Foreign Ownership of UK based Companies
- With state boundaries becoming increasingly permeable to flows of investments, many UK-based companies are foreign owned (EDF or Jaguar Land Rover (JLR)), making ‘Made in Britain’ an increasingly complex idea
- For example:
- Foreign governments with sovereign wealth funds (SWFs) - In January 2015, Qatar acquired the entire Canary Wharf financial district for £2.6 billion and owns 95% of the Shard and the Chinese government owns a 10% stake in Heathrow Airport
- TNCs - in 2010, Kraft USA acquired Cadbury's and the UK car industry is mostly foreign-owned
- Sovereign wealth funds (SWFs) are worth hundreds of billions of dollars and allow foreign governments to own assets in other countries, which many see as undermining national identity and threaten sovereignty
- Some countries set a high shareholder threshold, making it harder for companies to be bought out by overseas investors
British car industry
- Once the second largest car manufacturer, with names such as Jaguar, Rover, and Triumph dominating the world's exports of vehicles
- Rising production costs and competition from German and Japanese manufacturers in the 1970/80s, led to a shrinking British owned car industry
- Most UK car manufacturing is now under foreign ownership, which complicates the once iconic British brands
- In an effort to create a fuel-efficient car that was affordable for the masses, in 1957 the Mini was born
- With its very British looks, affordability, and a promise of 'fun, freedom, and adventure' the Mini became a success and soon gained a cult following, even Enzo Ferrari owned a Mini
- In 1994 German owned BMW acquired the Rover Group and began manufacturing the modern Mini in Oxford and Birmingham
- In an effort to keep the 'authenticity' of the brand, the new Mini has optional Union Jack taillights
- BMW have produced a number customisations in order to keep the 'original' car’s fun and friendly personality such as:
- Convertibles
- Hybrid and electric models
- Seating for 5 adults
- Yet despite being assembled in the original factories in the UK, parts are manufactured in other EU countries
- BMW have also run Rolls-Royce since 2003, although manufacturing is still based in West Sussex
- MG Motor UK Ltd has its HQ in Birmingham, but is actually owned by China's Shanghai Automotive Industry Corp (SAIC)
- The MG badge is about the only thing that is British as the car is manufactured in China and then imported into the UK
- Other 'British' car brands such as the Bentley, Jaguar Land Rover and Lotus are all owned by overseas companies
- This raises the issue of the UKs so-called industrial decline, because although the loss of the car industry did lead to reduced employment, output has increased with profits going offshore
Exam Tip
Make sure you can name other examples of foreign takeovers such as food companies, energy and football teams and consider if the 'brand' remains 'British'.