For the next 48 hours, Britain will be obsessed with the result of the UK’s EU referendum on June 23, 2016. A lot of people on the other side of the Atlantic will be closely watching the EU referendum poll, especially small and big US companies.
American companies, by and large, with operations in the UK, such as JPMorgan Chase, General Electric, and Ford, have spoken out against UK’s EU Referendum. There is no upside to after a Brexit vote. Some have even hinted that it could force them to lay off workers.
If the UK goes its own way, it could lead to a huge amount of uncertainty about exports, manufacturing, and distribution throughout the EU. It will become difficult for US-based companies with a factory network spread across the UK and EU to freely sell products and transfer employees without worrying about visas.
Mars has over 10 manufacturing plants in the UK, which serves as a base for candy and other products sale through Europe. Just like Mars, many companies are based out in the UK because of its membership in the EU.
These companies have used Britain has a gateway to Europe for two major reasons – 1) common language, and 2) relative friendliness toward business. A winning Brexit poll could just be a pitfall for these companies.
JPMorgan Chase CEO Jamie Dimon recently made the headlines when he blatantly told his employees at his Bournemouth, England, offices, that the Britain’s exit from the EU could lead to jobs cuts. "After a Brexit, we cannot do it all here and we will have to start planning for that. I don't know if it means a thousand jobs, 2,000 jobs. It could be as many as 4,000," he said.
U.S. Commerce Secretary Penny Pritzker agrees. "If there was a decision to leave, then there would have to be a renegotiation of all the various agreements that exist today," she told NPR. "That will create incredible uncertainty that could have a ripple effect."
Small companies too, will be affected on the other side of the Atlantic. In a recent survey, it was found that an overwhelmingly large number of small companies are opposing Brexit. US-based small companies which are trying to break into the EU will now have to go through two different approval process.
On the other hand, there is currency rates, which would decline the value of the pound market and make UK a favorable manufacturing destination. But it’s a rose-tinted view, since revenue would also decrease for companies that do their business there. A lot of US companies rely on UK sales – Moson Coors, PPL Corp, Penske Automotive Group Inc., et al.
For a business set in any geography, dealing with any country in the world it’s about stability in trade. It can make or break a business. The recent dramatic gains by ‘leave’ camp in EU Referendum’s latest poll tracker has become a headache for US corporate executives.