London (CNN Business)Britain’s richest man and Brexit supporter Jim Ratcliffe has abandoned plans to build a new SUV in the United Kingdom, dealing another blow to a car industry that has already been battered by the country’s exit from the European Union and the pandemic.
Ratcliffe is the founder of Ineos, a chemicals company, and has a fortune worth nearly $28 billion, according to Bloomberg’s Billionaires Index. Ineos said in a statement on Tuesday that its first vehicle, the Grenadier 4×4, will be manufactured at a plant in Hambach, France, that the company is buying from Daimler’s (DMLRY) Mercedes-Benz.
“Hambach presented us with a unique opportunity that we simply could not ignore: to buy a modern automotive manufacturing facility with a world-class workforce,” Ratcliffe said in a statement. The SUV, which is named after the London pub in which it was conceived, will enter production late next year.
Ineos had been planning to produce the SUV at a new plant in Bridgend, Wales, creating 500 jobs. Ratcliffe said in statement last year that the decision to base production in Wales was a “significant expression of confidence in British manufacturing.”
Prime Minister Boris Johnson echoed that sentiment at the time, saying that manufacturing the Grenadier in Wales was “a vote of confidence in UK expertise” that would make sure “we keep our status as a pioneer in new vehicle technologies.”
The reversal is a major setback for Bridgend. Ford (F) recently shuttered an engine plant in the South Wales town that had been in operation since 1977 and employed around 1,700 people.
“It’s crushing news the Grenadier car will now be built in France rather than Bridgend, especially following the closure of Ford’s plant,” Ed Miliband, the opposition Labour Party’s spokesperson on business, said in a statement on Tuesday.
A new plant would have been a rare opportunity for the UK car industry, which has been hobbled by years of uncertainty over Brexit. Production has slumped dramatically, and the industry has warned that failing to strike a new trade deal with the European Union before the end of December deadline would cost it £47 billion ($62.5 billion) over the next five years.
Johnson is traveling to Brussels on Wednesday in an attempt to salvage a deal with the European Union. If new trading arrangements are not finalized, cars made in the United Kingdom will face 10% tariffs when exported to the bloc from January 1, badly damaging the industry’s competitiveness.
“Boris Johnson’s dithering, delay, and failure to deliver appears to have led to the loss of two major employers in the area — and it’s devastating that communities in Wales will pay the price of his incompetence,” Miliband added.
The UK Society of Motor Manufacturers and Traders warned last month that leaving without a deal would cut production by 2 million vehicles over the next five years, with annual production consistently falling below 1 million units — roughly half what the industry was planning to make in 2020 just a few years ago.
“We need a future trading relationship that works for automotive. We’ve already spent nigh on a billion pounds preparing for the unknown of Brexit and lost 28 times that to Covid. Let us not also be left counting the cost of tariffs,” SMMT president George Gillespie said in a statement in November.
Another prominent Brexit supporting billionaire, James Dyson, moved the headquarters of his high-end appliances company from the United Kingdom to Singapore in 2019 because Asia offered the “largest and fastest growing market in the world.” Just a few months later he abandoned plans to start making an electric car in Singapore.
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