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Siemens boss Joe Kaeser vows to invest in UK in Brexit U-turn

The German company was among multinational firms to openly back a Remain vote ahead of the referendum on June 23

Zlata Rodionova

Tuesday 12 July 2016 09:12 BST

'We’re here to stay,' Joe Kaeser, Siemens chief executive, said (Getty)

Siemens, the largest engineering company in Europe, has vowed to continue to invest in the UK despite the nation’s vote to leave the EU, backing away from earlier warnings.

The German company, which has 13 plants in the UK and employs 14,000 people across the country, was among multinational firms to openly back a Remain vote ahead of the referendum on June 23.

“We’re here to stay,” Joe Kaeser, Siemens chief executive, said at an event at the House of Commons on Monday.

“The UK matters with or without being a member of the EU. The Brexit vote will not diminish our commitment to your country. Siemens will not leave the next generation behind, ” Kaeser said.

However, he urged the UK Government to unify and agree on the future relationship it wants to establish with the EU. This will reduce both reduce investor uncertainty and create a “clear roadmaps to encourage future investments,” he argued.

Speaking to the Daily Telegraph, Kaeser said the company’s earlier warnings were misunderstood in the heat of the referendum campaign.

“We never said the UK is in bad shape if it leaves the EU: we said the EU would miss a massive opportunity. Without the UK, the EU may never be able to stand up against superpowers like China and the US,” he said.

Siemens had previously said that the EU referendum was a decision for the British people and their view must be respected. However it warned its staff on the “significant and negative long-term effects” of a Brexit vote ahead of the referendum.

Juergen Maier, the company’s chief executive in the UK, was among nearly 1,300 business leaders who signed a letter backing the campaign to keep the UK in the EU.

“In particular, a new trade deal with the EU could take many years to conclude and it is impossible to predict the terms that will be agreed and at what price. This uncertainty, and threat of increased costs, could make the UK a less attractive place to do business and may become a factor when Siemens is considering future investment here,” the company said in a statement in April.

Siemens also said it was putting new wind power investment plans in Hull on hold in the week following the result of the referendum. But Kaeser on Monday said it was too early to take a decision in regards to the Hull expansion.

6 ways Britain leaving the EU will affect you

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1/66 ways Britain leaving the EU will affect you

6 ways Britain leaving the EU will affect you

More expensive foreign holidays

The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more

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6 ways Britain leaving the EU will affect you

No immediate change in immigration status

The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay

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6 ways Britain leaving the EU will affect you

Higher inflation

A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum

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6 ways Britain leaving the EU will affect you

Interest rates might rise

The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output

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6 ways Britain leaving the EU will affect you

Did somebody say recession?

Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018

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6 ways Britain leaving the EU will affect you

And we wouldn’t even get our money back

All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget

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“The Hull investment is not in trouble at all. It was built for the projects we have and for those we anticipate getting,” he said.

Siemens has played a crucial role in the Thameslink and Crossrail projects in the UK and is due to deliver 1,140 commuter rail carriages in London in the coming years.

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