Hard Brexit would disrupt production at Toyota

A ‘hard Brexit’ could likely cause car manufacturer Toyota to temporarily close its UK production site at Burnaston, said Marvin Cooke, managing director of the plant, when speaking to the BBC on 29 September. Over 2,500 people work there.

If the UK government fails to strike a deal with the European Union, the factory will not be able to source sufficient parts, stated Cooke. The site currently receives a parts delivery every 37 minutes, approximately half of which come from other EU countries. The company is afraid that a hard Brexit will disrupt this tightly planned delivery schedule which is at the very heart of its ‘just in time’ production operation.

“If the UK crashes out of the EU in late March 2019, we will not be able to produce cars during that time”, Cooke told the BBC. “We can’t predict whether such interruptions would continue for hours, days, weeks or months.” The cost of halting the production line is estimated at around £12 million a day.

The Toyota factory produces close to 150,000 cars (Auris and Avensis models) each year, approximately 90% of which are exported to other EU countries. Over the past year Toyota has invested an extra £240 million in the site in order to start producing the Corolla there too from the end of this year.

Toyota is not the first

Incidentally, Toyota is not the first car maker to be anticipating a temporary shutdown of the operation in the event of a ‘no-deal Brexit’. BMW has already indicated that it will have to halt production at its British factory for a month, while Honda is planning to stockpile parts. Jaguar Land Rover, the Britain’s biggest car maker, has expressed its fears of incurring £1.2 billion in extra costs if “the wrong decisions” are made.

Source: FD