Brexit: the British automotive industry will have to adapt

This factory is only a cog in the machine of the European automobile industry. Yet it has been heavily impacted by Brexit. Since the United Kingdom left the European Union, the number of people working in two factories belonging to to the Goodfish group fell by a third.

Greg McDonald is Managing Director of the Goodfish Group: “12 months after the vote, we started to see a drop in work here for one of our Japanese customers – based in the UK – who moved production to the Czech Republic fairly quickly. And we have seen a gradual decrease in this side of our activity and we stopped it 18 months ago. “

European industry relies heavily on parts moving from one factory to another, across open borders, and with nothing to delay their delivery. And British border controls are likely to change everything.

Anna-Maria Basden, Analyst at Fitch Solutions: “This means that today a manufacturer can get the parts they need just a day or two before actually using them. If the just-in-time method was affected, manufacturers would likely have to invest a lot more to be able to start stocking, unless they ran into a shortage. And these small costs, like storage, are not negligible ”.

Industry leaders began to rethink their strategy … “Jaguar-land Rover went to Slovakia and built a huge factory there, continues Greg McDonald. And I finally decided that Slovakia was the place to be because we could get to Poland, Czech Republic, Hungary, Romania very quickly. And we are ready. I visited potential sites. And I did everything I could, except push the button. I will push the button when the customer says, “We need this done on the other side of the Brexit curtain.”

– “And is it inevitable, in your opinion?”

– “Yes I think so”.

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Tadh Enright, Euronews correspondent: “This is a decision that many leaders in this industry are now facing. Whether they are no longer connected to a continuous European supply chain, and if they are faced with red tape and delays crossing through La Manche, should they stay or go?

BMW recently announced that its Birmingham plant will stop producing electric motors and switch back to gasoline and diesel engine production … Products that no longer have a real future.

Car factories represent investments of several billion euros and relocating them is no easy task. Tough decisions will have to be made in the coming months, but it is likely that a rigid border will not work in the UK’s favor.

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