August 8, 2020, 3:01

Philips to Close Last Plant in the UK, Says Brexit Harms Exports

Philips to Close Last Plant in the UK, Says Brexit Harms Exports

The company has announced its decision to move production to the Netherlands, following a similar announcement by Japan’s Panasonic. Philips’ CEO warned about the possible negative effect of a no-deal Brexit last summer.

Philips, the technology manufacturer from the Netherlands, announced its intention to close its last plant in the UK, citing the feared effect of a hard Brexit on the company’s ability to export its products, The Guardian reported.

Located at Glemsford in Suffolk, the plant employs some 430 people, who will be left without a job after the plant is closed. The plant produces a wide variety of goods, including baby bottles, mostly for export. The production line will be moved to Drachten in the Netherlands next year, the report says.

While the company spokesperson downplayed the effect of Brexit by saying that Philips had intended to close the factory anyway, its official statement explicitly mentions “geopolitical challenges, including uncertainties and possible obstructions that may affect its manufacturing operations” as the deciding factor.

Philips CEO Frans van Houten warned that Brexit would harm company’s exporting capabilities in July 2018.

“I am deeply concerned about the competitiveness of our operations in the UK, especially our manufacturing operations,” van Houten said at the time.

“We estimate that the cost of the exported products will increase substantially under any scenario that is not maintaining the single customs union.”

In October, he stressed that the customs union between UK and the EU was a “minimum” requirement for a negotiated Brexit, The Guardian says.

“If that were not to happen we would need to rethink our manufacturing footprint,” he warned at the time.

Philips is best known for its electrical appliances, including light bulbs and a variety of media and household devices. Recently, however, the company shifted its focus to reportedly much more profitable healthcare products.

Philips is the latest major company to announce plans to stop producing in the UK due to Brexit and its accompanying uncertainties. Last year, Panasonic announced its decision to move to the Netherlands.

According to the EY (formerly known as Ernst & Young) Financial Services Brexit Tracker, as of January 2019, 36%, or 80 out of 222 of the companies they monitored, had “publicly confirmed, or stated their intentions, to move some of their operations and/or staff from the UK to Europe.”

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