And thousands of employees will lose their jobs.
From the moment the UK voted in favor of Brexit, foreign-headquartered automakers with manufacturing operations in the UK were worried, and rightly so. Reuters and The Financial Times are reporting that BMW may be forced to shutter its Mini and Rolls-Royce UK production facilities if there are supply chain disruptions. “We always said we can do our best and prepare everything, but if at the end of the day the supply chain will have a stop at the border, then we cannot produce our products in the UK,” BMW customs manager Stephan Freismuth stated.
It all boils down to customs arrangements the UK government has yet to finalize with the European Union. Around 90 percent of the parts used in BMW’s UK factories, located in Swindon, Hams Hall and Oxford, receive components from mainland Europe. The potential high cost of importing them would no longer make a viable business case. Even if a deal of some sort is found, there’s still another issue to resolve: timing. “Clearly if parts cannot physically get to a factory at the expected time, that factory will not run as smoothly and reliably as is desirable,” BMW said. If an overall solution can’t be found, then several thousand BMW British employees will lose their jobs.
For now, BMW, which owns both the Mini and Rolls-Royce brands, maintains that business will operate as usual, but the clock is ticking. The uncertainty surrounding Brexit negotiations continues and the Brexit deadline is set for 11pm local time on March 29, 2019. At that time, the UK will no longer be a member of the EU, and there will almost certainly be some business/financial repercussions.