WEATHER AUTHORITY : Flood Advisory View Alerts

Brexit is holding back innovation at European carmakers

Brexit is holding back innovation at Europe's carmakers by diverting attention from the big technological ch...

Posted: Nov 9, 2018 4:27 PM
Updated: Nov 9, 2018 4:27 PM

Brexit is holding back innovation at Europe's carmakers by diverting attention from the big technological challenges facing the industry.

Senior tech executives at BMW and Volkswagen say the United Kingdom's departure from the European Union could cause the region to fall behind Asia and America because it is disrupting operations, threatening collaboration in research, and draining resources.

Brexit

Business, economy and trade

Company activities and management

Continents and regions

Europe

European Union

Government organizations - Intl

Northern Europe

Product development

Product innovation

Product management

United Kingdom

Automakers and manufacturing

Automotive industry

Business and industry sectors

Companies

Volkswagen AG

BMW

"The Brexit debate is capturing the entire Europe, which is not going to accelerate technological growth," Martin Hofmann, Volkswagen's (VLKAF) chief information officer, told CNN Business at the Web Summit in Lisbon, Portugal. "It's distracting us."

Europe's car industry pours €54 billion ($61.3 billion) into innovation every year, according to the European Automobile Manufacturers' Association. That makes it the leading investor in research and development in Europe.

But that spending is under threat. The Society of Motor Manufacturers and Traders said investment into new models and facilities in the United Kingdom slumped 47% in the first half of the year.

The industry is already playing catchup in the race to develop electric vehicles and self-driving cars.

"From a technological point of view, the future is written right now in China and United States," Hofmann said.

The United Kingdom and European Union have not yet been able to strike an agreement on the terms of their divorce and future trading relationship. With time running out, businesses are increasingly worried Britain could crash out of the bloc without a deal.

The UK industry group estimates that new EU-UK tariffs on imports would cost the European car industry at least £5 billion. And a chaotic Brexit would cause manufacturing headaches for the carmakers because customs checks could cause delays in deliveries, playing havoc with complex just-in-time supply chains.

BMW's (BMWYY) senior vice president for electronics, Christoph Grote, said his company views Brexit as "a very negative thing."

It is shutting its Mini factory in England for one month of maintenance immediately after Brexit because it can't be sure of getting the parts it needs once the divorce has happened in March 2019.

Another risk to the industry comes from damage to academic research projects that support innovation. The European Union is funding a number of transportation and vehicle research projects run jointly by universities and private companies across the bloc.

This kind of partnership could become more difficult after Brexit, Grote warned.

"Any barrier that's being created does not lead to more cooperation," he told CNN Business.

British universities are already feeling the chill. Data from the UK Department for Business, Energy & Industrial Strategy shows the proportion of EU research funding going to British universities has dropped since the Brexit vote in 2016.

BMW and Volkswagen are just two of many companies in the industry that have warned about the costly consequences of Brexit.

Automakers including Nissan (NSANF) and Honda (HMC) have big factories in the United Kingdom. Ford (F) also makes engines at two plants. Some have warned they would have to quit the United Kingdom if trade barriers after Brexit wipe out their profit margins.

German engineering group Schaeffler (SCFLF) said Tuesday it was planning to close two plants in the United Kingdom. The biggest carmaker in the country, Jaguar Land Rover, has cited uncertainty over Brexit as one reason for putting 1,000 workers on a three-day work week until Christmas.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 295295

Reported Deaths: 6724
CountyCasesDeaths
DeSoto19672230
Hinds18799386
Harrison16710278
Rankin12685264
Jackson12592226
Lee9687160
Madison9457199
Jones7962146
Forrest7208136
Lauderdale6833226
Lowndes6022137
Lamar588080
Lafayette5733113
Washington5218130
Bolivar4609123
Oktibbeha441393
Panola430394
Pearl River4167130
Warren4129114
Pontotoc408869
Marshall403192
Monroe3989126
Union395374
Neshoba3807168
Lincoln3541102
Hancock347374
Leflore3375118
Sunflower318386
Tate302474
Pike300195
Scott293870
Alcorn291861
Itawamba289975
Yazoo289262
Tippah278765
Copiah277857
Coahoma277568
Simpson274878
Prentiss269758
Wayne253841
Marion252678
Leake252471
Covington248879
Grenada247377
Adams234377
George231745
Newton229652
Winston221675
Jasper213445
Tishomingo212365
Attala206569
Chickasaw201151
Holmes182270
Clay179150
Stone172429
Tallahatchie170539
Clarke169371
Calhoun157828
Smith152731
Yalobusha144836
Greene127633
Walthall124140
Noxubee122829
Montgomery122438
Perry121634
Lawrence120321
Carroll118225
Amite111533
Webster110630
Jefferson Davis101731
Tunica99023
Claiborne98429
Benton93324
Humphreys92827
Kemper90223
Quitman77114
Franklin76119
Choctaw69516
Jefferson62527
Wilkinson62426
Sharkey48817
Issaquena1676
Unassigned00

Alabama Coronavirus Cases

Cases: 493769

Reported Deaths: 9931
CountyCasesDeaths
Jefferson710731374
Mobile36139727
Madison32425455
Tuscaloosa24184410
Montgomery22586500
Shelby21968215
Baldwin19758283
Lee14967153
Morgan13667251
Calhoun13300286
Etowah13184319
Marshall11262209
Houston10104261
Elmore9385185
Limestone9363134
Cullman8897181
St. Clair8827223
Lauderdale8607211
DeKalb8459175
Talladega7523163
Walker6524255
Jackson6495102
Autauga627091
Blount6102127
Colbert6004118
Coffee5249102
Dale4642107
Russell404930
Franklin399177
Covington3960106
Chilton3876100
Escambia377672
Tallapoosa3588142
Clarke343650
Chambers3413110
Dallas3403141
Pike293472
Lawrence283484
Marion281995
Winston246867
Bibb245060
Geneva239970
Marengo236455
Pickens224654
Barbour211651
Hale210568
Fayette200756
Butler196866
Henry182441
Cherokee177038
Monroe166139
Randolph163740
Washington156535
Crenshaw144854
Clay144454
Macon142043
Cleburne137839
Lamar132833
Lowndes131151
Wilcox121825
Bullock116936
Conecuh106724
Perry105627
Sumter98531
Coosa88923
Greene88232
Choctaw55123
Out of AL00
Unassigned00
Tupelo
Partly Cloudy
43° wxIcon
Hi: 50° Lo: 41°
Feels Like: 43°
Columbus
Partly Cloudy
40° wxIcon
Hi: 50° Lo: 40°
Feels Like: 37°
Oxford
Clear
36° wxIcon
Hi: 48° Lo: 36°
Feels Like: 36°
Starkville
Partly Cloudy
36° wxIcon
Hi: 47° Lo: 37°
Feels Like: 36°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather