LONDON -- Rolls-Royce's plant in Goodwood, southern England, risks being paralyzed in the event of a hard Brexit if just one component becomes unavailable because of border delays, CEO Torsten Mueller-Oetvoes said.
Like other automakers, the BMW Group unit operates a just-in-time production system. Parts are usually held for no more than 24 hours, and even an expansion of warehouse space will provide only a few days of extra storage, Mueller-Oetvoes said in London.
Rolls-Royce is also preparing for a no-deal split on March 29 by training suppliers in new import procedures, bringing forward an annual production halt to the first two weeks of April, investing in IT systems, and -- like rival Aston Martin -- arranging for some parts to be flown in if ports become snarled by customs delays. Still, the automaker’s "super-fragile" logistics chain remains vulnerable, Mueller-Oetvoes said.
"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," he said in a briefing at Rolls-Royce's Mayfair showroom. "You only need to miss one component and you can't finish the car."
Prime Minister Theresa May's proposed exit agreement with the European Union is widely expected to be rejected by lawmakers when it's put to a vote in parliament next week, keeping the possibility of a hard Brexit on the agenda.
Rolls-Royce sources 32,000 parts used in its vehicles from more than 600 global suppliers, with only 8 percent produced in the UK. That requires 35 daily cross-Channel truck journeys. The level of customization on offer means each car takes about 800 hours to build, adding to the scope for disruption. Other automakers like Jaguar Land Rover have warned that tens of thousands of British jobs are at risk in the event of a no-deal Brexit.