Ford in further Brexit warning as plant shutdowns begin

03 April 2019

3 April 2019

Ford will have to take a ′long, hard look’ at its British operations should the country leave the European Union without a deal.

Europe chairman Steven Armstrong made the comments to reporters as the company launched its electrification strategy. Previously, Ford has been vocal about the cost of a no-deal Brexit and the effect it would have on its supply chain and manufacturing facilities in the UK.

′If we were to get to a no-deal Brexit then we would have to take another long, hard look at the operations that we have in the UK,’ Armstrong told Sky News.

Armstrong said Ford is stocking engines in Europe and components in Britain as well as bringing more vehicles into the UK – the company’s third-largest global market, where it builds engines but no vehicles. It manufactures in Bridgend, Halewood and Dagenham and has a research and development centre in Dunton.

One advantage for the manufacturer is its Dagenham plant, which sits on the bank of the River Thames and has its own port facilities. Ford is currently exploring options including improving the port for its European shipping, bypassing potential customs delays at other mainstream ports in the UK.

Armstrong said Ford is spending tens of millions of euros preparing for a possible no-deal Brexit as well as introducing measures such as currency hedges and shifting inventory between countries. The company has yet to decide on its longer-term plans for Britain, he said.

The chairman also added that the best-case scenario was that money spent preparing for Brexit would be ′wasted.’

′We have been clear with the governments in the UK and also in Brussels; we have to maintain frictionless trade at the borders and tariff-free trade. We have spent the last 40 years putting a business together that relies on cross-border trading. We can’t radically reshape on day one so you would have to live with tariffs for a period of time,’ he said.

In January, the vehicle manufacturer said it faces losses of $1 billion (€876 million) if the UK crashes out of Europe with no customs and trade deal in place. The business recently announced a reorganisation, which includes job and model cuts, as it aims to return to profitability following tough trading conditions in recent years.

Shutdowns begin

Carmakers that have brought forward planned annual shutdowns to allow them to adjust following Brexit have started their slowdown periods, despite the extended deadline.

The UK was due to leave Europe on 29 March but political infighting and disagreement over the best deal for the country made this date untenable in recent weeks. With no agreement in sight, the country now has to propose a further extension or leave without a deal by 12 April.

BMW’s Mini and PSA Group’s Vauxhall planned the new shutdown dates months ago and with little time before the deadline extension was announced, the companies said it would be impossible to change their plans.

′This is what our company and our workforce have planned for over many months, and it is fixed into our business planning,’ said a BMW spokesman.