Rolls-Royce Says Production Could Be Crippled By Brexit Issues

Rolls-Royce chief executive Torsten Müller-Ötvös says the British automaker’s plant in Goodwood could be crippled by potential Brexit complications.

These fears only multiplied today after UK Prime Minister Theresa May suffered a devastating legislative defeat when the Parliament rejected the deal with the European Union on the terms of Brexit by 432 to 202.

The automaker’s just-in-time production system means it doesn’t typically hold parts for more than 24 hours and this method of production could be harmed by Brexit, whether or not the UK reaches a deal with the European Union.

In preparation for a no-deal Brexit on March 29, Rolls-Royce has started to train suppliers in new import procedures, is investing in new IT systems, and preparing to have certain parts flown in from overseas if port deliveries are delayed due to customs issues.

“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.

“You only need to miss one component and you can’t finish the car,” Müller-Ötvös revealed to Autonews Europe.

Only 8 per cent of Rolls-Royce parts are produced in the UK. As such, the company imports roughly 32,000 parts from more than 600 global suppliers to build its vehicles. The company undertakes 35 truck journeys across the English Channel per day to ensure production runs smoothly.

British Prime Minister Theresa May has proposed an exit agreement with the European Union but it’s expected to be rejected by national lawmakers.

While Rolls-Royce is aware that its production could be harmed by the UK leaving the EU, Müller-Ötvös said that there’s no chance the car manufacturer will shift production outside of Britain.