Brexit: and the impact on three of Devon's biggest businesses

Many are saying that Brexit has brought about the collapse of Flybe:
Futures Forum: Brexit: and Flybe for sale
Flybe to be sold or merged thanks to Brexit - Devon Live

The question is whether other business problems are 'because of Brexit':
Futures Forum: Brexit: and waning business confidence in Devon

Devon Live has been doing a bit of research into the question:

Fact checking claims that Brexit is to blame for upheaval of three of Devon's biggest brands

It has been ten days of turmoil for some of Devon's biggest companies and the effects of Brexit are partly to blame

Hannah Finch
15 NOV 2018

Three of Devon’s biggest businesses have faced upheaval in the past 10 days and Brexit is partly to blame.

From manufacturing, custard makers and the South West’s only airline, the effects of leaving the EU have been cited in the business decisions being made by the bosses at these brands either selling up or shipping out.

Uncertainty, falling value of the pound and fear of rising costs have all been contributing factors.

But it won’t be their biggest concern, said Stuart Elford, Chief Executive of Devon and Plymouth Chamber of Commerce. He said: “Brexit is a factor but it is among many factors considered in business decision making and planning. There’s no doubt that Brexit is a distraction, but decisions about location or selling a business are very complex.

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“What businesses really need is clarity and certainty and I hope that we are a bit closer to that. Once businesses know what they are dealing with, they will find a way.”

DevonLive Business takes a look at the part Brexit has had to play.

Barden Corporation (UK) Ltd in Plymouth

The Barden Corporation (Image: Penny Cross)

Staff affected: 365

This massive ball bearing manufacturer has been lauded as on of the region’s biggest employers and has shown no sign of trouble with its components in huge demand in motor vehicle and aeronautical sectors across the globe.

But Plymouth and the region was dealt a huge blow on November 6 when parent company Schaeffler announced that it is to close The Barden Corporation (UK) Ltd plant in Estover within the next two years.

The company highlighted the uncertainty surrounding Brexit as a factor in its decision to shut the factory throwing jobs for 365 workers in doubt.

Juergen Ziegler, regional chief executive Europe, said: “Brexit is clearly not the single decisive factor behind our decision-making for the UK market, but the need to plan for various complex scenarios has brought forward the timing.”

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Only around 15 percent of the goods Schaeffler produces in the UK remain in the country, while the vast majority is exported to continental Europe.

Greg Littlefair, UK managing director of Schaeffler UK Limited, said that global business disliked uncertainty and wanted to see open borders to ensure frictionless trade. He said: “Uncertainty in any business, certainly one that operates globally, is appreciated as little as possible.”

The Plymouth operation produces precision bearings for cars, aircraft, the nuclear industry, missiles and satellites. Operations in Plymouth will be undertaken by a similar plant in the United States.

Ambrosia in Lifton

The Ambrosia Factory in Lifton, Devon

Staff affected: 300

Food giant Premier Foods announced on Tuesday that it is intending to sale Ambrosia, Devon’s prime custard and pudding makers. Ambrosia has been made in Devon for than 100 years but there has been a downturn in pudding eating, partly because of the hot summer and because Premier reduced its promotional investment in the brand.

Premier has insisted that the factory will not close but it hopes that a new owner can be found to invest in the company.

There is no suggestion that Brexit is behind the sale.

But Premier Foods, which also owns Bisto, Hovis, Mr Kipling and Branston has said that it intends to stockpile raw materials in the run-up to Brexit over concern about gridlock at UK ports.

The firm said it was taking steps "in the absence of certainty over the arrangements for the UK's departure from the EU".

Premier Foods said it expected to spend up to £10m on the preparations.

Watch the history of Flybe



Staff affected: 2,300 including 1,000 in Exeter

Flybe has been struggling for some time to find a profitable spot in the market place and announced it was intending to go up for sale on November 14.

The airline, which employs 1,000 people at its HQ at Exeter, has faced a number of challenges including rising fuel costs, falling sales for short haul flights and a drop in the value of the pound.

The value of the pound fell dramatically in value following the vote for Brexit in June 2016 and continues to remain under pressure. It means it is more expensive for travellers abroad and for conducting business.

Prior to the referendum, the average exchange rate between the GBP and the euro stood at £1.28, but by October 2016 it dropped to £1.12 before picking up again. It is expected that if a no-deal Brexit looks increasingly unlikely, the value will rise.

Fact checking claims that Brexit is to blame for upheaval of three of Devon's biggest brands - Devon Live
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