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As Brexit Negotiations Drag On: Are Europeans Missing Opportunities as Big as the Sky?

by John Brian Shannon

Countdown to Brexit

Countdown to Brexit. As of August 5, 2018 there are 237 days until the official Brexit date of March 29, 2019.

 

Only 237 days to go until the official Brexit date of March 29, 2019, and only microscopic progress has been made on crafting a ‘Win-Win’ divorce deal.

Such is the state of affairs that exists (1) within the UK, (2) within the EU, and (3) between the two countries. It is to weep.

But whether the United Kingdom or the European Union are ready for Brexit or not, the Brexit baby will be born — therefore, it’s imperative that both sides stop posturing and get on with creating a deal that works for citizens and industry on both sides of the English Channel.


What Else Is There Besides Brexit?

Although it may be difficult for Europeans to see, there are bigger issues in the world than Brexit which is why a deal needs to get done properly and quickly as there are other, more pressing, and more important matters for European politicians to attend to.

If we liken the geopolitical world to an auto race (a Formula One race) while all the other teams are busy prepping for the race and getting to their startup positions, the UK and the EU have found a muddy part of the infield and are playing ‘bumper cars’ with each other like a couple of overly-exuberant teenagers — getting mud all over their sponsor’s brand names and on their respective drivers’ goggles, they’re damaging the tires and composite body of their race cars, and they’re burning up precious fuel reserved for racing against the ‘big boy teams’ of America, China, Japan, India, Brazil and others.

Either the UK and the EU governments already have a deal and just haven’t announced it to the public, or they don’t realize that other more important geopolitical matters will soon bypass the ‘tempest in a teapot’ happening in Europe.

New and important things sometimes start small. Don’t believe it?

The first streetlights were installed in Cleveland, Ohio in 1879 when electric lights (Brush arc lamps) were placed along major roadways. Thomas Edison (who spent most of his day napping in his workshop only to become extremely productive afterward) was a person who toiled away for years inventing and designing a reliable light bulb, manufacturing one bulb at a time. Yet, the lighting industry in its entirety is a multi-trillion dollar business in our day.

George Eastman, right under everyone’s noses created a company in 1888 (Kodak) that eventually made so much money they weren’t always able to count it. New machines had to be built (computers) to keep track of the astronomical number of transactions happening all over the world, every minute of every day. Over the decades Kodak contributed more than a trillion dollars to the global economy and made the company and its shareholders unbelievably wealthy. Kodak’s patents and knowledge are still with us today.

The Wright Brothers ultralight aircraft first flew on December 17, 1903 near Kitty Hawk, North Carolina. At that time, the two men were thought of as odd, even eccentric people with fantastical ideas wasting precious days that could’ve been better spent. Yet, look at what their great invention has created — a multi-trillion dollar civilian airline industry and military aircraft industry.

From tiny beginnings, the first Model T automobile rolled off the assembly line on October 1, 1908 and see the changes the auto industry has brought to the world. Henry Ford is widely credited with the creation of the American middle class, something that propelled America far ahead of its competitors. Today, the world’s auto industry is also a multi-trillion dollar business, yet everyone thought old Henry was a bit of a dreamer.

King George VI united the modern Commonwealth of Nations under the banner, “Leaders agree that Commonwealth members are free and equal members of the Commonwealth of Nations, freely co-operating in the pursuit of peace, liberty and progress.” The Commonwealth now have 53 members with a total population of over 2.5 billion citizens and ranks near the United States, China, or Japan in GDP and PPP.

Steve Jobs created a company that in relatively few years became a trillion-dollar company, designing a computer operating system that was ahead of his competitors, and designed an astonishing number of world-class products, services and apps that allowed users capabilities they’d never imagined.

All of these great advances slipped completely under the radar at the time of their creation. Governments, industry, and citizens were completely oblivious as to what would follow.

The first flight at Kitty Hawk was seen as a sort of carnival ride item that made you wish you’d live long enough to see it come to your hometown, while Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.” Yes, Henry was that far ahead of his contemporaries.

The point is, all these advances and others haven’t stopped at any time during the 20th century — technological advances are happening right now, right under our noses, just as in the time of Henry Ford — and the next Steve Jobs or Henry Ford aren’t going to stop and wait a few years for the UK and the EU to get their Brexit act together.

For all we know, the next trillion-dollar company or multi-trillion dollar industry might be deciding (this week!) where to set-up their ground-breaking operation and such entrepreneurs are likely to avoid regions of the world where economic instability appears or where regulations aren’t finalized. Dragging-out Brexit = European instability.

It’s not against the UK or the EU… it’s against both.

Both will suffer if a stabilized economy and a finalized regulatory environment are seen to be ‘aspirational’ — which is a word entrepreneurs sometimes encounter in developing nations.


Missed Opportunities?

UK and EU leaders should rethink their negotiating ‘strategy’ and factor-in the potential for losing the next start-up, disruptive technology, or multi-trillion dollar industry to a different region of the world, whenever they next meet to discuss Brexit.

Imagine if Europe would’ve ‘had it’s act together’ in previous decades… perhaps Thomas Edison, George Eastman, Orville and Wilbur Wright, Henry Ford or Steve Jobs would’ve started their businesses in Europe instead of America.

Put that in your pipe and smoke it, negotiators.

With financing and instant communications available almost everywhere, the global playing field has levelled since the 19th century, so ‘ease of doing business’ and ‘a transparent regulatory environment’ can make all the difference when today’s entrepreneurs meet to choose a location for the next trillion-dollar business.

We’ll soon know if any of this registers with British and European leaders…

 

Will a ‘No Deal’ Brexit Harm UK Manufacturing?

by John Brian Shannon

Certain pro-EU commentators paint a picture of either a catastrophic Brexit crash-out (Hard Brexit) or a ‘non-Brexit’ where the UK would retain few of the rights gained by a full Brexit but would still be chained to the responsibilities of EU membership (Soft Brexit) whether via the so-called ‘Norway’ model or the ‘Norway-plus’ model, or via any other model such as the ‘Canada’ model.

Those same commentators excitedly cite potential UK manufacturing job losses in the post-Brexit timeframe even though the UK is primarily a service based economy (80.2% in 2014 and rising) and they forget to factor-in the astonishing changes occurring every day in Britain’s manufacturing sector.


UK Manufacturing = Less Than 10% of GDP

Manufacturing in the UK accounts for less than 10% of GDP (2016) and provides jobs for 3.2 million workers (2016) but a recent PwC report says that by 2030 half of all UK manufacturing jobs could be automated. That’s less than 12-years from now. And it could happen much faster and on a much larger scale than that.

Repeat; Up to half of all UK manufacturing jobs will be lost within 12-years. It’s uncertain whether British workers are aware of these looming changes.

Economic impact of artificial intelligence on the UK economy

The economic impact of artificial intelligence on the UK economy. Image courtesy of PwC. Click on the image to view or download the PDF report.


What’s Great for UK Businesses Won’t be Great for Foreign Workers

In 2018, of the 3.1 million UK manufacturing workers (a stat that falls with each passing year as automation increases) we find that over half of manufacturing workers in the UK are citizens of other countries — primarily from eastern Europe, but also western Europe.

So, expect UK-based eastern European workers to be replaced by automation.

Increasing automation and Artificial Intelligence (AI) will cause UK companies to choose between UK-born workers and eastern European workers, and it’s likely that hundreds of thousands (perhaps millions) of eastern Europeans will be returning home with plenty of UK coin in their pocket. (And why not, they earned it)

I hope you didn’t expect the UK to lay-off its own British-born workers in order to protect the jobs of eastern European-born workers as automation proceeds, did you? Would EU companies show that level of courtesy to UK workers in the European Union, were the situation reversed?

Profits for UK manufacturing companies are projected to rise significantly as automation and AI become one with the system, while UK-born manufacturing workers should find themselves at 100% employment.

What’s not to like?


UK Manufacturing Job Losses Due to Automation – Not Brexit

If you’re one of the EU elites who fear that hundreds of thousands of eastern European workers in Britain will lose their UK manufacturing jobs due to Brexit you couldn’t be more wrong.

Let’s be perfectly clear; Half of all UK manufacturing jobs will be lost to automation by 2030 — and it won’t be on account of Brexit!


Summary

The narrative that says the UK economy will be severely damaged on account of manufacturing job losses due to a Hard Brexit is a complete and utter fantasy.

Every day from now until 2030, automation and AI will replace eastern European workers, Brexit or no Brexit. Meanwhile, British-born manufacturing workers will find themselves at full employment.

It’s all good!


Related Articles:

  • How will artificial intelligence affect the UK economy? (PwC)
  • The economic impact of artificial intelligence on the UK economy (PwC)
  • What would be the cost to the UK of regulation by a foreign power and major competitor? (BrexitCentral.com)

Why the UK Should Nationalize Airbus

by John Brian Shannon

Airbus Execs Say Company May Leave the UK in a ‘Hard Brexit’ Scenario

The most obvious thing in the world has finally occurred and the only surprise is that it took so long!

Yesterday, Airbus said it would “reconsider its footprint in the country, its investments in the UK and its dependency on the UK,” and further stated that if Britain crashed out of the EU without a trade deal it would entail an “extremely negative outcome for Airbus,” and “would be catastrophic,” etc., etc.,

Certainly, UK Prime Minister Theresa May has said many times that she doesn’t intend on crashing out of the EU without a trade deal and she and her Cabinet have devoted much time and effort towards obtaining a deal.

Whether the EU side has reciprocated in that drive for a deal is another matter. Many of us understand the reason as some in the EU have hurt feelings, and still to this day some continental politicians can’t understand why the UK is leaving and why more than 17-million voters chose to leave the European Union.

Regardless, the UK is leaving. Of that there is no doubt.


If the EU and Airbus want to continue to sell aircraft to the UK they will continue to operate their facilities throughout the UK with no substantive changes.

But if they do leave, it presents an enormous opportunity for the government and companies in the United Kingdom to purchase Airbus properties in Northern Ireland and in Britain to create a homegrown aircraft manufacturer.


When Someone Wants to Leave, Do Yourself a Favour and Let Them Leave (on good terms)

Whether it’s a marriage, a business partnership, or a foreign manufacturer wanting to pull up stakes — do yourself a favour and let them go.

If you stop them from leaving it’s only temporary anyway! So cut your losses and move on brave souls.

There’s plenty to be said about helping them pack and in engaging in some polite small talk until they’re out the door.

Then, as soon as their gone, pull out a blank sheet of paper and design the domestic aircraft manufacturer of your dreams — and get on with it every day until it’s done!

That’s how you get onto the good stuff and prevent yourself from getting bogged down in anger, self-doubt, recriminations, and what-if scenarios. That stuff will drive you bonkers!

Which is why Theresa May needs to take the bull by the horns and politely inquire as to the asking price of all of the Airbus manufacturing facilities which are scattered all over Britain and Northern Ireland — and buy-out Airbus (UK assets only) ASAP.


It’s no time to be a wallflower, it’s time to create a domestic aircraft manufacturer, par excellence!

One that will create just as many (or more) jobs in the UK as Airbus.


Nationalize Airbus, With Intent to Sell

Nationalizing Airbus throughout the UK would cost a few billion, sure, but investors from all over the world would want to get in on THAT IPO!

Commonwealth countries — which make up 2.5 billion people — should be offered ‘first dibs’ on such an IPO to guarantee their participation in that new company, and to help ensure they will choose to order aircraft from that new entity.

The astonishing success story of Airbus, of Bombardier in Canada, and Brazil’s Embraer all point to the success that a UK airline manufacturer could enjoy (assuming the right management team of course) which could also produce their own ‘joint fighter’ and ‘joint bomber’ jets for Commonwealth and developing countries.

Canada could be tapped to produce the landing gear (for example) while Australia and New Zealand could build many of the components for the aircraft, while items with high labour costs (like sheet metal) could be manufactured in India, and seats and luggage bins could be made in Commonwealth nations in Africa and the Caribbean — and all of it shipped to the UK for final assembly and flight testing.

It really comes down to which Commonwealth country can build the best seats, or the best wings, etc., and then simply arrange a build plan around those capabilities.

‘Canada, what can you build better, cheaper, and faster, than any other Commonwealth nation to add to the new [enter name of aircraft here] and deliver it to us for final assembly on a timely basis?’ That’s how you approach each Commonwealth country.

Once the IPO has raised sufficient capital, the UK government could then sell it to that (primarily Commonwealth) investor group.

Boom Supersonic aircraft flying into the sunset.

As Airbus has concerns about deliveries of Airbus parts manufactured across the UK post-Brexit, Theresa May should relieve them of that concern by nationalizing Airbus (UK operations only). Image courtesy of Boom Supersonic.


Not Only Will UK Airbus Jobs Be Saved, But an Entire Commonwealth-wide Aviation Industry Will Have Been Created!

Which is another way of saying; ‘Thank you, Airbus. I love you, and I will always remember you fondly.”

Once Brexit occurs, UK companies and citizens will no longer have the luxury of coasting along like snowflakes caught in a gentle breeze; Rather, UK citizens will need to ‘Man-up’ or ‘Woman-up’ (as the case may be) to rebuild the country into all that it could’ve and should’ve been, all along!

From now on gentle Britons, it’s sink or swim, win or lose, own or be owned… decide how you want to spend the next 50-years.

A great way to start is for the UK government to automatically nationalize every company that wants to pull out of the UK, hold it for up to 6-months, and then sell it to any appropriate investor group that has strong UK and Commonwealth connections and looks viable enough to pull it off in style.

That’s how you ‘Build a Better Britain’ Theresa May!