Less than a year ago BMW (LON:0O0U) announced that it would be building a fully electric version of its three door Mini, which would go into production in 2019, soon after the UK leaves the EU.
The actual electric motor itself would be built in Germany and would then be shipped to the UK for installation into the rest of the vehicle. The announcement at the time was predicated on the prospect that the UK would be much further along in the negotiating process when it comes to its departure from the European Union.
The fact we haven’t made much in the way of progress since then has prompted rising levels of nervousness amongst some big businesses that, with the clock ticking, the risks of disruption to their business models and supply chains is rising the closer to next year’s deadline we get - transition period notwithstanding.
It is against this backdrop and almost 12 months closer to the UK’s departure date next year that Jaguar Land Rover this morning followed on from recent warnings from BMW and Airbus (LON:0KVV) that it would have to make contingency preparations for its own business in the event that the UK government is unable to come to a unified position at the weekend on what type of deal objectives it wants to present to the European Union over the next few days.
It is also a timely warning to the UK government ahead of this weekend’s meeting of cabinet ministers at Chequers that for all the posturing from both sides that there are real jobs at stake when it comes to delivering a unified proposal, which will also need to stand the test of time and scrutiny.
In the past few days we’ve had Airbus also warn of similar concerns and the ease of movement of goods when it comes to its own supply chain, with respect to its own factory in Wales, which makes the wings for the various fleets of aircraft including the A350 and A380.
Airbus’s concern is not hard to understand as it would take time to build a new wing factory. This is even before you consider how to move that expertise in the allotted time if talks break down irretrievably, and as the deadline gets closer, businesses are becoming increasingly concerned about.
In the last 12 months it has become increasingly difficult to establish what sort of direction the British government wants to go in, and sadly it isn’t being helped by the fact that the official opposition doesn’t really have a coherent alternative position either, being equally split on what it would do if the positions were reversed.
This lack of coherence and internal divisions would appear to suggest that the most likely outcome from this weekend’s Chequers meeting is some form of fudge, with the end result that businesses may well have to continue with some form of contingency planning into the autumn.
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