Belfast Bombardier boss: No-deal Brexit could cost us Â£30m
Stockpiling parts to mitigate the impact of a no-deal Brexit would cost Bombardier's Belfast business up to Â£30 million, the plane maker has warned.
Michael Ryan, the head of the firm’s Northern Ireland operation, warned that spending such a sum to store goods is “not how we can afford to run a business” and is “cash that I don’t have”.
There are fears that the movement of goods could be disrupted by long queues at ports if the UK is unable to reach an agreement with the European Union over Brexit.
Mr Ryan said his Belfast plant operates a “just in time” supply policy to avoid the expense of stocking excess materials.
The company uses hundreds of components which are modified throughout its supply chain, crossing between the UK and the rest of the EU on multiple occasions.
There were 1,755 such shipments in 2016.
Asked about the implications of a no-deal Brexit, Mr Ryan told the Press Association: “Our customers are expecting of us ... the only solution to not having some sort of a deal will be to stockpile parts.
“That will cost us about £25-30 million to hold a number of months’ worth of material to avoid stopping our lines.
“That’s money that should be being put into new product development, R and D (research and development), to allow us to keep doing business in the future, instead of managing a consequence or an uncertainty or frankly a lack of agreement.
“It’s cash that I don’t have.”
Around 4,000 people are employed at Bombardier’s Belfast operation.
The factory makes wings for the Airbus A220, which was known as the CSeries until Airbus took a majority stake in the aircraft programme amid concerns about the model’s feasibility.
Bombardier is in the middle of a five-year turnaround plan to improve its finances.
“What we do not have is another £25-30 million to be sitting in a store somewhere either managing an issue which has happened or because we weren’t able to get clarity on what might happen,” Mr Ryan said.
“That’s not how we can afford to run a business.”
Mr Ryan said the firm will begin arrangements to stockpile goods by the end of the year if it believes that will be necessary after Brexit in March next year.
He believes such a scenario would be a “short-term issue”, adding: “I don’t expect it to destroy our future going forward.”
Meanwhile, former Cabinet minister Priti Patel said Theresa ay must ditch the Chequers plan, which would see a “common rulebook” for goods with the EU – effectively tying the UK to terms set by Brussels.
Writing for the Telegraph website she said it did not meet the result of the referendum and “will leave us half-in and half-out, still bound to EU regulations and constraints”.
Calling for a looser free trade deal with the EU she said the change would take “political courage, the kind of courage that appears to have been lacking over the past two years”.
Labour former cabinet minister Lord Blunkett used a Sunday Telegraph article to reject claims that people who voted to Leave over immigration concerns were “racist” and said the result would be the same if there was another referendum.
He argued that “people believed our democracy and political system did not reflect their concerns and their cry for help” following the impact of the financial crash and austerity, in many places hitting communities still coping with the aftermath of deindustrialisation.
“To understand this, and why, if there were to be a second referendum now, I believe that the majority would still vote to leave, is critical if we are to get our democratic system back on track,” he said.