The process of the Brexit is already triggered by Article 50, and adverse effects on the employment have started showing up. The companies in the UK are already considering leaving the United Kingdom. This exit of companies from the UK will have severe Brexit job impact.
EU Leaders and Brexit Job Impact
The European Leaders are already becoming skeptical about the businesses in the United Kingdom. Here is what the German Chancellor had to say about the whole Brexit situation.
“The negotiations must first clarify how we will disentangle our interlinked relationship. And only when this question is dealt with, can we, hopefully soon after, begin talking about our future relationship.”
The situation has become even clearer after the EU mentioned a phased out approach in its recently announced Brexit strategy. The European Union has already clarified that progress will only be possible after satisfactory withdrawal of the UK from the EU.
There is a three years’ uncertainty period during which firms in Britain would be uncertain about kind of single market access they will avail. Business owners hate to work in uncertain times as they want to protect their revenues over the long term.
Here is what the CEO of Citigroup European James Cowles had to say about this whole situation.
“A hard Brexit would require certain changes, including relocating certain client-facing roles to the EU from the U.K., and the possible creation of a new broker-dealer entity within the EU.”
Other companies expressed similar views. JP Morgan said that it was considering moving some of its members either to Dublin and Frankfurt. HSBC and UBS have also warned of moving at least 1000 of their employees (each) for better serving the EU market.
Similarly, Lloyd’s of London is also moving a subsidiary in Brussels to serve its customers better. AIG will also reportedly set up an office in Luxembourg.
Brexit Job Impact on Automakers
Car manufacturers are also considering doing the same.
BMW is considering moving its new electric cars making from its central facility in the UK to mainland Europe to its Mini car factory.
Here is what the BMW CEO had to say about the Brexit situation.
“Much will depend on how Brexit is ultimately negotiated. We are preparing for different scenarios.”
Cars manufactured in the UK get 60% of their spare parts from outside Britain, mostly the EU. A staggering 56% of the cars produced in the UK are sold back to the customers in EU. However, any new tariffs introduced would adversely hurt companies’ profits.
In this kind of situation, Brexit job impact will be huge for the automakers in the UK.
Brexit Job Impact on Aviation Industry
EU and the UK have an open sky agreement for the flights going into and out of the UK. EU needs to reach a deal with the UK on flights by the mid-2018 so they can accordingly plan their flight schedules for the year 2019.
Ryanair, one of the many airlines operating in the UK, has already shifted its focus to other EU markets. Here is what the top marketing officer of Ryanair had to say about the whole Brexit job impact situation in the aviation industry.
“Britain’s airlines, airports and holidaymakers need a real and early solution for aviation, or risk Britain being cut off from Europe in March 2019.”
He also warned that customers could see deep cuts to Ryanair’s flights from and within the UK.
EasyJet is already thinking ahead about the future saying that it would apply for EU license to secure its flying rights within the European Union. The company is also changing its ownership structure to comply with the new rules related to the carriers offering flights from one EU country to another.