Britain's Auto Industry Warns Against Leaving EU

Britain will hold a referendum on EU membership June 23, and economic arguments are likely to be crucial to deciding how many people vote.

(AP Photo/Frank Augstein)
(AP Photo/Frank Augstein)

The economic argument over the cost of Britain leaving the EU heated up Thursday, with the chief executive of Rolls-Royce Motor Cars telling staff that the bloc's open borders are good for business.

Torsten Muller-Otvos said the EU's free trade arrangements help the firm, which is owned by Germany's BMW Group. In a letter to staff at Rolls-Royce and Mini — which is also BMW-owned — he said "tariff barriers would mean higher costs and higher prices, and we cannot assume that the U.K. would be granted free trade with Europe from outside the EU."

Britain will hold a referendum on EU membership June 23, and economic arguments are likely to be crucial to deciding how many people vote.

Mike Hawes, SMMT Chief Executive, foreground, and Ian Robertson, member of the board of management at BMW, second left, during a press conference of the Society of Motor Manufacturers and Traders Limited (SMMT) UK automotive, focussing on Europe in London, Thursday, March 3, 2016. (AP Photo/Frank Augstein)Mike Hawes, SMMT Chief Executive, foreground, and Ian Robertson, member of the board of management at BMW, second left, during a press conference of the Society of Motor Manufacturers and Traders Limited (SMMT) UK automotive, focussing on Europe in London, Thursday, March 3, 2016. (AP Photo/Frank Augstein)

Foreign-owned firms are wary of accusations of meddling in Britain's decision. BMW head of sales and marketing Ian Robertson denied BMW was saying car prices or labor costs would definitely go up if U.K. leaves the EU. He said the company was pointing out the advantages of the EU's open market covering 28 nations and some 500 million people.

"We've built our business on a 500-million market called the EU, and I think that is a very successful business that we wish to continue to move forward," Robertson told the BBC.

Britain's Society of Motor Manufacturers and Traders said support for continued EU membership is widespread across the auto industry. The group, which represents dozens of carmakers and parts suppliers, said Thursday that 77 percent of its members backed remaining in the bloc in a survey.

(AP Photo/Frank Augstein)(AP Photo/Frank Augstein)

"We are part of a fully integrated European company where we benefit from the free movement of goods and people, and we believe not to be part of the EU would be undesirable for our business and the sector as a whole," said Rory Harvey, managing director and chairman of GM-owned Vauxhall.

While many large British businesses support staying in, some 200 small-business leaders have signed a letter backing an EU exit. The letter, coordinated by the group Leave.EU, said leaving would give firms more "flexibility and adaptability."

Signatories included bosses of taxi companies, couriers, construction and removal firms, mortgage advisers, florists and more.

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