Storrington manufacturer warns of risk to local jobs from Brexit

A leading West Sussex manufacturer has issued a stark warning that leaving the EU will hit investment and risks losing local jobs.

The directors of Storrington-based Tesla Engineering have written to their staff and suppliers setting out their concerns about the impact of a vote to leave the EU in the referendum on 23 June.

Tesla became the latest West Sussex firm to raise concerns about Brexit after Roll-Royce Motor Cars warned its employees last month about the risks of leaving the single market.

Mr Herbert visited the company on Friday (22 April) to hear the directors’ concerns about the “significant" impacts which they fear Brexit would have on their business.

Tesla Engineering is a local manufacturing success story, producing high technology superconducting magnets which are used in medical, scientific and industrial applications.  The company, which has been based at Storrington for the last 40 years, has built a turnover in the region of £40 million, exporting 98 per cent of their products, over half to Europe.  It employs a highly skilled workforce of almost 300 people, some of whom have been recruited from overseas for their specialist skills.

In his letter to Tesla's staff and over 750 suppliers, the firm’s Managing Director, Mike Begg, says that the EU is “very important” for the company as an exporter to the EU and in bidding for large projects in European research laboratories.

Last month the company secured a three year contract worth almost 8 million euros from a leading French research facility, and is working in partnership on an innovative joint project funded by the Dutch Government.

The letter warns that the "implications for employment at Tesla could be significant" if the UK votes to leave the EU, saying that the company would be unlikely to qualify for EU grants or European research projects which underpin a great deal of their business.

Mr Begg raises concerns that customs barriers might result in his company's customers giving preference to EU-based suppliers, warning that "this preference would result in the loss of jobs within Tesla in Storrington and also from Tesla’s UK supplier base”.

He adds that the free movement of labour in the EU is very important for Tesla to enable them to recruit highly specialist skills.

The letter deals a hammer blow to Brexit campaigners who claim that the UK could easily negotiate a tree deal to gain access to the EU’s single market, warning: "Some say that if we vote to leave the EU, the UK is guaranteed a free trade relationship like the ones enjoyed by both Norway and Switzerland.  What they do not reveal is that such arrangements always include businesses complying with all EU regulations, and so there is no competitive advantage for Tesla being outside the EU to compensate for the disadvantages mentioned above”.

Mr Begg concludes: "The directors of Tesla support our MP Nick Herbert in urging everyone to vote for the UK to remain in the EU, to maximise the chances for Tesla to prosper for another 40 years”.

Speaking during Mr Herbert’s visit, Tesla’s Chairman, Jim Ramage, said: "I’m really concerned that Britain might decide to leave the EU because of the trade obstacles that that would create for our customers in Europe.

"We ship goods to Europe every week - two or three times - and all it would take is one of these shipments to be held up because of maybe a customs strike or maybe some obstacle and then our customer couldn’t meet his critical deliveries and, in turn, that customer would then be saying 'We would rather not deal with a business in the UK rather than one in the EU'.

"Why take an unnecessary risk with jobs in Storrington and anywhere in the UK?  Let’s stay within the EU."

Nick Herbert said: “I believe that when important local employers like Tesla speak out about the risks of Brexit we should sit up and listen.

“This is a stark warning that local jobs could be lost if we leave the EU.  Tesla is exactly the kind of high-tech manufacturer which this country needs and which hugely benefits us in West Sussex.  The last thing we should be doing is creating unnecessary risk to businesses like these and putting up trade barriers for our exporters."

The MP added: “Eight out of ten businesses back remaining in the EU.  These are the job creators who have real concerns about the impact of Brexit."

ENDS

Notes

   1.    Photograph – Left to right – Jim Ramage, Nick Herbert and Mike Begg in the assembly plant of Tesla Engineering, Storrington.

   2.    The letter from the Directors of Tesla Engineering can be read here http://www.nickherbert.com/data/files/160425_Tesla_EU_Referendum_Letter_1.pdf.

   3.    Watch the video of Dr James Ramage speaking about the benefits of the EU for Tesla here

   4.   Nick Herbert is Chairman of Conservatives IN and is campaigning for the UK to remain part of a reformed EU.  

KEY FACTS

• 116,000 small businesses export services to the EU – and 2 million jobs are either directly or indirectly linked to these exports. 

• A collection of 18 business surveys found that 81 per cent of small businesses back remaining in Europe, with just 19 per cent wanting to leave. 

• Small businesses also benefit from cheaper supply chains: only 41 per cent of the value chain of a car manufactured in the UK actually come from the UK – the rest are imported. 

• The EU has free trade deals with over 50 countries around the world – markets which small businesses have access to sell and buy from. 

• The EU is now committed to improve access to finance for small businesses and simplify regulations – including specific targets to cut bureaucracy and reduce red tape. 

• The Bank of England, the IMF and a whole host of other independent experts have predicted that a vote to leave could cause an economic shock for the UK – and small businesses and the jobs they create would be the worst affected.