The Brexit challenge: speak out, or hold your tongue?

Multinationals are walking a comms tightrope over whether or not to voice concerns about Brexit.

The Brexit challenge: speak out, or hold your tongue?

When European aviation giant Airbus warned in June that it would hit the brakes on UK investment, irrespective of what type of Brexit deal Theresa May secures with the EU, politicians on both side of the Brexit fence took notice.

The Franco-German manufacturing giant employs 14,000 people in the UK, about half of them in Wales, and a further 30,000 are estimated to work in its supply chain.

Airbus’s concerns centre around the free movement of its employees between the UK and Europe, aviation regulatory friction and potential log-jams in its supply chain.

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The aircraft manufacturer became the first major company to offer such a blunt Brexit assessment, but has since been followed by several automotive giants.

Nissan, which employs 8,000 people in Sunderland, warned that a hard Brexit would cause serious disruption to its production line; BMW said it will down tools in its Mini production line for a month, post-Brexit; while Jaguar Land Rover chief executive Ralf Speth said Brexit could cost the UK tens of thousands of manufacturing jobs.

It’s not just the manufacturing sector that is alarmed. Lansons CEO Tony Langham, whose clientele mostly work in the financial services sector, says most of his clients are concerned about the impact.

"London will remain a great city and a great financial services centre, but it will lose some of its influence in the world and some of its head office presence," Langham said.

Langham believes that over five years there will be a gradual move of operations to other centres, "but it will be very hard to pin down when that happens, even within an organisation".

A recent FTI Consulting study found only 19 per cent of businesses have made "irreversible" operational decisions on Brexit, but 75 per cent expect to do so by February. Tellingly, 76 per cent of businesses say they have a ‘no deal’ contingency plan prepared or in place, and nearly two-thirds (63 per cent) plan to move R&D facilities from the UK to mainland Europe, with the financial services sector the most jittery (76 per cent).

"A lot of businesses have decided not to prepare for a ‘no deal’ yet and they are just waiting to see what happens," said Stephen Day, FTI Consulting's senior managing director of strategic communications.

"There is a view this is perhaps best because we don’t know what the outcome is going to be, but this is not normal or good business practice.

As the 29 March deadline quickly approaches, the uncertainty surrounding Brexit leaves many corporations with little choice but to start communicating their concerns and Brexit plans, argues Hanover group MD of corporate and political strategy Michael Prescott.

"I get the impression that a lot of these companies think the Government has not been paying due attention or doing enough and they’ve taken the decision to go public and apply greater pressure. That dynamic is definitely there in the marketplace," he told PRWeek, adding that most of Hanover’s clients have had to make contingency plans, with some "tweaking their operations".

MHP Communications deputy CEO Nick Barron told PRWeek that companies that are going to be negatively impacted by Brexit should have already begun their Brexit comms by now.

"You need to have issued warnings, not necessarily inflammatory ones, to start laying out the risk," he said. "A lot of companies already have, such as Toyota, Nissan and Airbus; they’ve all made noises that if there is a bad Brexit deal it will have serious implications."

A Brexit backlash

There is a heightened sense of cynicism about companies making operational decisions that impact their UK businesses in this pre-Brexit climate.

Just ask Unilever. The Anglo-Dutch consumer goods giant received a stinging rebuke from City investors for a plan to abandon its headquarters and listing in London for a single ownership structure domiciled in the Netherlands, a move that was subsequently quashed by its board in October.

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Unilever was at pains to point out the move had nothing to do with Brexit, but some pro-Brexit commentators saw the timing as opportunistic.

"Global companies in every country are taking more powers back to head office and they’re reviewing whether they need regional head offices," Langham points out. "It’s unfortunate Brexit has imposed a question mark over London. I don’t think this gives people an excuse – it was happening anyway – but what it has done is brought the question to the top of the agenda."

Prescott told PRWeek that companies making adjustments to their UK operations at any time is usually "unwelcome news", but when it is Brexit related, it adds another emotional dimension. "There’s the risk you become political pawn, with Remainers saying ‘here’s an example of why Brexit is bad’ and Brexiteers being pretty annoyed and trying to question you over whether Brexit is the real reason."

It’s important that companies do not fall into the trap of taking a partisan view on Brexit, Day added, which has been a criticism of Airbus’s stance in spite of the legitimacy of its concerns.

"Companies must be very careful to articulate their view as far ahead as possible, not emotionally, but at the same time be sensitive that this is an emotional issue, particularly for British companies that may relocate parts of their business abroad," he said.

MHP’s Barron warned that companies should be extra careful to take advantage of Brexit as an opportunity to execute operational decisions.

"If you are going to blame the negative impacts of Brexit on your business – it had better be true rather than Brexit being a minor contributing factor to get out of the nation," he said. "[This] doesn’t go down very well with stakeholders, investors and, in some cases, customers."

Fifty-two per cent of Brits, including 66 per cent in Nissan’s home of Sunderland, voted in favour of leaving the EU, which makes it important that companies tread carefully when communicating the reasons for any negative post-Brexit plans.

"If Brexit is the reason, you need the proof points because a lot of people are going to suspect it’s just a lie," Prescott explained. "You also need to pay extra attention to your political stakeholders, local councillors, MPs, local government – you need to be very clear on why it is Brexit-related."

Barron said it’s important that negative comms adopt a "regretful" tone that respects the nation’s wishes, because "these people are still going to be your customers, suppliers, government buyers and the rest of it in the future". He said companies need to be sensitive to employee interests throughout the process.

Another element that needs careful management is the social-media backlash, with Prescott warning there will be additional heat and companies need a clear plan in how they will respond.

Day believes this issue is one of the greatest challenges facing PR.

"From a PR and communications professional point of view, it’s an interesting challenge in every aspect of our industry. Public affairs and public policy people have obviously been engaged on this for a long time, but internal comms people, corporate comms people, investor relations people are all going to need to be involved," he said.

"The companies that succeed will get all of those things right together."

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