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UK manufacturing giant Unipart could move investment to the US

By Nithya Bose in UK Business News, posted April 26, 2023

The boss of major UK car parts maker Unipart CEO said he is considering moving it to the US or Europe as UK businesses cannot "compete on a level playing field."

Jon Neil said the company had scrapped plans to invest in Britain due to the issue and is now considering relocating to take advantage of the help business gets in other parts of the world.

For example, the US spends on loans and tax breaks to help electric car makers, green energy, and microchip makers.

The EU is also planning to relax state help rules for companies in green sectors.

In contrast, the UK has yet to outline its approach, with Chancellor Jeremy Hunt telling the BBC that he would wait to see the EU’s actions before making decisions.

The firm is headquartered in Oxford and has over 8,000 staff.

It makes vehicle parts and components and manages supply chain logistics.

Mr Neil said America's Inflation Reduction Act (IRA) offered firms a "completely game changing set of incentives and fiscal support" that was difficult to ignore.

He said: "I've asked our team to think very carefully about our investment strategy in the US and our US operations and whether we should be pivoting more into those markets and possibly also into our European companies.”

The IRA provides grants, loans, tax breaks, and subsidies worth billions to encourage the production of goods such as electric vehicles and green energy.

The only way the company can benefit from these is to move manufacturing to the US.

It follows similar financial commitments in the US Infrastructure Bill and the Chips Act, with a goal to boost spending and enhance domestic production of major microchips.

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The US bills are targeted partly at fixing supply chain issues that emerged during the pandemic and partly at limiting America's reliance on China for key strategic technologies.

But they have sparked fears of protectionism among US allies like the European Union, which is considering its subsidies in response, Korea, Japan, and the UK.

Mr Neill said: "No one envisaged that the Americans would change the rules to the extent they have, it just seemed kind of un-American in a way. But they have.

"For us to invest we need to understand what Britain's strategy is and what our regulatory framework is going to be. And we're not clear about any of that."

Source: BBC

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