Prime Minister Theresa May got thecold shoulder in Berlin to her latest plans for Brexit, while Rolls Royce joined the list ofhousehold names firing warning shots over the economic damagethey're facing. On the eve of a Friday cabinet meeting where sheaims to broker a proposal that at least her own government canagree on, the one-two shots underscored how far from a workablearrangement she is, as the clock ticks toward the separation datein nine months.The pound erased gains after Bloomberg reported thatChancellor Angela Merkel's government was unconvinced by May'slatest attempt at a compromise arrangement for customs afterBrexit, seeing it as impractical. Sterling was little changed at$1.3217 at 3 p.m. in London, slipping from as high as $1.3275.“Thenegotiations are reaching a decisive phase,” Merkel said in astatement welcoming May to her office. “Time is growing short andthe political framework has to be declared already in October, sothe British government's decisions over the next few days will beimportant.”Rolls Royce is but the latest company turning up theheat on May, who is struggling to deliver a roadmap to a futureeconomic relationship with the European Union (EU).The aerospacegiant said that it's moving the design approval for large jetengines to Germany to ensure it can continue operating, whateverthe Brexit outcome. While it said the action is “precautionary andreversible” and won't involve jobs moving, the move shows how U.K.businesses and their allies are losing patience.Jaguar Land Rover on Wednesdaywarned the government against further bungling. Compounding thepremier's woes, Stephen Phipson, CEO of the EEF manufacturing lobbygroup, said the U.K.'s industrial giants are all preparing for ano-deal Brexit that causes increased bureaucracy and border delays.Those concerns were echoed in a letter sent to May by a group ofConservative Party lawmakers.“People are starting to plan for theworst-case scenario,” Phipson said in an interview. “Just abouteveryone I've spoken to is starting to now go through thisprocess.”May is struggling to unify her divided cabinet and devisea negotiating position that can advance stalled talks in Brussels.The premier convened a cabinet meeting on Friday at her Chequerscountry retreat to take another stab at agreeing to a proposal ontrade with the EU.

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Investment Woes

Get it wrong, the message from manufacturers is, and Britain willhemorrhage jobs and investment.A bad deal would jeopardize as muchas 80 billion pounds (US$106 billion) of spending over the nextfive years, JLR CEO Ralf Speth said late Wednesday. Extra costs andparts-delivery delays due to new trade barriers would cut profit by1.2 billion pounds a year, according to the automaker.Industrywide, the figure would top 4.5 billion pounds, according toautomotive consultancy AutoAnalysis.Until now, large manufacturershave limited their pronouncements on Brexit, but with key decisiondeadlines approaching, they are increasingly going public withtheir worries.Airbus SE was the first major company to break coverlast month, saying it may have to pull its U.K. investments in theevent of a no-deal Brexit, which May refuses to rule out. Theaerospace giant employs 14,000 people at 25 sites in Britain, andsupports more than 100,000 jobs in its British supply chain. BMWthen said it would be forced to rethink production at its four U.K.plants if products are stopped at the border after Brexit.Some 46Conservative lawmakers, including former ministers under May, havewritten to May urging her to listen to business.“A Brexit dealwithout our trading, enterprising, and innovative businesses andtheir employees at its heart will miss the point,” the lawmakerswrote. “We also urge the Cabinet to recognize that the time fordebating is over and that a model must be found which supports yourambition for a future partnership with the EU which allows forfrictionless trade to continue.”The plan that the premier broughtto Berlin, which the Germans indicated was impracticable, involveda complicated customs setup that would leave the U.K. collectingtariffs on behalf of the EU on goods crossing its border.May inMarch gave a speech outlining her vision, but has made littleheadway since then to unify both her party and her cabinet, whichare split between pro-Europeans who want to maintain as close tiesas possible with the EU, and Brexiteers who are calling for a cleanbreak that frees Britain from the bloc's laws and allows it tostrike its own trade deals.“A few months ago, manufacturers wererather hoping we'd be in a place now where it would all be clear,”said Phipson. “It's really important we get some clear messagescoming out of Chequers this week, and in the White Paper. What wedo not want to see is just another set of aspirational objectiveshere. It needs to be quite detailed in order for people to use itfor planning.”

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