Dive Brief:
- BMW's Oxford factory, where the Mini is produced, will be closed for at least a month starting April 1, 2019 — the first working day after Brexit on March 29, reports The Independent. The closure is normally done in the summer.
- Citing supply chain concerns, BMW said closing the plant at that time will help minimize the risk of parts disruptions if Britain leaves the European Union without a withdrawal agreement.
- The automaker’s announcement follows on the heels of Airbus raising alarms about its future in the U.K.
Dive Insight:
Though the shock of Britain’s 2016 vote to leave the EU has worn off, other troubling concerns remain. While the U.K. and the EU have agreed to a 21-month transition period until the end of 2020, BMW and Airbus are hedging their bets in case a final withdrawal agreement is not reached.
German-based BMW, in a statement to numerous media outlets, said, "While we believe the worst-case scenario is an unlikely outcome, we have to plan for it."
The company has approximately 8,000 employees in the U.K., along with 14,000 in its retail network. According to its website, the company has invested about $2.6 billion in its U.K. operations, its fourth-largest sales market, since 2000. All three BMW Group brands — BMW, Mini and Rolls-Royce — are manufactured in the United Kingdom.
France-based Airbus, on the other hand, is making more serious noise, including withdrawing from the U.K. market completely, it said in a risk assessment published earlier this summer, saying the lack of a clear-cut Brexit withdrawal will force Airbus "to reconsider its investments in the UK, and its long-term footprint in the country, severely undermine UK efforts to keep a competitive and innovate aerospace industry, developing high-value jobs and competences."
An Airbus withdrawal would be no small thing. According to the assessment, Airbus has a workforce of 14,000 in the U.K., along with more than 100,000 related jobs. It says the company has brought $10.3 billion gross value to the U.K.’s GDP and has spent $7.89 billion with its U.K. suppliers.
In a statement accompanying the risk assessment, Tom Williams, COO of Airbus Commercial Aircraft, said, "We have sought to highlight our concerns over the past 12 months, without success. Far from 'project fear,' this is a dawning reality for Airbus. Put simply, a no-deal scenario directly threatens Airbus’ future in the UK."
