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Post-Brexit: Building a License-Based UK Manufacturing Sector

by John Brian Shannon

One of the great things about Brexit will be the opportunity for the UK to sign trade deals with any country in the world and some of those trade deals may be quite innovative in nature. Novel trade opportunities shouldn’t be discounted simply because no one has ever done them, but such deals should be judged on their own merits.

In the age of the 3D-printing technology for example, there’s no reason why a company in America can’t electronically transmit code to a 3D-printer in the UK, allowing the UK company to manufacture the item there. Of course, this means paying a license fee to the American company, but think of the convenience for that UK manufacturer! Not to mention instant access to the item for the UK customer, and it means jobs at both ends of the equation. If you’re concerned about the CO2 emissions involved in shipping something from America to the UK, you’ll appreciate that transmitting a few hundred lines of computer code creates only a fractional amount of CO2.

Even better, is the case for cars and trucks to be built in the UK under license from American automakers.

For example, Ford Motor Company may choose to sell millions of automobile VIN numbers (basically, the serial number of each car or truck) and the complete instruction set for building and assembling each car or truck, to a UK company that specializes in building Ford vehicles. The UK company would pay a per-vehicle license fee to Ford Motor Company U.S.A. and agree to maintain the same high manufacturing standards of the American automaker and it would be required by Ford U.S.A. to adhere to the same warranty terms and conditions.

But still! Think of the CO2 savings, think of the jobs created in the UK, think about the UK building all Ford cars and trucks in the UK for the domestic market and exporting millions of those built-under-license vehicles to Commonwealth countries that have right-hand drive cars. That market, the right-hand drive car and truck market in the Commonwealth of Nations, would become the UK’s ‘beat’ and Ford would grant exclusive rights to the UK company to sell millions of Ford cars and trucks throughout the entire Commonwealth. (Note: Canada drives left-hand drive cars like the U.S., so Canadian cars would continue to be produced in the NAFTA countries)

So far, I’ve only talked about Ford vehicles. But what if it was all vehicles?

What if all American, Japanese, Korean and EU car manufacturers decided to make the same amount of profit per car as they do now, but only needed to sell a VIN number and the ‘vehicle blueprint’/computer code for each car to a UK manufacturer in order to do so? Ergo, all right-hand drive cars destined for UK and Commonwealth customers would be built in the UK and exported, where necessary, from Bristol.

What if it was more than cars and trucks?

What if Airbus, Boeing and Lockheed Martin sold per unit license fees to UK manufacturers, along with Bombardier and Embraer? What if Caterpillar heavy equipment and Toshiba and Hyundai Heavy Industries sold per unit license fees to UK companies? Yes, those companies would earn the same profit per unit as they do now — by selling only the license fee and VIN number and the technical aspects to the UK company — which, in turn, would manufacture those units within the UK and offer them for sale in the UK and to Commonwealth of Nations countries exclusively.

I’m still not done! What if everything sold in the UK was manufactured in the UK? How many jobs would that create?

What if you wanted a right-hand drive Mercedes CLA 250 4MATIC coupe? And what if you could simply order it from Mercedes online, and the Mercedes Benz approved manufacturer would fly you from anywhere in the UK to the factory in Bristol to pick up your new car, right off the assembly line. Some people might like to arrive a day early to watch their own car being built to their own option specifications. Then, you could take a nice leisurely drive home in your brand new car and not have to pay £2000 in shipping costs to get the car delivered from Germany, as is the case now.

What if you wanted an ACER computer, or a Lazy-Boy brand reclining chair? What if you wanted a Texas A&M hoodie for walks with your dog in cool weather? Get one for the dog too, is my advice, you’ll look great together! Or, what if you wanted the latest Italian cookware? Now, what if you could simply buy what you wanted, but it was manufactured in the UK under license from the original manufacturer, and in so doing, you received it sooner, with lower shipping costs, and far lower CO2 emissions — compared to the item being manufactured overseas and then shipped to the UK?

And what about companies in the UK making those items (and many more!) for Commonwealth of Nations consumers — which will number 2.5 billion by 2022?

Great for exports and great for those countries! Why? Well, assuming the UK government doesn’t blow this once-in-a-lifetime opportunity, there won’t be enough labourers in the UK to build all those cars, trucks, forklifts, computers, furniture, t-shirts, medical instruments, dishwashers, etc., etc., etc., and the UK will need to import Commonwealth workers to keep up with demand. Which itself, will help Commonwealth nations improve their per capita, disposable income — meaning, they’ll have more opportunity to afford such items.

Yes, via the UK hiring Commonwealth workers for UK assembly plants, people from Commonwealth nations will then have more money to spend on UK-manufactured goods, goods that might well be assembled by their very own children who work in the UK during their gap year between high school and university. Even mature workers from Commonwealth nations should be able to gain a UK work visa for one-year, to earn some British sterling, thereby advancing their own family finances, and find themselves better able to purchase a UK manufactured car or other item once they return home.

Just because it hasn’t been done before, doesn’t mean it can’t be done.

Just look at what JFK did… he promised America would put a man on the Moon by the end of the decade, and he succeeded in that. Nobody else was doing it, but that didn’t mean it couldn’t be done.

All the UK needs now is for a JFK-like leader (either in UK politics or a captain of industry) to do what nobody else is doing and make this thing fly. Many will say it can’t be done, but I don’t believe it for a second. Only mediocre people say things can’t be done.

So, stop talking about it, and get it done!

Because if you think you can dither and delay for 3.5 years like you did with Brexit, don’t bother trying, as you’ll soon find that every country in the world has beaten you to the punch and it will no longer be worth doing.


It Couldn’t Be Done

by Edgar Albert Guest

Somebody said that it couldn’t be done
But he with a chuckle replied
That “maybe it couldn’t,” but he would be one
Who wouldn’t say so till he’d tried.

So he buckled right in with the trace of a grin
On his face. If he worried he hid it.
He started to sing as he tackled the thing
That couldn’t be done, and he did it!

Somebody scoffed: “Oh, you’ll never do that;
At least no one ever has done it;”
But he took off his coat and he took off his hat
And the first thing we knew he’d begun it.

With a lift of his chin and a bit of a grin,
Without any doubting or quiddit,
He started to sing as he tackled the thing
That couldn’t be done, and he did it.

There are thousands to tell you it cannot be done,
There are thousands to prophesy failure,
There are thousands to point out to you one by one,
The dangers that wait to assail you.

But just buckle in with a bit of a grin,
Just take off your coat and get to it;
Just start in to sing as you tackle the thing
That “cannot be done,” and you’ll do it!

                          ###


And this is the attitude sorely lacking in recent generations. In my generation (yes, I know what that sounds like) our generation arrived at the best plan and got right to it.

We left our egos at the door, we left our personal lives at home, and we got the job done on-time and on-budget — or we were judged by our peers to be ‘not worth spit’.

And while that modality may seem harsh to some, it’s the best way to build a rocketing middle class economy, it’s the best way to create a thriving family lifestyle, and it’s the best way to stay ahead of our competitors who aren’t in the business of working for our best interests.

‘All for one and one for all, must henceforth be Britain’s clarion call’ if post-Brexit Britain is to succeed!

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!

The Synergy of the Commonwealth

by John Brian Shannon

Few things are as useful to countries as membership in a progressive organization with business links around the world.

For the 53 Commonwealth of Nations members meeting in London this week it’s a chance to discuss ideas, policies, united positions on global or regional affairs, to learn from the experiences of other member nations, and to pursue trade opportunities.


Trade

As Britain leaves the European Union by April 2019, Commonwealth of Nations members will discover evermore trade opportunities throughout the United Kingdom. And that trade must work both ways. Countries that allow the UK to export to their country should be encouraged to sell their goods and services to the United Kingdom; making Brexit a ‘Win-Win’ for all Commonwealth member nations.

After Brexit, two-way trade between the UK and EU is expected to drop by a few percentage points (this is normal and not to be feared) however, Commonwealth nations should expect to receive all of that two-way trade availability — and every expectation is that UK and Commonwealth leaders will surpass that low-ish standard.

Further, with restraints removed, the UK will be positioned to negotiate bilateral trade deals with every member of the bloc which should result in a surge of economic activity for every member nation.


Social Issues

Long before it was fashionable for world governments to support equality between people and groups in a society, Commonwealth leaders created the Commonwealth Charter with its sixteen shared principles which include democracy, human rights, freedom of expression, sustainable development, and racial and gender equality, together forming the foundation of the Commonwealth’s constitution.

Prior to 2012, the London Declaration guided the Commonwealth and proved that nations with different capacities and capabilities could work together for mutual benefit, simply by agreeing on shared goals and principles.

Going forward, member nations continue to improve standards and adherence to their principles thereby setting a unique example in national social dynamics to the world.


Immigration

Like many developed nations, UK companies require plenty of low-cost labourers to harvest crops, to work on production lines, and as general labourers on construction projects.

After Brexit, the UK will be able to source a much larger percentage of labourers from Commonwealth nations as the customs agreement with the EU expires.

This could provide tens of thousands of opportunities annually for citizens of the Commonwealth who want to travel and work in the UK — even if it’s only during specific times of year that farmers require additional labourers — who would then return to their home country with their earnings at the end of the season.

During a period of massive construction projects, the same applies; Tens of thousands of workers could relocate to the UK to work in the construction industry and receive a temporary worker permit allowing them to stay in the country and pay taxes for as long as the contractor requires them. At project conclusion those workers could return to their country with thousands of pounds sterling in their pocket.

Such foreign workers should be required to provide a letter from their local police proving they aren’t wanted on criminal charges, a letter from their bank asserting they have sufficient funds to purchase a return airfare ticket (so they don’t get stranded in the UK when their employment ends) and they should be required to pay the Home Office £100 for every year or portion of a year they stay in the UK.


Investment

London is the financial capital of the world and is the ‘go-to’ stock exchange for IPO’s, for mature industries with financing needs, and is the most prestigious exchange on which to list Commonwealth companies.

Once Brexit occurs, billions more in FDI should be flowing from the UK to Commonwealth nations, which should always be the first choice for UK foreign investment.

Special arrangements should be made for individuals and businesses in Commonwealth nations to access UK banks within their home country prior to travelling to Britain.

I will use ‘Barclays’ to make an easy example:

  • Barclays (a global bank headquartered in London) should be required to maintain at least one branch in every major city throughout the Commonwealth, in exchange for a reasonable tax advantage.
  • For workers wanting to work in the UK who must first apply for a worker’s visa, who must first pay the £100 annual fee to reside in the UK, who must first obtain a letter of credit from the bank proving they have sufficient funds for return airfare, and who must first attach a criminal records check letter to their application to the Home Office — such workers should be able to do it all at the Barclays branch and have all the information electronically transmitted to the appropriate Home Office desk and receive confirmation from the Home Office in the time it takes to sip a coffee.
  • For companies that want to import from or export to the UK; the commercial side of the Barclays branch should be set up to enthusiastically assist business owners with every aspect of importing or exporting anywhere within the Commonwealth. Such business owners need only visit a Barclays branch with the idea in hand, and should expect to leave the branch an hour later with every single step completed and be fully informed on every relevant regulation and practice so they can begin importing or exporting the very next day.
  • Companies that need financing within their own Commonwealth country — regardless of whether they intend to import from or export to the UK at that exact point in time — should feel that Barclays is always their first choice for financing, for assistance to list on the LSE, or to go public with an IPO offering. Every related thing must be easily done at Barclays in the absolute minimum timeframe — before that business walks out the door, possibly to a non-UK bank, and possibly for good.
  • If non-Commonwealth banks offer better personal or business financing, better import and export assistance, better stock exchange listing expertise, better IPO experience and support, then the UK economy and banking sector will suffer by not being in the right place at the right time with the right tools to capture that business. And that would be deeply embarrassing for the United Kingdom — a developed nation with deep and historical roots across the Commonwealth of Nations.

Mutual Aid

The UK has much to offer the rest of the Commonwealth especially when it comes to mutual aid; whether military aid during internal or external conflict, or civilian aid during natural disasters, and by working together, individual member nations can be more successful than trying to accomplish such operations alone.

Royal Navy ships for example, could automatically become available for sale to Commonwealth nations at any time past the 6-year mark — at a significant savings when compared to purchasing new ships of equal size and capability.

During national emergencies in member nations, the UK should deploy significant resources to aid those nations. India too, has a sizeable military that could work joint operations with the Royal Navy to assist Commonwealth nations in peril.

Working together on military missions and aid projects, member countries will be able to prove with clearly defined examples of mutual aid, how synergy is the most valuable aspect of membership.


Summary

The Commonwealth in the post-Brexit timeframe should become 100-times more dynamic than it has been.

For as long as the UK has been shackled to EU regulations it’s been a tough go for the bloc, but much has been accomplished. Yet, there is so much potential!

With 2.5 billion citizens living in Commonwealth nations, most of whom are young and will need to purchase many goods and services throughout their lifetimes, it’s an exciting time for the UK to be re-engaging wholeheartedly with the rest of the membership.

“Sixty percent of the Commonwealth is under the age of 30.”HRH Prince Harry’s address to Commonwealth Heads of Government Meeting in London, April 16, 2018.

The reinvigorated Commonwealth is going to out-succeed every country and bloc (and not only in combined GDP growth) but in Trade, Social Issues, Immigration, Investment, and importantly, in Mutual Aid — serving to showcase the kind of synergy that’s possible between nations for the balance of the 21st-century.