Creative Solutions To Brexit Problems

I don't think that Brexit is fundamentally about economics, but that doesn't mean it won't throw up economic problems that will need solutions.  For example there is the Nissan car plant in Brexit voting Sunderland.  85% of its output goes to the rest of the EU.  Now that we are leaving the EU there is a possibility that those exports will soon be subject to a tariff - which obviously very directly affects Nissan's margins.  What to do?


From Nissan's point of view there is no avoiding this as an issue.  Even if the UK goes for the softest of soft Brexits that won't necessarily mean that their particular business will be in the soft bit.  And even if the deal allows for tariff free export there is always the risk that a future government either in the UK or the EU might change the deal.   Imagine a crisis that brought UKIP into the cabinet after the next election for example.

But business is business not politics, and they have to manage this kind of risk.  Big changes in energy costs or currency crises, not to mention bank meltdowns are all risks too.  So although no doubt Nissan would have preferred this particular uncertainty not to have been introduced to the mix, they must be used to contingency planning and getting around obstacles.

That they are looking for creative solutions to Brexit problems is what I read between the lines of a report in the Guardian that they are looking for government guarantees to compensate them for tariff duties.  This is quite a neat one.  It might very well be worth it for the taxpayer to make up the difference.  A lot of jobs are at stake here.  Nissan can wash their hands and go elsewhere, but we'll have to support the workers made redundant in some way.

I was wondering what other ideas there might be.  For example, Nissan could carry on making the bulk of the assembly in Sunderland but ship it into the EU to be finished off.  They could invite customers to come to Sunderland to pick the car up themselves from the factory.  The price of the factory tour could be knocked off the price of the car as a discount, so the punter only pays the tariff on a small part of his or her actual outlay.

Or maybe they could take a leaf out of the software industry's book and stop selling cars altogether and go over to leasing them out for an annual fee.  They could then bring them back at the end of the car's lifespan and reduce the supply of second hand Nissans.

I am sure I have just scratched the surface there.  Hopefully we'll do a deal that doesn't penalise foreign investment in the UK.  But if that is what ends up happening, at least we can enjoy seeing how companies try and get round it.  Or at least, the companies that don't simply pack their bags.

https://www.theguardian.com/business/2016/sep/30/nissan-hard-brexit-compensation-new-uk-investment-tariffs