Jaguar Land Rover Boss Says Brexit Stockpiling ‘Not An Option’
The CEO of Jaguar Land Rover has shot down suggestions that automakers can stockpile in preparation for a no-deal Brexit. He stressed the logistical challenges of the idea…
“Not Possible At All”
Jaguar Land Rover has had a rough time as of late. Declining sales of diesel models and late shifts towards electrification have given it cause to reflect. So it may come as no surprise that its CEO, Dr Ralf Speth, isn’t best pleased with the idea of a ‘no-deal’ Brexit. Whilst unveiling the company’s new Defender model, he shot down suggestions that stockpiling could mitigate the risks of the scenario.
Emphasising the sheer amount of parts and components production lines relied upon, he said “you have to know that we need 20 to 25 million parts per day delivered on time at the assembly lines in order to produce a vehicle. And if you don’t have the one part, where ever from, we don’t produce the vehicles”. He added, “stockpiling 20 million parts a day for more days is not possible at all. Nobody has got the warehouses, not the IT systems, not the logistical devices to make these kinds of stockpiling happen.” Speth has previously suggested that that lack of a deal with the EU could cost the business £60 million a day.
Sensitive Supply Chains
The automotive industry utilises an exceptionally sensitive supply chain. Millions of parts are, quite literally, delivered to plants at the last minute. This isn’t a product of negligence, it saves manufacturers millions as it avoids the need for warehousing and complex logistics. However, it does present significant risks. As Speth suggested, even a slight delay can quite literally bring production to a halt. The fear is, then, that a ‘hard’ Brexit could cause chaos at the border as customs struggles to contend with radically altered standards. Some automakers, like Aston Martin, have suggested that they’re prepared to literally fly parts and components to their plants. Others have implemented shut downs in order to prepare for the worst. But for volume-manufacturers, stockpiling just isn’t feasible beyond a few days.
No industry has been as critical of ‘no-deal’ as the automotive industry. The Society of Motor Manufacturers and Traders (SMMT) has repeatedly warned about the direction of Brexit negotiations. Mike Hawes, the SMMT’s chief executive, has even said that the industry would rather “put up” with more months of delay and speculation than face face a hard departure from Brussels. Either way, without parts there won’t be any cars. No cars means no sales; it’s not hard to understand the industry’s perspective.
SMMT: Brexit Extension Must Put An End To ‘No Deal’ – https://www.autoservefleet.co.uk/latest-news/smmt-brexit-extension/
Ford: Bridgend Workers To Receive £130,000 Payouts – https://autoserve.co.uk/motoring-news/ford-bridgend-workers-huge-payouts/