'Hard' Brexit Could See Philips Shift Production Out of Britain, Warns CEO

The Hague: Dutch electronics giant Philips on Sunday it may shift production out of Britain in the event of a "hard" Brexit, saying it was "deeply concerned about competitiveness" of its operations there.

The Amsterdam-based group employs some 1,500 people in Britain, most notably at its baby care products-for-export factory at Glemsford in Suffolk.

"I am deeply concerned about the competitiveness of our operations in the UK, especially our manufacturing operations," Philips chief executive Frans van Houten said.

"We estimate that the cost of the (Philips') exported products will increase substantially under any scenario that is not maintaining the single customs union," he said in a statement emailed to AFP.

Any changes in current free trade agreements, the single customs union and current EU product certifications "is a serious threat to the competitiveness of this factory," Van Houten added, saying "we need to do worst case scenario planning." Philips is the latest company in a chorus of major industrial players -- which also includes Jaguar Land Rover, BMW and Airbus -- to warn about the negative impact of an acrimonious split between the UK and EU.

"At the moment we are considering all scenarios, including one in which there is a so-called 'hard Brexit'," Philips spokesman Steve Klink told AFP.

"In that case, it could include the departure of our manufacturing for export," said Klink.

Van Houten however emphasised: "Philips remains absolutely committed to its current and prospective future customers in the country" including hospitals.

British Prime Minister Theresa May on Friday persuaded her eurosceptic ministers to back a plan for closer trade ties with the EU after Brexit.

After marathon talks at her country retreat, May's divided cabinet agreed on a new "free trade area" where Britain would accept EU rules for goods.

But the British premier still has to sell the plan to Brussels, which could keep Britain tied to the bloc for years after Brexit, even if officials stress parliament would reserve the right to diverge.

May expressed hope the deal would end two years of public splits that sparked exasperation among European leaders and businesses seeking a clear path.

"We are faced with the continued unclarity and uncertainty of Brexit," said Van Houten today.

"Europe is at risk of falling behind the US and China, as they move ahead focused on strengthening their geo-economic leadership," he said.