Rattled by the Brexit shock, major US companies are seeking more clarity about the future of the British market, their preferred entry port to Europe.
From clothing chain stores to automakers, the big names of “Corporate USA” have long flocked to Britain, attracted by its tax advantages and a common language, and by the prospect of accessing the European Union market and its hundreds of millions of consumers.
Unsurprisingly, several large US companies had previously voiced support for Britain to remain in the EU ahead of Thursday’s historic referendum that ended with the opposite, unexpected decision: the first exit of a country from the bloc.
With $56.1bn in exports in 2015, Britain is the main destination for US goods in the 28-nation European Union.
The US services sector, especially banks, also has a strong presence in Britain, especially in the City of London, where Wall Street giants employ tens of thousands of people. “American companies’ investments in Britain are worth more than half a trillion dollars, and many of those investments were made to reach not just British consumers but those in the European mainland as well,” said Thomas Donohue, head of the US Chamber of Commerce.
The vote in favour of Brexit immediately raised questions about how American companies would deal with the upended European order and whether they would cut back their investments in Britain.
Questioned by AFP, big companies were careful to not rush into judgement on the developing situation but expressed a desire to see more clearly how Britain’s relationship with its former EU partners would work out.
“The UK is an intrinsic part of our European supply chain and we urge all parties to reach an agreement that quickly removes the uncertainty, allows the UK to retain full access to and from the single market,” said Mark Dorsett, manager for Britain at Caterpillar, the mining and construction equipment maker. That is a crucial issue for US companies: Will Britain continue to benefit from free circulation of goods and people in the EU?
The automaker Ford, which employs 14,000 people in Britain and racks up nearly a fifth of its revenues in the country, certainly hopes so. But it is prepared to switch gears if that proves wrong. “Ford will take whatever action is needed to ensure that our European business remains competitive and keeps to the path toward sustainable profitability,” said Ford spokesman John Gardiner, stressing no changes to current investment plans had been made so far.
Ford’s rival General Motors, which has production facilities in Europe, also called on Britain and the EU to conclude negotiations on a new partnership “in a timely manner” and said it wanted certain guarantees.
“It is also important that business continues to benefit from the free movement of goods and people during this period,” said Klaus-Peter Martin, a spokesman for the largest US automaker.
A prolonged fall in the British pound, which slumped against the dollar and the euro as markets learned of the Brexit result, could also lead certain American companies to review their strategy.
International transportation services company Penske Automotive Group could be hit by a weaker pound because a third of its revenues are generated in Britain.
“A lower pound would mean lower revenues,” said Anthony Pordon, a vice president of the company, who said that Penske was “disappointed with the result of the vote.” Xerox, known for its copiers and printers and with a strong presence in Britain, was less specific.
The company said it was “looking at the long-term implications” of the Brexit vote.
Echoing comments by some other firms, General Electric said: “We respect the decision of the British people.”
Some preferred silence on the unprecedented action.
Casual apparel chain The Gap, which has 131 stores in Britain, and Wal-Mart Stores, which has 625 supermarkets there under the Asda brand, declined to comment.
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