Toyota Motor Corp. anticipates halting production at its Midlands U.K. factory in the event Britain leaves the European Union without a deal, the plants managing director, Marvin Cooke, told the BBC.
The Japanese company operates the Burnaston car plant that produced 150,000 vehicles last year, with about 90 percent of the units shipped to the EU, while components come the other way, the BBC reported. The factory has 2,500 employees, according to the company’s website.
“My view is that if Britain crashes out of the EU at the end of March, we will see production stops in our factory,’ Cooke, head of the plant that makes the Auris and Avensis cars, said in an interview with the BBC posted on its website. “It could be hours, days, weeks — even months.”
Responding to Toyota’s warning, British Business Secretary Greg Clark said Saturday there are grounds for optimism that Britain will strike a Brexit deal with the European Union.
“Of course we want a deal,” Clark told BBC radio. “No one should be under any illusion that the prime minister and our negotiating team are absolutely determined … . There are grounds for optimism that we can reach an agreement on this,” he added.
U.K. businesses are getting increasingly skittish about the prospects of a no-deal Brexit, with less than 200 days until the country is set to leave.
Manufacturers from Siemens Gamesa Renewable Energy SA to BMW AG have warned about production disruptions if the U.K. leaves without an agreement. The British Chambers of Commerce warned Friday that most businesses have yet to carry out a risk assessment on the impact of Brexit.
Toyota’s warning comes as the ruling Conservative Party’s annual conference is about to start. The party fault-line on how best to deliver Brexit was further highlighted Saturday when former Foreign Secretary Boris Johnson set out his own Brexit plan while condemning Prime Minister Theresa May’s own vision.May’s proposal was rejected by European leaders earlier in September, forcing her to come up with a new Brexit plan that both the EU and the warring factions in her party can accept.
Earlier this week other carmakers in Britain, including BMW, McLaren and Honda, said they had triggered some Brexit contingency plans such as certifying models in the EU, and are working on redrawing production schedules and stockpiling more parts.
The moves aim to ensure plants, which rely on the just-in-time delivery system for tens of thousands of components, can keep operating after Brexit. Still, the changes could add costs and bureaucracy which could risk the long-term viability of the plants.
Jaguar Land Rover, Britain’s biggest carmaker, has warned it does not know whether its plants will be able to operate in six months’ time and that the wrong Brexit deal could cost thousands of car jobs.