European Corporations Urge U.K. to Remain in EU

Date : 06/15/2016 @ 1:50PM
Source : Dow Jones News
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European Corporations Urge U.K. to Remain in EU

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LONDON—As the U.K's referendum on European Union membership nears, many of the continent's biggest corporations are stepping up their own public push to convince Britons to vote to remain in the bloc.

British aircraft engine maker Rolls-Royce Holdings PLC on Wednesday joined a handful of other multinationals expressing its support for Britain to remain in the EU directly to its employees. Chief Executive Warren East, in an email to the company's U.K. staff, laid out the company's case for continued membership in the EU.

Inditex SA, meanwhile, the Spanish retailing giant with brands including fashion chain Zara, used its financial results on Wednesday to urge Britons to vote to remain in the EU.

"While respecting the decision of the people in the U.K., we believe that a Europe without the U.K. would be weaker just as the U.K. itself would be weaker outside Europe," said Inditex Chief Executive Pablo Isla, citing an open letter he signed along with representatives from over 50 European companies.

In the letter dated May 31, Mr. Isla and leaders of other heavyweights such as French cosmetics company L'Oré al SA, Swiss Nestlé SA and oil giant BP PLC said the European Union has given the bloc bargaining power in international trade negotiations and allowed companies and industries to succeed against "external threats."

While many of Britain's biggest companies have been outspoken about the risks of a so-called Brexit, or British break from the EU, fewer have warned of specific and significant disruption to their business. And many of Britain's smaller companies have been outspoken advocates for a break.

Brexit supporters have said the U.K. could quickly hammer out new trade pacts to cushion any blow from leaving the EU trade bloc. And smaller business owners in particular have chafed at what they say is overbearing EU regulation.

William Hynett, chief executive of Britten-Norman, a 170-employee maker of small planes based on the Isle of Wight, is using one of his company's planes to tow a banner across the U.K. urging a vote for Brexit.

"Like all other U.K. firms, whether they understand it or not, we are encumbered by European red tape, which in itself adds costs to our business," he said.

Roll-Royce, one of Britain's marquee blue chips, has long publicly opposed Britain leaving the EU. But Mr. East's email represents a more personal appeal to the company's Britain-based employees, though Mr. East specifically didn't ask employees to vote either way.

"It is in the company's interests to remain a member," Mr. East wrote, adding: "The long-term consequences of leaving the European Union are not clear and uncertainty is unsettling for business, as it limits any company's ability to plan and budget for the future."

Ian King, chief executive of British weapons maker BAE Systems PLC this month also communicated the company's stance on EU membership directly to employees, while also avoiding asking them to vote one way or the other. Business benefit from stability which membership in the EU provides, he said in a blog posting on an internal company website.

The U.K. is home to the world's second largest aerospace industry by sales after the U.S., according to ADS, Britain's lobby group for the industry. The sector generated £ 31 billion ($44 billion) in sales last year and had 128,000 direct employees. The broader sector, including defense, security and space operations, generated £ 65 billion in sales, the trade body said.

Write to Robert Wall at robert.wall@wsj.com and Patricia Kowsmann at patricia.kowsmann@wsj.com

 

(END) Dow Jones Newswires

June 15, 2016 08:35 ET (12:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.

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