Staying Outside the Euro Means Downsizing UK Auto Industry Says just-auto.com

    LONDON, May 30 http://www.just-auto.com -- The UK auto
industry faces long-term downsizing if the UK stays out of the European single
currency claims Dave Leggett, managing editor of just-auto.com, in an
editorial published on the website at:
http://www.just-auto.com/editorial_detail.asp?id=61
    Multi-nationals with substantial vehicle assembly plant capacity in the UK
are generally lining up in favour of the UK joining the euro.  Automakers with
plants in the UK are making ever more strident noises about their preference
for the UK to join the euro.  Ford is the latest, speaking out in the
interests of its Jaguar subsidiary.
    Leggett says:  "Whatever the rights and wrongs of joining the euro, it is
clear that industrialists are extremely unhappy with the current situation.
The alarmingly fast turnaround in the fortunes of their UK operations due to
exchange rate factors plays havoc with investment strategies.  Many executives
are performance evaluated on short time horizons and cannot afford such
volatility.  A risk-averse executive would surely, other things being equal,
prefer to invest in mainland Europe rather than Britain.  At least he knows
that the exchange rate upon which export assumptions are based is fixed -- and
he's not paying through the nose for hedging either."
    Leggett adds:  "I would feel a little more comfortable about all of this
if the graduation to a higher value added 'niche' industry looked more assured
and capable of filling the gap.  Rising output from the likes of Land Rover,
Jaguar, Bentley and Rolls Royce is obviously welcome, but the loss of 'bread
and butter' volume work and the steady erosion of the supplier base really
provide cause for concern."

    Read the full article at:
http://www.just-auto.com/editorial_detail.asp?id=61

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professionals worldwide.  Targeted specifically at industry and business
professionals the site provides a single point of reference for independent
automotive industry information.