"The drastic fall of Sterling, as well as the uncertainty over future trading arrangements with the European Union, have increased both present costs and future risks for the firm. This has made it increasingly hard to win contracts outside of the UK."
At the end of the day businesses have higher costs or are leaving the UK because of Brexit.
There's no point denying the reality. Nobody can argue that right at this moment Brexit is driving business success.
Bank of America spent $400 million to relocate from UK to Ireland. [1] for example. And they're not coming back.
Don’t take everything at face value: a fall in Sterling necessarily means that an exporters products are cheaper overseas, so should boost sales. Unless their costs were already higher than their revenues, in which case they were doomed anyway. The reason brexit will be bad for exporters is the possible future imposition of tariffs. This hasn’t happened yet, so actually in the short term brexit is relatively good for them. Just to be clear I’m against brexit, however in this case blaming brexit for the failure is wrong.
Yes, but equally it means that imports are more expensive. We can interpret the statement as implying that the company imports a lot of parts, etc. Let's remember that Ireland uses the Euro so they just need to import from across the border to feel the pinch.
This manufacturer is in Northern Ireland, so they can use Euros if they want anyway. And current plans are for a frictionless border. The argument as Brexit causing it to close is silly, its grossly mismanaged.
This hasn’t happened yet, so actually in the short term brexit is relatively good for them.
Except that isn't born out by the figures, UK manufacturing is weakening at the moment. The pound might be delivering higher profits on foreign trade but it isn't delivering more orders yet.
>At the end of the day businesses have higher costs or are leaving the UK because of Brexit.
Though I personally (and not being involved in it directly or indirectly) think Brexit is essentially a "stupid" move by the UK, I don't think that it - in itself - should cause any particularly dramatic change, after all the world worked fine even before the European Economic Community and the consequent easyness in import/export within the EU.
Surely there will be some changes in procedures and probably some added bureaucracy but nothing that cannot be taken care of.
From experience, in the '70's and '80's exporting from Italy to the UK involved having a "special" status as "registered exporter" at the Ministry and filling a number of Customs and Bank forms (only for the record and as a curiosity, some of these forms were needed in some 10 copies and at the time the "most powerful" electric typewriter we had available could make at the most 6 or 7 carbon copies, so each form was typed twice).
I have the feling that Brexit is used as a sort of scapegoat or that linking it directly to the bad results of companies (most probably due to a number of different reasons) is a way to attempt influencing the people to be against it.
The most recent round of proposals involved filling in customs forms for moving goods within the UK (to Northern Ireland). Not only is it a cost, but it's an uncertain one that's impossible to properly prepare for. Especially when the government keeps threatening "no deal".
You can bet it will be, even though we are at the end of an economic cycle, with half of the world already in recession or on the verge of a recession, and the other half dangerously heading that way.
Lots of mention of Brexit in this article, and not many mentions of the fact that the owners of Wrightbus were pumping huge amounts of money into religious organizations, as well as giving themselves large bonuses while _at the same time_ laying people off and declaring large losses.
I'm not saying that business owners should not be allowed to donate to religious groups, but when the donations in a given year are greater than the amount of money the company is losing, there is something seriously wrong.
That should be true for any charitable donation - I'm surprised it isn't already. I wonder if the directors could face loosing their limited liability for this.
"Its founder, director and senior pastor is Jeffrey William Wright, known as “Pastor Jeff”, who is the son of the founder of Wrightbus, William Wright. Pastor Jeff is also the majority shareholder in Cornerstone."
> On top of this, comes the inescapable elephant that is Brexit. This may only be one of the factors affecting Wrightbus, but it is arguably the crippling final blow. Wrightbus is a Northern Ireland based supplier, dependent on parts and orders from the EU and beyond, a strong UK economy, and a stable period of national and local government. All of those pillars have been cracked by Brexit.
None of those things have changed, or been changed by Brexit in this timeframe.
Sterling has fallen because of Brexit. This increases the cost of importing parts, etc. from foreign suppliers.
Brexit was also expected to have already occurred so customers may have taken a cautious approach regarding orders that may have spanned Brexit occurring.
I guess there is also the issue of maintenance and sourcing parts from them during the life-time of the busses.
It is not unreasonable to accept that Brexit may have caused customers to conclude that it was safer to pick other suppliers for the time being.
Currencies rise and fall, the cost of Al (in the UK) was more expensive in 2010 than it is now. (And if you're a buyer outside the UK the fall of sterling would be a good thing, no?)
I'm having a hard time getting past the relative difference between the losses and the donations to Green Pastures, to blaming Brexit.
If you’re an investor making a 5 year investment, or a foreign customer making an order for delivery over a year and spare parts for years thereafter, the levels of tariffs are pretty important, no?
On that purchase, nothing. On future buses (when you expand your fleet), or on spare parts for routine maintenance: unknown tariff. Business don't like unknowns.
If you make a deal to buy a bus (or 1000) today, what tariff would you be incurring as a result of Brexit?
None. There would be no tariff at the moment. Yay!
But... if you buy 1000 buses you don't pay for them right now unless you're a crazy person. You pay for them in the future, and there might be a tariff then.
And if we're post Brexit, what tariff is the UK going to impose on a UK manufacturer that kills it's business?
If the UK leaves without a deal then the WTO tariffs are applied instead of the zero-rated EU trade zone agreements that are in place right now. For 'light commercial vehicles' that tariff varies from 10-22%. In other words, a UK bus manufacturer will never sell a bus in the EU ever again as long as the WTO rules are in place.
The good thing is that the withdrawal agreement or No Deal brexit is only the first step on the long and arduous journey that is Brexit. We would work to negotiate a new trade deal either with the EU or with each individual member. So, hopefully, that tariff wouldn't apply for ever. Eventually we'd be able to sell buses in the EU again, assuming the manufacturers manage to survive that long. It's probably that they'd move their businesses to the EU before that though, and employ EU citizens instead and pay tax to the new country the business resides in. It's not good for the UK.
> And if we're post Brexit, what tariff is the UK going to impose on a UK manufacturer that kills it's business?
The UK wouldn't impose the tariff, the EU would do based on reacting to a UK imposition on their businesses.
And I think everyone in Europe rightly believes the UK government couldn't find it's own actual self interest with both hands, so there's no reason to assume they will act rationally.
> Today, it shares the complex ‘just in time’ outsourcing and parts delivery model seen in the world of car manufacture. The drastic fall of Sterling, as well as the uncertainty over future trading arrangements with the European Union, have increased both present costs and future risks for the firm. This has made it increasingly hard to win contracts outside of the UK.
- low-valued GBP increases costs of parts from abroad
I didn't see numbers but IIUC a major issue was that they had a generally bad reputation and did most of their sales in the UK. It sounds like they priced in UKP.
Others maybe considered it an opportunity, however as part of the looting the owners set up a different company that owned the land. That company was not being sold and demanded a fairly high rent, so the two potential buyers decided to pass at the last minute.
The real issue here was the company being looted by the owners and brexit at most made it harder for them to continue looting. The submitted article is obviously completely ignoring the main issues. There are probably better descriptions of the real issues around, but the best overview I saw (not at all a neutral source but with sources for most claims):
I saw a couple of those links from discussions on Slugger O'Toole that have some good comments but rather low signal/noise ratio for someone just interested in this issue.
Brexit sits in limbo. Either it won't happen, which gets more likely as time goes by, or the government will do something extraordinarily stupid and put a border back between Ireland and Northern Ireland.
Arguably one of the big impacts of Brexit is that the government no longer has or is capable of any other policy. Perhaps they could have attempted a rescue. Or a clawback of the donations (see Sir Philip Green and the BHS pension fund). But the Westminster government is crippled by its own incompetence, and Stormont has been absent for three years. It reconvened very briefly on Monday in an attempt to stop the abortion law in Northern Ireland being brought up to date (because that's obviously the most important thing facing NI, right?), but that fizzled out.
The new Routemaster is really terrible in a few important ways, very cramped with zero ventilation making it an oven in the summer, although the two sets of stairs and three doors makes boarding slightly better - yet encourages fare-dodging. A classic vanity project.
> although the two sets of stairs and three doors makes boarding slightly better - yet encourages fare-dodging. A classic vanity project.
I don't get it. Many other cities have bus systems where you can enter in any door and don't have to present any ticket to anyone. Why doesn't this work in London or Dublin? Is this even a real problem, or is it just scaremongering?
From my experience in the Dunlin, the choke point of having everyone either validate (or talk to the driver) when entering a bus was _insane_.
The bus is part of a system, as you said, but it's only the visible entry point and when the system is designed around handling individual fares, flat rates, children, free fares for students and the elderly, as well as making it fair and equitable (and relying very much on fares for funding), then you have a bus which must work with that system. Some cities rely on conductors or a vast fleet of ticket inspectors, but London's public transport system might be the biggest and most extensive in the world, and some things don't work well at that scale.
I was hoping for actual studies showing that regular fare dodging is an actual problem in London or in large bus fleets in general. The honor system + occasional inspection seems to work pretty much everywhere else I've visited, but again, I'd like to see some numbers on this.
I think it's a shame they didn't leave the back open so you could hop on and off like the old Routmasters. I guess in the health and saftey age you can't risk someone falling over but the old ones were really handy for places like Oxford St where the traffic does like 4mph.
Double deckers are awesome. I don't understand why there aren't more of them in the world: double the density of commuters should be desirable in congested cities.
Many big cities that would be eligible for double deckers already have trams. And I think there is a problem with the height of the double decker vs. the typical height of overhead lines for trams.
America seems in general to have a lot of stuff hanging over roads - like traffic lights, signs, electricity lines, phone lines - thing that the UK puts to the side of the road or buries underneath it. Maybe it's because American roads are wider so traffic lights at the side of a six lane road don't really work any more and they have to hang them up for the middle lanes to be able to see them.
If you don't have a 4x4 Chelsea Tractor lobby, you can just use bendy buses. Boarding and alighting is much faster, and there's more space for pushchairs etc.
>If you don't have a 4x4 Chelsea Tractor lobby, you can just use bendy buses.
I fail to see the specific connection between the SUV drivers and bendy buses, as these articulated buses were operational on only 12 routes out of 700+ due to their restrictions. If the implication is that these buses were taken out of circulation due to a vocal lobby of car owners of certain luxury marques, living in salubrious boroughs, then it is a preposterous suggestion. The real reason is that this bus was a death machine ─ snaking along the streets ─ killing cyclists, bikers, pedestrians and motorists alike. Amongst a catalogue of flaws, ranging from being prone to catching fire to acquiring the label of 'free bus' by fare dodgers; it's only saving grace in the near-decade long operation was being wheelchair-friendly.
It is disappointing that you decided to ignore the death and misery caused by this version of the bus and instead chose to pose a question on journalistic integrity. You did not provide evidence or refute any facts to support your claim that bendy buses were indeed safer or the routes even traversed the narrow streets, where 'Chelsea Tractors' (Range Rover/BMW X5/Cayenne), generally used to roam. There is also no evidence, that this 'lobby' you speak of, actually existed, let alone being overly concerned about the surrounding issues.
For the uninitiated, articulated/bendy buses were in operation from 2002-2011, the article linked was written in 2007 in the Evening Standard (ES), when it was still under paid circulation.
As I understand, from a friend at TFL, they could have replaced the whole fleet of buses with electric ones for the same price as this vanity disaster.
> As I understand, from a friend at TFL, they could have replaced the whole fleet of buses with electric ones for the same price as this vanity disaster.
This is interesting. Any published analysis, articles. It would be an interesting read for sure
The Sterling has fallen by more than any trade tariff that I know of (at least for any sizeable market where I’ve seen approx 10%) so whenever I read a business blaming their own failings on Brexit I just can’t take it seriously. I believe service businesses could rightly claim Brexit as a concern but a manufacturing business would benefit more from a falling pound
At least London continues being a city. New York has long since given up on that. It's just a collection of car parks and business locations now (including the overpriced apartments).
52 comments
[ 3.0 ms ] story [ 109 ms ] threadAt the end of the day businesses have higher costs or are leaving the UK because of Brexit.
There's no point denying the reality. Nobody can argue that right at this moment Brexit is driving business success.
Bank of America spent $400 million to relocate from UK to Ireland. [1] for example. And they're not coming back.
https://www.google.com/amp/s/amp.ft.com/content/b9d43bba-2f7...
Except that isn't born out by the figures, UK manufacturing is weakening at the moment. The pound might be delivering higher profits on foreign trade but it isn't delivering more orders yet.
they're currently hiring all across the world, including the UK: https://careers.bankofamerica.com/search-jobs.aspx?c=&r=emea
Says they completed it in December with 125 job moves. They don't need to fire everyone in the UK to change where their money moves.
Though I personally (and not being involved in it directly or indirectly) think Brexit is essentially a "stupid" move by the UK, I don't think that it - in itself - should cause any particularly dramatic change, after all the world worked fine even before the European Economic Community and the consequent easyness in import/export within the EU.
Surely there will be some changes in procedures and probably some added bureaucracy but nothing that cannot be taken care of.
From experience, in the '70's and '80's exporting from Italy to the UK involved having a "special" status as "registered exporter" at the Ministry and filling a number of Customs and Bank forms (only for the record and as a curiosity, some of these forms were needed in some 10 copies and at the time the "most powerful" electric typewriter we had available could make at the most 6 or 7 carbon copies, so each form was typed twice).
I have the feling that Brexit is used as a sort of scapegoat or that linking it directly to the bad results of companies (most probably due to a number of different reasons) is a way to attempt influencing the people to be against it.
I had no idea Bank of America closed its Canary Wharf London office and will "never come back" from Ireland.
These banks aren't going anywhere.
I'm not saying that business owners should not be allowed to donate to religious groups, but when the donations in a given year are greater than the amount of money the company is losing, there is something seriously wrong.
(source https://www.irishtimes.com/news/ireland/irish-news/former-wr...)
This kind of thing really should be illegal.
https://www.londonreconnections.com/2019/the-rise-and-fall-o...
> It [Church set up by Jeff Wright] received more than £15m from the firm in recent years, most of which was donated while the group was profitable.
https://www.bbc.co.uk/news/uk-northern-ireland-49869944
I'm sure someone smarter than me can explain how Brexit was the cause of Wright's downfall, especially given Brexit hasn't happened.
None of those things have changed, or been changed by Brexit in this timeframe.
Brexit was also expected to have already occurred so customers may have taken a cautious approach regarding orders that may have spanned Brexit occurring.
I guess there is also the issue of maintenance and sourcing parts from them during the life-time of the busses.
It is not unreasonable to accept that Brexit may have caused customers to conclude that it was safer to pick other suppliers for the time being.
I'm having a hard time getting past the relative difference between the losses and the donations to Green Pastures, to blaming Brexit.
And if we're post Brexit, what tariff is the UK going to impose on a UK manufacturer that kills it's business?
None. There would be no tariff at the moment. Yay!
But... if you buy 1000 buses you don't pay for them right now unless you're a crazy person. You pay for them in the future, and there might be a tariff then.
And if we're post Brexit, what tariff is the UK going to impose on a UK manufacturer that kills it's business?
If the UK leaves without a deal then the WTO tariffs are applied instead of the zero-rated EU trade zone agreements that are in place right now. For 'light commercial vehicles' that tariff varies from 10-22%. In other words, a UK bus manufacturer will never sell a bus in the EU ever again as long as the WTO rules are in place.
The good thing is that the withdrawal agreement or No Deal brexit is only the first step on the long and arduous journey that is Brexit. We would work to negotiate a new trade deal either with the EU or with each individual member. So, hopefully, that tariff wouldn't apply for ever. Eventually we'd be able to sell buses in the EU again, assuming the manufacturers manage to survive that long. It's probably that they'd move their businesses to the EU before that though, and employ EU citizens instead and pay tax to the new country the business resides in. It's not good for the UK.
The UK wouldn't impose the tariff, the EU would do based on reacting to a UK imposition on their businesses.
And I think everyone in Europe rightly believes the UK government couldn't find it's own actual self interest with both hands, so there's no reason to assume they will act rationally.
Nobody knows! That's the problem. WTO tariff on cars is apparently 10% but I didn't manage to find out what it is for buses.
- low-valued GBP increases costs of parts from abroad
- uncertain trading agreements increases risk, likely increases costs higher
- uncertainty also decreases ability to win international contracts
Others maybe considered it an opportunity, however as part of the looting the owners set up a different company that owned the land. That company was not being sold and demanded a fairly high rent, so the two potential buyers decided to pass at the last minute.
https://www.bbc.co.uk/news/uk-northern-ireland-49854380
It looks like they did get a deal once they agreed to sell the land and may be up and running again soon:
https://www.bbc.co.uk/news/uk-northern-ireland-50143581
The real issue here was the company being looted by the owners and brexit at most made it harder for them to continue looting. The submitted article is obviously completely ignoring the main issues. There are probably better descriptions of the real issues around, but the best overview I saw (not at all a neutral source but with sources for most claims):
https://threadreaderapp.com/thread/1175358929162907648.html
Or see the BBC coverage:
https://www.bbc.co.uk/news/topics/c2y152g95yxt/wrightbus-adm...
I saw a couple of those links from discussions on Slugger O'Toole that have some good comments but rather low signal/noise ratio for someone just interested in this issue.
https://sluggerotoole.com/2019/09/28/the-problem-with-earthl...
https://sluggerotoole.com/2019/09/25/1200-jobs-lost-as-wrigh...
Arguably one of the big impacts of Brexit is that the government no longer has or is capable of any other policy. Perhaps they could have attempted a rescue. Or a clawback of the donations (see Sir Philip Green and the BHS pension fund). But the Westminster government is crippled by its own incompetence, and Stormont has been absent for three years. It reconvened very briefly on Monday in an attempt to stop the abortion law in Northern Ireland being brought up to date (because that's obviously the most important thing facing NI, right?), but that fizzled out.
I don't get it. Many other cities have bus systems where you can enter in any door and don't have to present any ticket to anyone. Why doesn't this work in London or Dublin? Is this even a real problem, or is it just scaremongering?
From my experience in the Dunlin, the choke point of having everyone either validate (or talk to the driver) when entering a bus was _insane_.
I fail to see the specific connection between the SUV drivers and bendy buses, as these articulated buses were operational on only 12 routes out of 700+ due to their restrictions. If the implication is that these buses were taken out of circulation due to a vocal lobby of car owners of certain luxury marques, living in salubrious boroughs, then it is a preposterous suggestion. The real reason is that this bus was a death machine ─ snaking along the streets ─ killing cyclists, bikers, pedestrians and motorists alike. Amongst a catalogue of flaws, ranging from being prone to catching fire to acquiring the label of 'free bus' by fare dodgers; it's only saving grace in the near-decade long operation was being wheelchair-friendly.
https://www.standard.co.uk/news/bendy-buses-the-fatal-facts-...
...and the article, along with any possibility of actual journalism from the Standard, ended here.
It's a reasonable argument. It's it true?
For the uninitiated, articulated/bendy buses were in operation from 2002-2011, the article linked was written in 2007 in the Evening Standard (ES), when it was still under paid circulation.
As I understand, from a friend at TFL, they could have replaced the whole fleet of buses with electric ones for the same price as this vanity disaster.
This is interesting. Any published analysis, articles. It would be an interesting read for sure