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UK should quit EU unless it reforms, says JCB boss

PUBLISHED: 09:21 18 May 2015 | UPDATED: 09:21 18 May 2015

Embargoed to 0001 Monday May 18

File photo dated 06/12/13 of staff at work at JCB's factory in Rocester, Staffordshire, as building equipment firm JCB said earnings remained above £300 million for the fourth year in a row as a construction boom in the UK helped offset tougher conditions in emerging markets. PRESS ASSOCIATION Photo. Issue date: Monday May 18, 2015. The privately-held firm posted annual earnings down 3.2% to £303 million as machine sales fell 3.3% to 64,028 and revenues slipped 6.3% to £2.5 billion. See PA story CITY JCB. Photo credit should read: Rui Vieira/PA Wire

Embargoed to 0001 Monday May 18 File photo dated 06/12/13 of staff at work at JCB's factory in Rocester, Staffordshire, as building equipment firm JCB said earnings remained above £300 million for the fourth year in a row as a construction boom in the UK helped offset tougher conditions in emerging markets. PRESS ASSOCIATION Photo. Issue date: Monday May 18, 2015. The privately-held firm posted annual earnings down 3.2% to £303 million as machine sales fell 3.3% to 64,028 and revenues slipped 6.3% to £2.5 billion. See PA story CITY JCB. Photo credit should read: Rui Vieira/PA Wire

Britain should leave the EU unless it reforms, a boss at JCB has said, as the building equipment firm reported earnings above £300 million for the fourth year in a row.

Chief executive officer Graeme Macdonald said he did not think quitting the EU would make any difference to the UK’s trade with the rest of Europe.

His comments come as the privately-held firm posted annual earnings down 3.2pc to £303 million as machine sales fell 3.3pc to 64,028 and revenues slipped 6.3pc to £2.5 billion.

Slowing economies, lower oil prices and geopolitical unrest affected some of the world’s most prominent developing nations, but a construction boom in the UK helped offset tougher conditions in emerging markets.

The 69-year-old Staffordshire-based firm said the construction equipment market in Brazil dropped by 17pc last year, Russia fell by 27pc, India by almost 15pc and China by 17pc.

By contrast construction markets in the UK jumped by 30pc and lifted by 13pc in the US.

Speaking to the Guardian Mr Macdonald said: “I really don’t think it would make a blind bit of difference to trade with Europe (if the UK left an unreformed EU).

“There has been far too much scaremongering about things like jobs. I don’t think it’s in anyone’s interest to stop trade. I don’t think we or Brussels will put up trade barriers.”

He said red tape and bureaucracy must be reduced, describing some of it as costly and “quite frankly ridiculous”.

“Whether that means renegotiating or exiting, I don’t think it can carry on as it is. It’s a burden on our business and it’s easier selling to North America than to Europe sometimes,” he said.

On its latest earnings JCB chairman Lord Bamford said: “For different reasons each of the Bric markets - of Brazil, Russia, India and China - were sharply down in 2014.

“However, the broad spread of our business enabled us to benefit from better conditions in North America, Western Europe and particularly the UK.”

The firm, which employs 12,500 staff, sells heavy digging machines in over 120 countries.

Lord Bamford added: “Global market uncertainty has continued into 2015, though our home market of the UK remains a rare bright spot.

“The need for infrastructure in much of the developing world remains acute and will eventually drive a resumption of growth.

“Our resilient performance in 2014 demonstrates we are well placed to capitalise on improving trends as they emerge.”

The business said it had created 2,000 new jobs at its 11 UK plants since 2010, adding that it was currently increasing production capacity at its head office complex in Staffordshire.

It is also building a new 25 million euro (£18 million) head office site at its German business, and last year it opened a 70,000 sq ft factory in Jaipur in India that cost £62 million.

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