Nissan statement suggests UK has no immediate plans for leaving EU customs union…

So, another attempt to block Brexit in Belfast fails. One of the problems the former Remain side has is that much as it has been scornful of a lack plan, it does not seem to have had much of a one itself.

The big news yesterday was the fact that Nissan far from pulling out appears to be confident that nothing much will change, at least in the short term for large industrial concerns (financial institutions perhaps, not so much).

Faisal Islam has a fascinating historic take on the Nissan deal (which is worth quoting at length):

The car industry in Europe was basically the prototype for the Single Market. Tariff free, a massive market of customers with supply chains of parts dispersed around Europe and integrated for practically instant “just-in-time” delivery.

The “Forging Joint” might be German, the “Tripod” from France, and the “Forging Tripod” from Spain, to quote a real example of what is then assembled at GKN Driveline’s factory in Redditch, before the driveline system is then supplied to a UK car factory, which then often exports the final car back to Europe.

Depending on manufacturer, between 20% to 50% of the value of the supply chain is imported from the EU. Less than half, about 40% of the total value of spend, is currently sourced in the UK. There are Government ambitions to increase this to 50%, and this might be helped by the weak value of sterling after the Brexit vote.

What this business model will not be helped by, and indeed, will not survive, is the need to check in every part and subpart imported from Europe for its origin.

Just-in-time delivery means a part delayed by two hours can shut down an entire automotive production line.

The idea that a customs officer at Felixstowe, or Rotterdam or Southampton or wherever will be checking the widgets shipped into Sunderland to make the new Qashqai, is as far from car industry expectations of competitiveness as can be imagined.

And the same goes for aviation too. So if Nissan believes the UK is going to stay a place to make cars into the 2020s – the UK is not leaving the Customs Union, at least not till then, and perhaps not at all.

If this is the case, and Islam suggests the motive for the EU to take its time over any divorce (some Leave campaigners estimate anything up to six years), then some of the large concerns raised about the re-imposition of a hard commercial land border in Ireland are a little, erm, premature.

 

Mick is founding editor of Slugger. He has written papers on the impacts of the Internet on politics and the wider media and is a regular guest and speaking events across Ireland, the UK and Europe. Twitter: @MickFealty