Japanese firms warn UK of pending ‘offers from Europe’ amid Brexit uncertainty
BREXIT means Brexit (and no one knows what that means), but for businesses in the U.K., Brexit means survival of the fittest. Japanese companies with branch offices in Britain have warned that foreign businesses will not rule out relocating and rethinking investment decisions if the U.K. government fails to negotiate a satisfactory economic relationship with the rest of the E.U.
According to the Guardian, Japanese companies have begun receiving offers from other European countries and are contemplating postponing investment decisions as U.K. Prime Minister Theresa May’s government is currently at a stalemate in negotiations with the E.U.
President of the Japanese chambers of commerce in the U.K., Haruki Hayashi – who is also the European CEO of Mitsubishi – told U.K. members of parliament (MPs) that foreign companies are in need of more than just “general reassurances” if Japan’s investment presence in the country is to remain.
Hayashi was quoted saying: “Some examples of areas of concern for Japanese companies include validity of the single passport system, the free movement of skilled workers between the U.K. and different parts of Europe, and whether the continuation of the current environment of uncertainty will lead the Japanese companies to postpone further investment decisions.”
In October, foreign companies started feeling the effects of the Brexit vote with a weakening sterling, as third quarter results revealed that profit losses were forcing them to consider hiking up the prices of goods for U.K. customers in order to cover the costs.
— Dr Paul Monaghan (@_PaulMonaghan) October 25, 2016
Reuters reported that firms like carmaker Ford, computer manufacturer HP Inc., and airlines Ryanair and Delta Air Lines, all took a hit due to the fact that profits made in the U.K. fell in worth when translated to dollars or euros.
In the same month, Japan’s Fujitsu announced it would be slashing about 13 percent of its workforce in the U.K. in a bid to stay competitive – however, they claimed the move has nothing to do with Brexit.
In his address to MPs at a reception in the Japanese embassy, Hayashi added that all the instability that has risen around Brexit – from the sterling’s worth to the possibility of being restricted from the single market – is a major cause of concern for the wellbeing of businesses.
“I cannot speak on behalf of each individual member of the chamber,” he was quoted saying. “But the message coming through loud and clear is that more than general reassurances are called for at this stage to ensure that the Japanese investment presence in the U.K. is not diminished for lack of consultation and information sharing.”
Brexit secretary David Davis sought to reassure the reception, saying that the U.K. will be “a beacon of free trade”, adding that May’s government intends to negotiate for a “comprehensive trading” agreement with the E.U.
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