The Continent's Corporations Urge U.K. to Remain in EU

Britain's Chancellor of the Exchequer George Osborne, left, and former Chancellor Alistair Darling at an event at the Hitachi Rail Europe plant in Ashford, Kent, in support of remaining in the EU. ENLARGE
Britain’s Chancellor of the Exchequer George Osborne, left, and former Chancellor Alistair Darling at an event at the Hitachi Rail Europe plant in Ashford, Kent, in support of remaining in the EU. Photo: Dylan Martinez/Agence France-Presse/Getty Images

LONDON—As a referendum here 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 RYCEY 2.50 % PLC on Wednesday joined a handful of other multinationals expressing its support for Britain to stay in the EU directly to its employees. Chief Executive Warren East, in an email to the U.K. staff, laid out the company’s case for continued membership in the EU.

Inditex SA, ITX 5.50 % 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 more than 50 European companies.

In the letter dated May 31, Mr. Isla and leaders of other heavyweights such as French cosmetics company L’Oréal SA, LRLCY 1.58 % Swiss Nestlé SA and oil giant BP BP 0.73 % 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.”

And in an interview Wednesday, Novartis AG Chief Executive Joe Jimenez warned the U.K. could lag behind other nations in getting access to new drugs if it left the EU. Mr. Jimenez is currently president of the European Federation of Pharmaceutical Industries and Associations.

Mr. Jimenez said there “could be a longer lag” between drug approvals in the EU and U.K. if Britain opts to leave. That’s because drugmakers might give priority to the larger EU when seeking marketing approvals for their medicines.

Typically, drugmakers seek approval in the U.S. and EU, the world’s two biggest drug markets, before going to smaller markets. Still, a U.K. exit wouldn’t preclude drugmakers from seeking approval there simultaneously. Mr. Jimenez said Novartis submitted its drugs for approval in its home nation, Switzerland, which is outside the EU, at the same time as seeking U.S. and EU approval.

Many of Britain’s biggest companies have been outspoken about the risks of a so-called Brexit, citing among other things the worry that the country’s trading advantages with the rest of Europe could disappear, making it harder or more expensive to export and import goods. A spokesman for German athletics gear maker Puma SE, for instance, said a vote by Britain to exit the EU could eventually lead it to “rethink its model for the import of products to the country.”

The U.K.’s EU Referendum Explained

Should the U.K. remain in or leave the European Union? That’s the question the British public will decide in a referendum on June 23. WSJ’s Niki Blasina explains the debate and what’s at stake.

At the same time, 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.

Rolls-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 workers 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 BAESY 0.82 % PLC this month also communicated the company’s stance on EU membership directly to employees, while avoiding asking them to vote one way or the other. Businesses benefit from stability which membership in the EU provides, he said in a blog posting on an internal company website.

Write to Robert Wall at [email protected] and Denise Roland at [email protected]


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