Honda shutdown is a warning of the chaos Brexit could cause #Breaking112
The Japanese carmaker said in a statement that production was stopped at its plant in Swindon on Wednesday due to “transport-related parts delays,” without elaborating on their cause.
The shutdown could be a sign of things to come. Industry groups have warned of potential border chaos and widespread supply chain disruption when the Brexit transition period ends in January, and many UK businesses are not prepared.
UK Prime Minister Boris Johnson will travel to Brussels on Wednesday in a last ditch attempt to agree to a trade deal with European Commission President Ursula von der Leyen. Doing so would spare automakers in Britain tariffs of up to 10% on their exports to the European Union.
But even with a deal, new border controls and customs checks risk holding up critical goods moving between Europe and the United Kingdom, causing major headaches for the UK auto industry. The port of Dover could be one of the worst bottlenecks, and the UK government has warned that lines 7,000 trucks long could form across the southern English county of Kent.
The Road Haulage Association told CNN Business this week that with so little clarity on new customs processes, truckers wary of getting stuck at borders may simply opt to leave goods destined for Britain in European depots, hamstringing the ability of factories to function.
UK ports are already busier than usual because of a worldwide surge in container shipping demand, which is being exacerbated by stockpiling ahead of Brexit and Christmas, the UK Major Ports Group said in a statement last month.
Goods haven’t “moved through ports quite as quickly as we would have wanted,” the trade group’s CEO Tim Morris said Wednesday. He confirmed that there have been cases in recent weeks of container ships skipping UK ports altogether due to congestion and dumping their goods in Rotterdam.
The freight is then reloaded onto other vessels and shipped to Britain. “The situation is improving,” Morris added, but said that “no sensible person” would rule out disruption at UK ports come January.
The German carmaker’s Oxford and Swindon plants have already started their scheduled Christmas shutdowns to undergo planned maintenance, he added. “In general, our business is well prepared for a wide range of different scenarios that may have an impact on delivery schedules.”
The industry is now bracing for January. More than 1,100 trucks bound for UK car plants cross into the United Kingdom from Europe every day, according to the Society of Motor Manufacturers and Traders (SMMT).
It said that delays to the arrival of components at production plants are measured in minutes and cost more than £70 million ($94 million) a day in gross value added to the industry.
Still, the biggest threat is a no-deal Brexit. Nissan, for example, has warned of possible dire consequences for its UK operations in the absence of a UK-EU trade deal.
A no-deal scenario could cost British carmakers £47 billion ($62.4 billion) in lost trade over the next five years, according to SMMT.