Brexit, then. The current Brexit barometer in the industry at today’s Frankfurt motor show is one of exasperation. Cheeks get puffed, shoulders shrugged, ‘you know as much as me’ often volleyed back over the net at the mere mention of the 'B' word when chatting with any car executive.
Whatever the outcome, a man more affected than most in the industry will be Jaguar Land Rover CEO Ralf Speth, who had a calm, articulate dissection of the current state of play on what it means for the UK's largest car maker.
“No one can give you an answer,” he said at today’s Frankfurt show. “And if they can, it will last two minutes before there will be another terms and conditions sheet.
“It’s difficult to make a judgement. I cannot predict the future. You can listen to the political statements and form different judgements even from that.
“I have 20-25 million car parts a day that need to be moved through our factories. I need them all just-in-time to be able to build a car. If I miss a part, the car isn’t built. There is no car.
“If there is a delay at the ports of one minute, two minutes, 10 minutes, or whatever - what happens? There’s talk of setting up warehouses to store these parts. Where am I going to store 20 million parts a day?
“You need logistics on top of that also. You need special deliveries to transport it. No suppliers are going to be able to support that. You’ll need new warehouses, new IT systems. It’s not possible on capital, IT or infrastructure.
“I’ve already hired 40 extra people for admin. They’re all administrators. Take the costs of these people: would they not be better creating products for the future, to make a stronger UK plc, rather than admin and filling in forms?”
Read more
Jaguar Land Rover boss: settling Brexit will be good for us
Jaguar Land Rover receives £500m government loan guarantee for EV production
UK car manufacturing falls by fifth in first half of 2019
Join the debate
Add your comment
Ralf should visit Japan...
Makes me wonder how Japan manages to build cars seeings how they aren't in the European Union.
You can run JIT from China
Yes you can, but it would need an in-uk buffer stock to cover supply fluctation and lead time variation. This means as the the car plant is running JIT the supplier is covering the cost, shipping @ 6 weeks, storage close to destination say 4 weeks production, plus warehouse cost, import duties and extra admin. Oh and lets add currency fluctuation. It puts a large burden on the supplier.
This is why when I hear people say we can trade more with the rest of the world I say yes, but please understand the futher away they get, and the lower the wages in their economy, the harder it is for ther UK to compete. Unless we are going for dropping the UK wages much more, which is part of ther Leave strategy as I understand it.
Careful what you ask for.
Lucky JLR doesn't rely on any parts from China
China is outside of the EU, so if JLR used any Chinese parts, just-in-time manufacturing would be impossible.