Rolls-Royce: No Company Can Plan Properly for the Future After Brexit
Aero engine-maker Rolls-Royce plc (RYCEY) became the latest big British company to warn its staff not to vote to leave the European Union, saying it would be unable to plan properly for the future in the years of uncertainty that would follow a “Brexit”.
In an e-mail to its 23,000 staff in the U.K., the company wrote that: “The long-term consequences of leaving the European Union are not clear and uncertainty is unsettling for business as it limits any company’s ability to plan and budget for the future.”
Chief executive Warren East, who is already on record as backing the Remain campaign, separately told the BBC that his biggest fear was that it would lose ground against its big U.S. competitors, such as United Technologies’ (UTX) Pratt & Whitney and General Electric Co. (GE).
“We’re making investment decision all the time about where to place different part of our operations, and that uncertainty created by Brexit puts a lot of those decisions on hold,” East said. “That pause is something that our U.S. competitors don’t have to cope with, and that’s why it’s not so good for us.”
The company’s plea to its workforce comes as the Leave campaign appears to have surged ahead in the opinion polls, against a backdrop of concerns over immigration and a widespread resentment of its ruling elite. East’s position is typical of bigger U.K. businesses that are more interconnected with foreign markets than smaller companies, consequently more directly exposed to higher costs of leaving the E.U.’s single market. The company has 14,000 employees outside the U.K. in other parts of Europe in a complex supply chain that cuts across borders. Smaller businesses have tended to be more skeptical towards the E.U.
However, East did note that around three-quarters of the company’s business comes from outside Europe, and said it would work with whatever outcome the June 23 referendum throws at it.
“We’re absolutely going to continue to be a global leader, no matter what,” East said.