Without necessarily concluding that “cars today are almost the exact equivalent of the great Gothic cathedrals”,* the automotive sector nevertheless frequently provides an accurate reflection a nation’s adventures and industrial performance. For example, the names of iconic models produced by Rolls-Royce and Bentley, including Phantom, Ghost and Continental, could be considered as premonitory, anticipating the advent of Brexit on March 29, 2019…
Two years ago on June 23, 2016, 51.9% of Her Majesty’s subjects voted to withdraw the United Kingdom from the European Union. With less than nine months to go before the fateful date, precious few questions have been resolved, creating a lack of visibility that Stephan Freismuth, customs manager at BMW, summarises with regard to production of Rolls-Royce automobiles: “If at the end of the day the supply chain has a stop at the border, then we cannot produce our products in the UK”.
Already in 1998, Britain was forced to swallow a bitter pill, watching as its industrial crown jewels moved to Saxony, as the brand known for the famous “Spirit of Ecstasy” statuette atop its Greek temple grille had become a subsidiary of BMW, while Bentley passed into the fold of Volkswagen.
Today, the scenario has grown even more extreme, for future Rolls-Royce automobiles may well be produced on the continent. The decision is not political but rather based entirely on pragmatic considerations: 90% of components used at the Rolls-Royce factory in Goodwood, located 200 km from the Channel Tunnel exit, are sourced from continental Europe. The same goes for BMW’s Hams Hall site near Birmingham, which manufactures one 3- or 4-cylinder gasoline engine every minute, destined for use throughout the carmaker’s network.
Honda provides another example of the impending challenges. Its two warehouses nearby Swindon manage 2 million spare parts intended for the assembly lines of its sole European production site. It takes between five and 24 hours for supplies sourced from the continent to reach the warehouses. Based on its experience dealing with US customs and the epic traffic jams at the Channel Tunnel exit, the Japan-based carmaker is considering maritime transportation for its spare parts. This would mean storing supplies equivalent to nine days of production, requiring 300,000 m² of storage space, i.e. nearly the surface area of Tesla’s California factory, and three times the size of Amazon’s largest US warehouses…
Indeed, Brexit and “just in time” will be at odds if no customs agreement is reached. This risk threatens the UK automotive industry as a whole, a vital sector for the national economy, having generated sales of €93 billion in 2017 (1.1% of GDP, 9% of added value).
With the Trump administration threatening to impose tariffs on European cars, the industry is in dire need of visibility as to Brexit conditions. Rolls-Royce was rescued by way of nationalisation in 1971, before being taken over by BMW in 1998. Will this showpiece of 1930s British flamboyance finally become the emblem of an ultimately triumphant European Union?
* Mythologies, Roland Barthes, Noonday, 1972
Didier Le Menestrel
With the complicity of Olivier de Berranger