Post Brexit political issues within the UK

[Con]

I mentione before that my company which employs over 5000 people in the uk has been actively working on exit strategies. First it is a pharma/life science company that is German owned. However we have been assessing brexit impacts in strategy long term planning. While nothing is decided and at my level I don't sit anywhere near the CEOs I can only speak of my impressions and my own opinion

Based on the way the strategy planning is goin for our industry having to deal with parallel regulatory concerns from a uk body compared to an EU one has def pushed the needle towards the leave the uk part. We have alr day closed one factory and are accelerating plans for several others. The main reasons are good manufacturing practice Gmp regs are arcane to start with without having clarity on how the uk independence from a universal Reg body in the uk will impact us. Also to put it bluntly the uk is not a big enough market to independently run pharma manufacturing.

The assem by among my peers is that we will all be exiting the uk in the near future. I will be in Ireland next week meeting with pharma companies headquartered there and I have already been asked to provide a brexit exit strategy.

For me at least all signs point to a long term pivot by one of the largest and fastest growing markets that's proven to be recession resistant moving away from the uk.

Just wanted to give my impressions so far

Con
Ps excuse spelling doing this on an iPhone in a bar

[mirth]

The marketplace will adapt to tbe Brexit.  The UK camnot be ignored or marginalized. It is too big an economy. It serves no one good to punish or undermine the economy of the UK. Europe is struggling enough as it is.

[OJsDad]

Con,

    I think your companies full of crap.  There are other reasons your companies pulling factories.  Except for the referendum vote, there has been no other action has been taken, nor may it take place.  And if the UK does trigger an exit, then there is no way at this time to know what effect on regulations and trade an exit will have. 

   I can understand not wanting to open a new business or expand until the UK decides what to do next.  But that's a lot different than pulling out. 

[Atilla60]

Also to put it bluntly the uk is not a big enough market to independently run pharma manufacturing.

That *is* a blunt statement  ;D

Meanwhile Novo Nordisk runs R&D and production in Denmark
http://www.novonordisk.com/about-novo-nordisk/novo-nordisk-in-brief/facts-and-figures.html

I don't know anything about the pharmacy industry, but wouldn't it be fair to assume that your company's decision making comes down to an overall business-strategy, rather than the size of the UK market?

[Con]

Con,

    I think your companies full of crap.  There are other reasons your companies pulling factories.  Except for the referendum vote, there has been no other action has been taken, nor may it take place.  And if the UK does trigger an exit, then there is no way at this time to know what effect on regulations and trade an exit will have. 

   I can understand not wanting to open a new business or expand until the UK decides what to do next.  But that's a lot different than pulling out.

Its the world I live in and have worked in for the past 20 years so I do think I have some experience around this.  Plus its not my company that is the only one doing this (which by the way has 50,000 people worldwide and sales of 12.8 Bn Euros last year so we are not a small fish in this pool).

Again I dont want to imply I have specialized or any type of insider knowledge here because I am just a cog in the machine however I am involved in the planning and business development which deals with trends and analysis and customers (we make drugs and service the drug manufacturers).  So its not crap it is happening and as most companies are in heavily regulated industries we prefer stability and will move proactively towards it when possible.

To give you another real world example we are working on a decision to invest over 1 US Billion in a new state of the art manufacturing facility.  Our choices are Asia, or Europe of which one site was an existing facility in the UK.  Want to guess which one was just removed from the potential list to the not happening list?  That happened last week.

I could go on and on about Mab bioprodcution bioSimilars emerging markets single use technology CMOs Cispr, gene editing clinical trials etc etc etc.  Where the UK is strong is drug development not manufacturing and that strength will be significantly weakened by lack of access to EU budgets and duplication of regulations for ultimately a much smaller market.
Here is some light reading I have had to deal with in the last three months.  Pretty much all these articles say that Pharma is damaged by a brexit situation.  So ask yourself where all the global companies are going to invest for their future growth.  The difference in 3-6 months in getting a drug to market can mean the difference of over 500 million dollars over the lifetime of the patent and these decisions are being made daily by pharma companies.

http://www.pharmexec.com/brexit-and-uk-pharma-industry
https://www.statnews.com/pharmalot/2016/06/27/brexit-uk-pharma-ema/
http://www.ft.com/cms/s/0/1a5df2de-13a2-11e6-91da-096d89bd2173.html#axzz4DwAGInM2
http://www.fiercepharma.com/pharma/will-brexit-mean-a-controversial-exit-for-drug-regulation-too-minister-won-t-rule-it-out
http://www.telegraph.co.uk/business/2016/06/29/big-pharma-might-have-shrugged-off-brexit-but-britains-life-scie/
http://blogs.deloitte.co.uk/health/2016/02/what-would-brexit-mean-for-the-pharma-industry.html
http://www.bbc.com/news/uk-politics-eu-referendum-36599417
http://www.reuters.com/article/us-britain-eu-pharmaceuticals-idUSKCN0ZN1W0
http://www.genengnews.com/gen-news-highlights/keeping-a-stiff-upper-lip-despite-brexit/81252874

Lastly its not pulling out its pivoting away because the UK market will be diminished because of the many different ways that the Brexit vote will impact the pharma through access, regulatory and investment.  If I stated pulling out above that was a mistake on my part I wanted to emphasize that the UK was at a crossroads where there was potential more involvement and investment into pharma by the market or less.  And now the needle has moved to the less side.

[Boggit]

a lady who deals with farmers as her clients - cattle feed just went up £50 a bag and their machinery came from Europe - suppliers will not supply the farmer until they know the markets have regulated themselves

pretty much the same with the other 2

as for the other businesses - one of them has been here 40 years and has never known it so quiet and can draw a line directly to the referendum date as the dip

i voted out, i havent a problem with it - just reporting some facts

I don't think anyone's criticising you - we're just surprised, is all.

Like OJ's Dad has said it seems strange as apart from Brexit, we are still in the EU - all the rules etc still apply, and apart from a future change in governance (and certainly not in the short term) has anything legally changed. It sounds like your farmer friend might be better off getting her feed/machinery from Canada, or the US if the euros are playing silly buggers with her.

@Geek
I had some time to reflect on this. The present rules and regulation are still all in place, and likely to be so for two years (indeed probably a lot longer), so the refusal to supply on the same terms seem odd.

I'd suggest your friends take a look with their solicitors at their existing contracts for supply. Particularly, if there are no provisions for unilaterally changing the terms of supply, or for failing to provide notice of change of terms, then your friends might have a right of action against the suppliers.

I can think of a few other causes too off the top of my head, but I suggest your friends, in the first instance, contact their solicitors regarding the possibility of a breach of contract action against their EU suppliers.

[undercovergeek]

ones a barrister, ones a solicitor boggit!!

awesome lesbian legal eagles who hung up their wigs to be green organic landscapers - both brienne of tarth lookalikes and can eat full english breakfasts like youve never seen!!

[Boggit]

http://grogheads.com/forums/index.php?topic=16806.msg445640#msg445640

I mention the above post by Con as it has an interesting paragraph...

Also I work for a large mutli national conglomerate which has significant amounts of business in the UK.  I have been part of several planning scenarios where we are pivoting that business away from the UK due to the potential Brexit problems (mostly to do with drug regulations now requiring a third independent party and the impact of the trade and tarrifs on those regulations).  We have accelerated moving one factory from the UK to Ireland already (though to be fair this decision was made several years ago however one of the conditions of the move was to retain more favorable manufacturing rights with the EU aligning with the thought that the UK is skeptical on the EU and not going to get as favorable trades as they think see chart above)...

It's interesting that he says "We have accelerated moving one factory from the UK to Ireland already (though to be fair this decision was made several years ago however one of the conditions of the move was to retain more favorable manufacturing rights..." So with the decision to move a factory to Ireland several years ago, the Brexit issue is hardly a big motivator, as a few years ago, it was little more than a political discussion topic within the Conservative party and UKIP. I am surprised that Con didn't mention that a likely primary reason for the move is that Ireland has had the lowest rate of Corporation Tax anywhere in the EU, and as such is very attractive to multinationals as they don't pay that much tax.

I get exactly where Con is coming from, and it's purely business convenience with regard to profit. The issues of regulation, tax rates, ease of access to sizeable markets, and quite possibly a cheap workforce that can be exploited are all factors that motivate many global corporations.

The issues of democratic representation, social issues, national identity, concerns about EU federalism etc, etc, are completely irrelevant to many large corporation's, and apparently Con appears to agree with this world view because they are seen as potential road bumps to the maximisation of profit. For many ordinary mortals, these issues are more important than the greed of multinational corporations who will deal with any regime, so long as there is a good profit in it.

The irrelevance of a political regime to multinational profits is nothing new. For example, with good profits to be made with the Nazi's, large multinationals like Coca Cola, Ford Motor Company, Dupont, Standard Oil etc, to name but a few were happy to turn a blind eye to the regime so long as they made a good profit in a "stable" business environment. Now, I'm not suggesting for a second that the EU operates the same way as the Nazi regime did, although there are some worrying parallels with the democratic deficit, the corruption and cronyism, and growing federalism that are hallmarks of the EU as well.
http://www.washingtonpost.com/wp-srv/national/daily/nov98/nazicars30.htm
http://www.historyanswers.co.uk/history-of-war/how-coca-cola-won-a-place-in-adolf-hitlers-heart/
http://www.iahushua.com/WOI/us_nazis.htm

The point is that what concerns multinationals is profit, not morals, nor representation. Look at the number of large multinationals that like working with, for example, China, which again as a one party communist state has a more extreme democratic deficit, rampant corruption and cronyism, and even less attention paid to the rule of law than the EU. Ordinary citizens have other concerns than the greed, and moral bankruptcy of global corporations who want to deal with undemocratic regimes solely for their convenience and profit.

http://www.coca-colacompany.com/stories/celebrating-35-years-of-coca-cola-in-china
http://www.dupont.com/corporate-functions/our-company/global-locations.html
http://www.fordfoundation.org/regions/china#lang-en
http://www.ford.com.cn/
http://corporate.exxonmobil.com/en/company/worldwide-operations/locations/china

I understand multinational corporations will always happily invest in "stable" countries where inconvenient factors like regulations, lack of unions, a "business flexible" political hierarchy (read open to "lobbying [bribery]" by big business), large potential markets like China, India and Russia all present the best opportunities for profit at minimum cost to the corporation. It doesn't mean that the citizens of those countries are necessarily happy with the forms of governance they have to put up with. Brexit gave the UK citizens an opportunity to have their say on the supra-national government. If some multi nationals don't like that, they will mini-max elsewhere for their profits, but that will create a niche in the market for someone else to fill.

[Boggit]

ones a barrister, ones a solicitor boggit!!

awesome lesbian legal eagles who hung up their wigs to be green organic landscapers - both brienne of tarth lookalikes and can eat full english breakfasts like youve never seen!!

Lol! ;D

Well in principle, they are well placed to bite back. ;) Of course, if they have not specialised in commercial law, it would still pay them to take legal advice. Even if they did specialise, speaking as a former solicitor myself, the law can change subtly over time, and there is value in having a more dispassionate view. Despite spending years in the study and practice of law, I still believe there is a lot of truth in the old adage that:

"A man (or woman) who is his (her) own lawyer has a fool for his client, but a lawyer who represents himself (herself) has a client who is an even bigger fool."

[bayonetbrant]

So... Boris as the Foreign Minister eh?

http://indy100.independent.co.uk/article/a-map-of-all-the-countries-boris-johnson-has-offended--W1zaTLC63rW

[Silent Disapproval Robot]

ones a barrister, ones a solicitor boggit!!

awesome lesbian legal eagles who hung up their wigs to be green organic landscapers - both brienne of tarth lookalikes and can eat full english breakfasts like youve never seen!!

You English types have the worst sort of porn.

[bob48]

So... Boris as the Foreign Minister eh?

http://indy100.independent.co.uk/article/a-map-of-all-the-countries-boris-johnson-has-offended--W1zaTLC63rW

Its ether a typical po-faced English joke, or, much more likely, it just proves that we really have lost the plot.

[Sir Slash]

Awww hell. Trump can beat that on a slow weekend.

[Boggit]

Awww hell. Trump can beat that on a slow weekend.

Yep. The real talent is in the US. Trump and "a sadistic nurse in a mental hospital" (Boris Johnson speaking of Hillary Clinton)

Speaking about Clinton that way I wonder is Boris is becoming a good guy for you after all? >:D
http://www.inquisitr.com/1865466/london-mayor-boris-johnson-compares-hillary-clinton-to-a-sadistic-nurse-in-a-mental-hospital/

[Sir Slash]

I for one could learn to love him. But the hair.....