With the United Kingdom moving forward in the process of leaving the European Union, automaker Rolls-Royce and others are preparing to run into border delays that could bring production to a halt.
As of Tuesday, the latest news from the Brexit decision is that plans have come to an uncertain stall after Parliament rejected Prime Minister Theresa May’s terms 432-202. The U.K. has 78 days until the proposed deadline of March 29.
Rolls-Royce operates a plant in Goodwood, southern England, and sources a majority of its parts (92 percent) from outside the country. Since it runs on a just-in-time production system, parts in local warehousing will not be able to sustain production for more than 24 hours. Rolls-Royce is preparing by readying supplies for new import procedures, moving an annual production halt forward to early April, changing supply lines so some parts are flown in, and investing in IT, according to Bloomberg.
Rolls-Royce Chief Executive Officer Torsten Mueller-Oetvoes called for caution during a briefing in London on Wednesday, Jan. 9. “You can plan for whatever you want but you can’t store up weeks of parts, and if the logistics chain breaks it will affect production,” he said. “You only need to miss one component and you can’t finish the car.”
He has said that moving out of the United Kingdom is not an option for Rolls-Royce, because of the legacy and identity of its British-made luxury brand.
Here are how some other major manufacturers are responding to Brexit:
- Airbus, which makes aircraft wings in the U.K., is also preparing to switch some parts delivery from sea to air in case of customs delays at port.
- Jaguar Land Rover has announced it will cut 4,500 jobs globally in response to a sales slowdown after the 2016 Brexit vote.
- Honda Motor Co. is scheduling its annual production shutdown in the U.K. for just after Brexit.