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Old 10-24-2002, 07:25   #1 (permalink)
Mr. Embargo
 
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Ford the car company that insists Britain should dump the pound

Ford, the second biggest car manufacturer in the US, wants Britain to dump the pound and hand over control of its economy to un-elected officials in Frankfurt and Brussels, so that it can make a bit more money.

That might not be exactly what Sir Nick Scheele, president and chief operating officer of the Detroit-based company, said in an interview on Tuesday morning with BBC Radio 4s Today programme.

But it would certainly be the outcome of the action he called for.

Scheele used to make a habit of calling for Britain to join the euro when he was chairman, Ford Europe, but he has been silent on the subject since his promotion to the US parent company, or at least his remarks on the subject have not percolated through to Europe.

On Tuesday, at the opening of the Birmingham motor show, Scheele said Britain should make a commitment to join the euro soon, because that would help Ford make money in Europe.

According to Scheele, Ford UK was a huge exporter but suffered a competitive disadvantage to companies inside the euro zone which enjoyed more certainty on exchange rates.

Id like to see us [Scheele is a Briton] move, Id like us to move quickly. Id like to see a declaration because that would adjust the level at which sterling traded relative to the euro, Scheele told the BBC.

DANGEROUS TERRITORY

Scheele, along with other outspoken foreign car companies like Nissan, is in dangerous territory here.

Sure, it would make life easier for Ford, and Nissan, if Britain was in the single European currency. Come to think of it, it would be easier for the company if there was a single world currency.

It would be easier for organisations like the North American Free Trade Area, grouping the US, Canada and Mexico, if there was a single currency. But for NAFTA nations this would be unthinkable because of the political implications. Americans wouldnt stand for Canadians and Mexicans taking power over their economy.

But the real world is different. Nations are not going out of existence. Exchange rate risk is a given for companies. They will have to be managed.

MORE IMPORTANT THAN ECONOMICS

So why do the likes of Scheele and Nissan president Carlos Ghosn think that Britons are any different from Americans, Canadians and Mexicans?

Scheele and Ghosn believe, as professional bean counters, that a single currency would make sense economically. But they apparently cant see that the issue is much more important than economics. It is above all a political issue, much less resistant to business logic, and which will turn around and bite back companies like Ford and Nissan which are seen as supporters of the hated European Union and its Vichyite conspirators.

Ford and Nissan, and to a lesser extent Toyota (Honda has shrewdly stepped back from this debate and said it is happy with any decision the British people take), are jeopardising their businesses in Britain by taking these positions.

If British Prime Minister Tony Blair calls for the long delayed referendum on euro entry and the political debate hots up again, Ford and Nissan will be identified as foreign political intruders in a domestic debate. Potential car buyers will go elsewhere. Ford and Nissan business will suffer.

SHUT UP ABOUT THE EURO

There is one way for them to avoid this. Shut up about the merits of Britain joining the euro. Take account of the fact that opinion polls in Britain consistently show a huge majority against joining.

There is one final potential irony for Scheele to contemplate. If the famous five economic tests for Britains entry are met, if there is a referendum on joining, and if the euro wins quite a stiff set of fences to jump Id say and if British negotiators sit around a table to seek terms for entry, it is quite obvious that the exchange rate offered will be something quite close to the present rate, which the likes of Scheele and Ghosn feel is so damaging.

So the net result of all this would be an unhealthy rate for Ford and Nissan, in perpetuity.

So button it, gentlemen. The bottom line says it makes sense to stay out, and you understand that better than anything.
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Old 10-25-2002, 17:52   #2 (permalink)
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Great post RPO83.

Ford US should tread very carefully on this issue.
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Old 10-27-2002, 16:36   #3 (permalink)
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the funny thing here is no one wants it in europe ether,
i was in france last week and the people there feel ripped off and i gotta say the cost of things i bought there was higher, as always its used as an excuse to add to the price we all pay.
same in spain to.
we here in the uk are not allowed to use pounds and ounces yet in luxunberg markets pounds and ounces are the norm.
we find that most products are cheeper in europe that here.
the "common" market is not "common" pricing to us working people in the uk and that will not change if we end up with the euro, i feel we are being pushed in to it, britain is a well off country and if we changed to the euro we would loose and rest of europe would gain(again)
working people in uk would be better off without the eec................
i think we tend to have more in common with usa, australia and canada etc.
regards
tony
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