US Fed and Hitachi warn over Brexit dangers

The head of Hitachi warned on Tuesday that a vote in the UK to leave the European Union in this month's referendum would mean jobs being lost and foreign investment being postponed.

Hitachi office
The warning of the "cold economic reality of Brexit" by Hitachi chairman Hiroaki Nakanishi came hours after Janet Yellen, head of the Federal Reserve, said a 'leave' vote in Britain could have "significant" repercussions for the US economy.Ms Yellen said she ranked the possibility of a Brexit alongside the slowdown in China and sluggish growth in the global economy as important uncertainties confronting the future of the American economy."One development that could shift investor sentiment is the upcoming referendum in the United Kingdom," she said. "A UK vote to exit the European Union could have significant economic repercussions."In an article in the Daily Mirror, Mr Nakanishi described the UK as the "best base" for accessing the European Union's market of 500 million consumers, but he said the possibility of a Brexit represented a "boulder on the line"."In the 1980s, Nissan and Toyota came to the UK on the basis that if they produced here and employed a British workforce, they would be treated as European companies," he wrote."This was only possible because Britain was inside the EU; and so the UK car industry was revived and became an exporter again. From Japan, this incredible success story looks like a huge gain from the UK's membership of the EU."We worry because those advocating Brexit have no answer to how the UK could negotiate cost-free access to this huge market from a position outside it."It would take a long time and result in uncertain market conditions; during this renegotiation period, investors would probably be waiting to see the outcomes, hold back on investment, and jobs would be lost. This is the cold economic reality of Brexit."Brexit would force us and similar companies to rethink, because we still have a European vision, and would be disadvantaged in pursuing it from the UK."We understand the EU is not perfect, but we hope the UK can continue from inside to change it for the better."Strong national policy and membership of Europe can go together."From our viewpoint, attracting foreign investment and high-value job creation depends on staying in and continuing to create a competitive internal market, and in this we hope the UK will be the leading force it has always been."Hitachi Group's operations in Europe employ about 10,300 people. Two years ago, the company relocated the headquarters of Hitachi Rail Global from Japan to London.

For more Relocate Global news and features about the implications of a vote for Brexit, visit our enterprise, UK and Europe sections.

Read more about how the UK economy is weathering seismic changes from around the world including the uncertainty over Brexit in David Sapsted’s analysis for our Spring 2016 edition.

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