Carmaker PSA to ditch UK production if Brexit hits profits

French carmaker PSA, owner of Vauxhall Motors, will cut its UK production in favour of a new plant on the continent if Brexit adversely impacts profits, according to its CEO.

Chief Executive Carlos Tavares told the Financial Times the company would build its Vauxhall and Opel Astra cars — currently made in Ellesmere Port in Cheshire in England — in Southern Europe if the UK does not leave the EU on advantageous terms. More than 1,000 workers could lose their jobs if the plant is closed.

"Frankly I would prefer to put it [the Astra] in Ellesmere Port but if the conditions are bad and I cannot make it profitable then I have to protect the rest of the company and I will not do it," Tavares said in the interview, published late on 28 July. "We have an alternative to Ellesmere Port."

The comments came as the Confederation of British Industry (CBI) warned in a new report that neither the UK nor the EU are fully prepared for a no-deal Brexit on 31October.

“The unprecedented nature of Brexit means some aspects cannot be mitigated. We can reduce but not remove the damage of no deal," CBI Deputy-Director General Josh Hardie said in a statement. “It’s not just about queues at ports; the invisible impact of severing services trade overnight would harm firms across the country."

Separately, the Institute for Government warned in a new report of its own that the fallout from a no-deal departure would consume the British government for the foreseeable future.

“Rather than ‘turbo-charging’ the economy," as the new Prime Minister Boris Johnson has suggested, "the government is more likely to be occupied with providing money and support to businesses and industries that have not prepared or are worst affected by a no-deal Brexit — as well as dealing with UK citizens in the EU, and EU citizens here, who have been similarly caught out," the report argued.

Britain is bracing for an increasingly likely no-deal Brexit, with Johnson having vowed to take the UK out of the EU "do or die" by 31 October.