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A third of UK automotive companies cutting jobs ahead of Brexit

Motor industry bosses have claimed that a third of UK automotive companies are already cutting jobs as Brexit nears

With little more than two weeks before Britain's scheduled departure from the EU, motor industry bosses have claimed that a third of UK automotive companies have already been cutting jobs.

This is up from one in eight when the Society of Manufacturers and Traders last surveyed the industry a year ago, as firms chop staff numbers with Brexit creeping closer.

The 'mere threat' of a no deal has already had a negative impact on 77 per cent of automotive firms, the SMMT adds.

Meanwhile, 12 per cent have already divested from their UK-based operations while 13 per cent are relocating operations overseas.

The UK's motor industry is one of the sectors hit hardest by Britain's impeding divorce from the EU.

Factory closures, namely the Honda plant in Swindon and the Ford engine facility in Bridgend along with substantial job losses at Jaguar Land Rover and Vauxhall have been headline news in the last 12 months.

As has reduced investment in UK vehicle production and reversal on commitments to build new models in the UK, such as Nissan's decision to pull the next X-Trail from its assembly line in Sunderland.

But the SMMT claims it has hit the sector on a much wider scale, with a third of all British automotive businesses already trimming staff, according to its recent survey of the industry.

It said the results of the poll were 'consistent and striking', with four in five firms fearing that a departure from the EU without a deal will have negative consequences for their future prospects - up from 74 per cent when the sector was previously polled 10 months ago - and profitability.

Nearly two thirds also said a no-deal Brexit will hamper their ability to win overseas businesses and will also struggle to invest in their UK operations. 

Almost three quarters of automotive firms have already put in place additional measures to prepare for the possibility of no deal.This includes around half of businesses spending extra money on stockpiling and warehousing to mitigate against the risk of border delays and production stoppage.

Meanwhile, a third have made adjustments to logistics and shipping routes, and over a quarter have been forced to invest hard-won profits in new customs infrastructure, despite a recognition that such systems cannot guarantee against border delays in the event of no deal.

SMMT chief executive, Mike Hawes said this latest survey revealed the 'bleak future that awaits this vital sector' in the event of no deal.

Damage has already been done: investment is haemorrhaging competitiveness being undermined, UK jobs cut and vast sums wasted on the impossibility of preparing for no deal, he continued. He suggested that the damage already caused to the sector was 'not irreversible' but a Brexit deal would need to be agreed to help firms bounce back.

A deal that, in the short term, enables a "business as usual" transition for as long as it takes to negotiate and implement the future trading relationship, Hawes added. In the longer term, that deal must replicate all of the benefits currently enjoyed which means an ambitious deal that delivers free and frictionless trade.

He said UK jobs, innovation, trading strength and economic growth all depend on the automotive sector so the industry urges all parties to get a good deal done before it is too late.