 per cent and will supply technology and components to the luxury-car maker under a new “long-term partnership”, growing the Chinese group’s influence over a company that it has long desired to own.
The Chinese carmaker spent £234mn increasing its holding, becoming the third-largest shareholder after the consortium of investors led by Aston Martin chair Lawrence Stroll, and Saudi Arabia’s Public Investment Fund, and placing it ahead of Mercedes-Benz.
Geely bought 42mn shares from Stroll’s consortium, and was issued with 28mn new shares at 335p each, a substantial premium over Wednesday’s closing share price of 231p. The deal raises £95mn for Aston Martin.
It’s worth pointing out that Geely also probably owns a little more of Aston Martin because Geely also owns a good chunk of Mercedes Benz. The company had successfully tried to take over all of Aston, but lost out to Stroll.
Again, if the idea of Brexit was to make Britain more British, selling one of your best brands to a mix of Canadian, Saudi, and Chinese companies is a curious way of going about it. To be fair, many of Britain’s car companies were already sold off before Brexit, but it’s getting worse not better since.
While there’s a burgeoning Cold War Part Two brewing with China, I don’t necessarily see it as an awful outcome that the Chinese are investing in Western Automakers. I still have the probably naive belief that automobiles, which are an intersection of commerce and art and sport, are a superior way of uniting people than pure consumption alone (those McDonalds in Russia didn’t seem to stop the missiles).
Chrysler Airflow: Dead
Stellantis attempted to get people to care about Chrysler with a vision it called the “Aiflow” the company showed at CES in 2020. The name came from a 1930s Chrysler and it was, uh, ok. It was big and kind of round and sort of looked like a squished Pacifica. But it was something!
According to MotorTrend, both the name and the design are dead.
The change comes at the direction of Chrysler Brand CEO Chris Feuell who came into the job with a new eye and rulebook she wants to play by. “Chris came at it with her perspective which we really enjoyed,” Gilles says. “She wanted a statement that had literally zero to do with anything that you have seen today, even the Airflow concept car. It is evolving in a new direction.”
“Airflow was a great exercise to signal again the type of vehicle Chrysler might want to do,” Gilles says. As a compelling crossover it was a great starting point. But under Feuell’s new direction, the team aimed to beat their own design.
Ralph Gilles rules so, yeah, pitter patter my friends. Make something as fun as the Dodge Charger Daytona SRT EV please.
The Big Question
Ok folks, is Britain just temporarily boned or is this is a full-on, generational boning?
In 1990, I wrote a paper in law school on the economic and legal implications of a strong EU for England. The economic benefit to EU membership is patently obvious. The legal implications included removing the House of Lords as the highest court in the land since it’s rulings were then subject to EU court rulings, for items in trade, and other items akin to the Commerce Clause in the US Constitution, which are broad and many. So I can see this was a reactionary response to short term problems with the EU (hence blaming it on geezers) but now I get to say, I told you so! Even though I didn’t tell anyone other than my professor when I handed in the paper which concluded this might happen (England was backdooring international treaties at the time already.) Well, so, at least one Autopian was not blind sided by this kerfuffle.
I voted remain not because I had any great love of the EU, which let’s not forget has quite a number of fundamental issues of its own, but because I could not see how any UK Government was going to come up with a successful plan to implement it. Pretty much every issue I could see has come to pass.
Also worth pointing out a major tenet of the Leave campaign was immigration something the US grapples with as well.
Tbere was a time when the sun never set on the English Empire. In fact England is the only European Country ever to be a 1st world country and were a decent 2nd world country. Thinking many incompetent poorly run countries could develop a quality equal arrangement is crazy. The Democrats keep promising to give everybody everything by taxing Musk, Bezos, Gates, Elkison, Buffet, and Zuckerberg. Cant happen but i bet England saw being used as a cash cow by stinkholes with more votes.
They’re still coming, Dave. Two of them. Every street corner.
If by “give everybody everything” you mean enact common sense policies like Healthcare and education reforms that literally every other advanced country has successfully done by having common sense tax rates on billionaires then you’d be correct
yeah, there’s some serious either trolling or delusional bullshit going on there.
Darn.
I was hoping, waiting, praying for the full return of British Leyland
Ah yes, that’s what Britain needs to pull themselves up by the bootstraps. Poorly made cars mashed together with hammers by workers that are either half drunk or on strike. Full disclosure, I own a British Leyland car and love it with all my heart and will never get rid of it.
I have two TR8s and a Rover 220 TomCat in my garage. I love them. British Leyland may have been awful, but it was best awful there ever was.
“it was the best awful there ever was” is outstanding.
The first car I ever bought was a TR8 and no car I’ve bought since has made me any happier.
You and me both!
It’s so wonderful not to hear about Tesla!
Another enshitification of Brexit is that I used to be able to order car parts for my VW direct from Germany pretty much overnight*. These days it takes the better part of a month, and there’s a bunch of customs stuff to deal with.
*I was always too cheap to pay for the overnight shipping, but it was an option
A scene from the British Fast and Furious knockoff, “The Unhurried and the Unraveled:”
SIR JESSINGTON: I daresay, this horseless carriage should right box their ears, provided we invest five-and-ten hundred shillings. Overnight components from the Krauts, if we must.
LORD DOMINICK TORONADO, ESQ: Indeed. My balance at Harrington’s can bear it.
Brexit was always about keeping out immigrants. Americans have been voting against their own economic interests for years because they’re afraid of brown people. Britain is now doing the same.
UK is an immigrant magnet because you don’t need any ID card or proof of residence. You can live that way for decades… While in hte rest of the EU you need some kind of ID or proof of residence.
For example in France you’re supposed to be able to justify your identity at any time through some kind of identification paper upon request by the police. ( right now the only two officially approved papers are the ID card and the Passport, the Driving License might be enough in some case if it’s a modern one ) So basically you have to carry an ID card with you as soon as you leave home. ( and the ID card/Passport has your address on it, if you move you need to get new one issued… the trick is to stage the expiration dates so that you have either the ID Card or the Passport with your current address. )
Any of my American friends here got a sister/daughter/wife/mother I can marry?
Well, we have a shit ton of problems here too. So maybe…. ask some Australians? Seems like they are never in the news
Oof trust me you don’t want to downgrade to the US. Our wages may be a bit higher but I pay $800 a month for health insurance. Plus I’m about to start paying $1,000 a month in student loans. America is not a panacea, at least not since Reagan
FYI…. you can marry our brother/son/husband/father now too, for at least a little while….
We may have need of your ass-kicking punk rocker energy. Particularly in Florida.
Would you move there if I promised you’d never have to go to Disney World?
regarding the UK, a quote from an 80’s classic…”mortimer, your brother is not well…fuck him!”
Well the British cant build a quality car and their electronics? Well Lucas. So now is it British or Chinese auto industry that needs saved? Either way an EV built in Britain will be Englands Dresden.
Britain has always been boned, even in its prime it was bad and it’s still bad.