COPY LINK

BUSINESS

French car giant Peugeot sees ‘very nice opportunity’ in Brexit

French carmaker PSA, which this week bought Opel and Vauxhall in a bid to create a European champion in the auto industry, must still face the uncertainty of Britain's withdrawal from the European Union.

Published: 8 March 2017 08:48 CET

French car giant Peugeot sees 'very nice opportunity' in Brexit

Photo: AFP

The group believes however that even a so-called 'hard' Brexit, in which Britain would leave the single EU market, could be a “very nice opportunity”.

PSA announced Monday the acquisition of General Motors' European subsidiary, which includes Germany's Opel and Britain's Vauxhall, for 1.3 billion euros ($1.38 billion).

The takeover will see PSA regain its position as the second-biggest car manufacturer in Europe after Germany's Volkswagen group, overtaking its French rival Renault.

British Prime Minister Theresa May is due to trigger Article 50 by the end of March, starting the two-year EU divorce process.

“Brexit is interesting because nobody knows how it's going to unfold,” said PSA Chief Executive Carlos Tavares.

A hard Brexit would see Britain's departure from the EU's single market or tariff-free zone, while ending the free movement of people.

In a more amicable, or soft Brexit, Britain might retain at least some access to the single market in return for free movement of people.

“If it's not a hard Brexit, then everybody will be happy because if it's not hard then the markets will be in a better shape and everybody will benefit from it,” Tavares told a news conference.

In that situation, it will be all about “performance”, allowing PSA “to be competitive in the UK against all the other regions, all the other countries”.

“It can be an opportunity that can be strengthened, eventually by the weakness of the pound.”

Britain is Opel's largest European market, where vehicles are sold under the Vauxhall marque. It also employs about 5,000 people in Britain, most of them in two factories located in Ellesmere Port in northwestern England and Luton in the southeast.

But even a hard Brexit could be “a very nice opportunity” for Vauxhall's supply chain “to be able to source the UK from the UK”, according to Tavares.

“In that situation… possibly it is important that we can source parts from the UK. So that the cost structure will be more in pounds as much as the revenue structure.

“So if it's a hard Brexit, then, of course, the supplier basis needs to be developed, and I think this is something that the UK government completely understands.”

GM blames Brexit

In London, a Downing Street spokesman Monday was asked about reports that PSA was keen to keep a plant in Britain in case of a hard Brexit to protect themselves against potential tariffs.

He said he was not aware of this issue being mentioned in conversations between London and PSA.

“The company themselves have said this morning that Brexit was not the driving factor behind the decision,” he said.

For Len McClusky, the secretary general of the Unite trade union, “there is also a role for the government to play. The uncertainty caused by Brexit is harming the UK auto sector”.

Last year, some 1.72 million cars were assembled in Britain, or 8.5 percent more than in 2015. Eight out of 10 have been exported. Among those shipped abroad, 56 percent were to the European Union.

GM's chief executive Mary Barra blamed the June Brexit vote and the fall in the value of the pound afterwards for 2016 losses. The group had been hoping for a return to profitability for Opel and Vauxhall, but it ended up reporting
a loss of $257 million.

She said the financial results for its European subsidiary “have improved dramatically” in recent years.

“It's clear that the team would have hit the goal of breaking even in 2016 had it not been for Brexit.”

Opel and Vauxhall have booked repeated losses in recent years, costing the Detroit-based GM around $15 billion since 2000.

Member comments

Become a Member to leave a comment.

'I feel exiled': How Brits in Europe are locked abroad with foreign partners

Europe is home to hundreds of thousands of British nationals, many of whom have foreign partners and children. But if they want to move to the UK to live and work it will soon become more difficult.

When it comes to getting a partner visa, the UK has some of the strictest rules in Europe. In addition to hefty fees and a healthcare surcharge, the Home Office requires British citizens and long-term residents who bring their foreign partner to the UK to have a minimum income showing they can support them without relying on the social security system.

The minimum income up until now was set at £18,600 (€21,700), or £22,400 (€26,100) if the couple had one child, plus another £2,400 (€2,800) for each other child.

But these income requirements will rise steeply from April 11th 2024.

How it works: What Brits in Europe should know about UK’s new minimum income rules

From this date the minimum a British national or long-term resident will need to earn if they want to return home will increase to £29,000 (€33,800) and up to £38,000 (€44,313) by spring 2025, although there will no longer be an additional amount for accompanying children.

Alternatively, families need to prove they have at least £62,500 (€72,884) in cash, which from 11 April will increase to £88,500 (€103,207).

‘Family life has been destroyed’

To put this in context the Migration Observatory at the University of Oxford suggests that around 50 percent of UK employees earn less than the £29,000 threshold and 70 percent less than £38,700. The Observatory also says that while the number of people affected by the policy is small compared to the overall UK immigration (family visas represent 5 percent of all entry visas), the impacts on concerned families can be “very significant”.

The Migration Observatory notes that other European countries apply income thresholds to sponsor foreign partners. Spain, for instance, requires sponsors to have an annual income equal to the social security salary. In Denmark, sponsors must not have claimed social benefits in the three years before the application. But in Spain and the US, the partner’s foreign income also counts towards the threshold.

So what does this mean for mixed British and international families living in Europe who might want or even need to return to the UK to live?

Campaigners have complained that many Britons with foreign partners have simply been “locked abroad” or families have been separated while they try to meet the minimum income or savings requirement.

Reunite Families UK, a non-profit organisation supporting people affected by the UK spouse visa rules, says this policy causes distress, especially for children.

Some 65 percent of respondents in research carried out by the group said that their child received a diagnosis of a mental health condition due to the separation of their parents.

“Since its introduction, this policy has destroyed the family life of countless people and children,” Matteo Besana, Advocacy and Campaigns Manager at Reunite Families UK said.

“Women have been forced to become single parents to their children and live away from their partner and the father of their children only because they didn’t meet the threshold.

“As shown by our research on the mental health impact of the policy, these are scars that, particularly for children, will be carried for the rest of their lives,” Besana said.

The people most likely to be affected are women, who tend to earn less or not work because they took on caring responsibilities. Also heavily impacted are people under 30 and over 50 years of age, people living outside London and the Southeast of England where wages are higher, and those belonging to specific ethnicities, according to the Migration Observatory.

The Local spoke to two British women, in Italy and Sweden, struggling to return to the UK with their families because of these rules.

More savings needed

Sarah Douglas, who has been living in Italy since 2007, was planning to return to Scotland with her Italian husband and three children.

“It was always our long-term goal to move back to the UK after we had our children and once we’d have saved enough to buy a home in the UK,” she said.

“In hindsight, we should have gone after the Brexit referendum, but in the beginning it wasn’t clear what the final deal would be and I naively assumed that situations like mine would be taken into account and we would have the right to return… Once it did become clear, we were in the middle of the pandemic and it wasn’t the time to move,” she said.

Having stayed home to take care of the children, Sarah will find it hard to land a job near her family in Scotland that meets the minimum income required to sponsor a foreign partner for a UK visa.

Her husband, a computer programmer, has been trying to get an employment visa, “but most of them state that you must already have permission to work in the UK,” Sarah says. And applying for British citizenship is not an option for a non-UK resident spouse.

‘People need to be aware’

Sarah and her husband are trying to save as much as they can, an alternative to the income requirement, but the amount they need is rising to almost £90,000, meaning it may be a long time before they have enough to move home.

While the aim of the UK’s policy is to ensure families moving to the UK are not a burden on the taxpayer, the reality is that people arriving on a family visa are not able to claim any benefits from the UK government.

“They should judge the overall financial viability of the family unit, rather than just the earning potential of the sponsoring partner,” Sarah says.

“We could live well with my husband’s salary and he could work remotely. We are stable and financially secure, but because I don’t earn any money, they say we are not able to support ourselves.”

Sarah says that most of the British public are unaware of the minimum income requirement.

“People think if you are married, your husband is allowed to come to the UK, but when I say no, it doesn’t work like that, they are really surprised. A lot of people are not aware of how this could affect them,” she said.

Looking for a job from abroad

Another British women who lives in Sweden with her South African husband and two children and plans to move to the UK told The Local how the minimum income requirement had put them in a “precarious and stressful situation”.

The woman, who preferred to remain anonymous said: “After having the two children, I was very fortunate to find a research position and do my PhD, which is a salaried position in Scandinavia, and now that I finished, we are looking to leave.

“But I need a job in the UK to sponsor my husband, and as a new graduate with limited work experience, it is not easy. It is even more difficult when you are not in the country and I missed out on opportunities because they wanted an immediate start. I really don’t want to move without my whole family,” she said.

She says the UK’s policy is “gendered and geographically discriminatory” because it makes life harder for women and also harder for anyone who is planning to move to a part of the country that isn’t in London, where salaries are higher.

“I feel exiled from my country and separated from my family there,” she said.

Her husband, she argues, has his own company and could continue working remotely from the UK, earning well above the requirement. He would also pay taxes and national insurance while having to pay the healthcare surcharge, a form of double taxation, she argues. But that would not entitle him to a visa.

“Our house is on the market now. We have booked removal companies for the 6th of June. The dog is booked for his transport. I just think this policy is so out of touch with the modern world,” she said.

Reunite Families UK has called on the government to recognise the right for British or settled citizens to bring their close family members to the UK and scrap the minimum income requirement. Alternatively, the group says the rules should take into consideration the earning potential of both partners and consider “the best interests of children”.

A petition on the UK parliament website asks the government to reconsider the minimum income policy. If it reaches 100,000 signatures, it will have to be debated in parliament.

This article has been produced by Europe Street news.

SHOW COMMENTS

Url copied to clipboard!