Ford told May it could move business overseas because of Brexit

LONDON (Reuters) - Ford Motor Co F.N told British Prime Minister Theresa May during a conference call on Tuesday that it may have to move some production out of Britain because of Brexit, according to a source on the call.

FILE PHOTO: Ford's stamping operations plant is seen in Dagenham, east London July 26, 2013. REUTERS/Olivia Harris

Ford told May it may have to use alternatives sites outside Britain, said the source who spoke on condition of anonymity.

“They were just making clear that they have other options. This isn’t the only one,” the source said.

The Times newspaper earlier reported that Ford told May it was stepping up preparations to move production out of Britain.

Ford is the top-selling automotive brand in Britain, which is its third-largest market and the destination for roughly one in three cars made at its plant in Cologne, Germany. It employs about 13,000 people in Britain.

Car-makers and other manufacturers have warned about the toll a no-deal Brexit could impose, including higher tariffs, disruption to supply chains and threats to jobs. Britain is scheduled to leave the European Union on March 29.

Ford said in a statement it has repeatedly urged the government and parliament to avoid leaving the EU without a divorce deal.

“Such a situation would be catastrophic for the UK auto industry and Ford’s manufacturing operations in the country,” the carmaker said.

“We will take whatever action is necessary to preserve the competitiveness of our European business.”

Last week, Nissan Motor Co said it had scrapped plans to build its new X-Trail SUV in Britain and will produce it solely in Japan, adding that uncertainty over Britain’s departure from the EU was making it hard for it to plan for the future.

Ford, which operates two engine plants in Britain, said last month it faces a bill of up to $1 billion if Britain leaves without a deal.

May’s conference call with business leaders came after she told parliament on Tuesday she needed more time to negotiate a revised Brexit deal.

The United Kingdom is on course to leave the EU on March 29 without a deal unless May can convince the bloc to reopen the divorce deal she agreed in November and then sell it to sceptical British lawmakers.

Business leaders were polite, but there were more pointed statements warning about the damage Brexit could cause compared with a similar call May held with executives last month, the source said.

“No one was saying ‘you stupid woman, you don’t know what you are doing.’ But the mood was different to the last call,” the source said.

Reporting By Andrew MacAskill; editing by Guy Faulconbridge and Stephen Addison