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Brexit is 'not a good omen' for one of the largest carmakers in the world

Jul 22, 2016, 12:38 IST

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London mayor Boris Johnson arrives to speak at a Conservative Party election rally in Hendon on May 5, 2015 in Twickenham, London. Britain will go to the polls in a national election in just two days time.Toby Melville - WPA Pool /Getty Images

General Motors said economic "headwinds" from the UK's vote to leave the European Union may cost the company $400 million (£300 million).

The company said it may cut costs across Europe to deal with the depreciating Pound and economic uncertainty after the June vote, according to a BBC News report. 

General Motors posted record second-quarter earnings on Thursday - $1.86 per share ($1.81 diluted), on net revenue of $42.4 billion - but warned on the prospects in British and European car markets.

Karl-Thomas Neumann, the chief executive of Opel, a GM brand, described Brexit as "not a good omen" for the company in Europe, according to the BBC.

He posted a video on Twitter in which he said the company was "facing strong headwinds at the moment, particularly in our largest market - the United Kingdom." 

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The UK is risking a period of economic uncertainty and the loss of its financial services passport, which can be used by banks based in London to sell services across the EU.

Morgan Stanley CEO James Gorman said this week that his firm would have to launch a new headquarters in Europe. Speaking with CNBC's David Faber about the UK's decision to leave the European Union, Gorman said he recently cut a trip to Germany short to spend time with his employees in London.

"Clearly we and other banks will have to have a European-style headquarters in one of the major markets, whether it's Frankfurt or one of the other cities there," Gorman said.

NOW WATCH: We tested an economic theory by trying to buy people's lottery tickets for much more than they paid

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