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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!

Time to Begin Planning for Life After Brexit

by John Brian Shannon

It looks like the so-called ‘Project Fear’ campaign has failed in its quest to force referendum after referendum until they got the answer they wanted (which to observers, seemed they wanted to stay in the European Union at any cost) and that Brexit will occur on March 30, 2019 as planned.

All that remains to be decided between the UK and the EU is whether future relations will be based on World Trade Organisation rules, or on a bilateral trade agreement that allows both sides to prosper while maintaining a reasonable level of protection for national sovereignty, for their respective economies, and is able to shelter startups or other businesses that may require some form of special treatment or protection.

Either UK and EU leaders are up to the task, or they’re not. We’ll soon know.

And if they aren’t up to the task, every one of them deserves to get the boot at the next election.


First on the Agenda for the UK

Of paramount importance for the UK are free trade agreements with its Commonwealth partners — agreements that automatically come into effect within 24 hours of the official Brexit date.

It’s important to begin with Commonwealth trading partners because if Commonwealth nations aren’t willing to sign bilateral trade agreements with the UK, why would other countries want trade deals with the UK?

(If I represented a non-Commonwealth country and the UK couldn’t get its act together enough to sign worthwhile free trade agreements with its own Commonwealth partners, I wouldn’t be interested in signing with the UK either)

Yesterday, Australia’s Prime Minister generously indicated his country will sign a bilateral trade agreement to automatically come into effect the day after Brexit, and New Zealand, Canada, India, and other Commonwealth nations have indicated they’re open to bilateral trade agreements with the UK too.

Therefore, it isn’t a reach to suggest that such agreements be ready for a signing ceremony the day after Brexit and that UK foreign direct investment (FDI) in those countries will thenceforth take an instant leap forward.

The time to get such negotiations done is NOW so that a simultaneous signing ceremony can be televised across each of the Commonwealth’s 53 capital cities at 00:01 (in the UK timezone) on March 30, 2019.

What a tribute to enduring relations between Commonwealth members. Such a historic moment!


Second on the Agenda for the UK

No later than 24-hours after Brexit (which puts us at March 31, 2019) the UK should have free trade agreements automatically coming into effect with every economy in the world — agreements that work for each country just as well as they work for the UK.

‘Win-Lose’ thinking is no longer an option in the 21st century and anything less than ‘Win-Win’ isn’t worth spit. In fact, unless trade agreements are ‘Win-Win-Win’ these days, their value is questionable.

FOR EXAMPLE:

If the UK offers a ‘Win-Win’ trade agreement to China, but Japan offers a ‘Win-Win-Win’ trade agreement to China; Which of the two countries will be China’s most favoured trading partner?

Obviously, Japan’s offer would win, and the UK offer would simply gather dust as Japan’s relationship with China surged forward.

These negotiations must occur NOW and be led with a high level of urgency by Prime Minister Theresa May and Secretary of State for International Trade Dr. Liam Fox, so that by April 1, 2019 the UK will have bilateral trade deals with every country in the world — that automatically come into effect the day after the official Brexit date.

Anything less than that stellar achievement should be considered by UK voters to be a mediocre performance by the (then) ruling party in the UK House of Commons.


The world wants UK goods and services right now, and especially in the post Brexit era.

The world wants quality UK goods and services both now and in the post Brexit era.