Richard Gane featured recently in a report aired on BBC2’s Newsnight about the effect Brexit could have on the UK’s automotive industry.
The film, which was prepared by BBC TV presenter, Naga Munchetty, started out at a component manufacturer based in Shropshire, called Grainger & Worrall. A leading manufacturer of high-integrity castings, this family-owned business makes cylinder heads and large engine parts for high-end marques including Bentley, Porsche and Aston Martin.
Edward Grainger, director and co-founder of Grainger & Worrall, said: “We are operating in a very competitive sector, where quality and reliability are essential. To stay competitive, we have invested in 3D printing technology to strengthen our production capabilities and give us extra flexibility in terms of capacity.
“We know that Brexit is going to have a negative impact on some elements of our business – in particular, losing zero-tariff access to the single market is likely to bring extra costs and could cause delays. However, our exports to the continent are currently benefiting from exchange rates so there is an upside too. We already have a strong supply base in the UK, which means we are protected from some Brexit effects, but we must be ready for potential supply chain disruption.”
Richard Gane added: “The biggest threat posed by Brexit is uncertainty about future trading relationships. Tariffs are likely to be introduced, which will apply extra cost each time components cross the channel and when you bear in mind that a number of crossings are sometimes necessary, these costs could quickly mount up.
“Even without individual trading agreements, the default World Trade Organisation (WTO) tariff of 10% would apply considerable cost pressure to UK-based component manufacturers trading in Europe. Depending on where they are sourcing most of their raw materials, some UK-based suppliers may need to appoint dual suppliers based in the UK or consider changing the footprint of their organisation more fundamentally - by holding stock in an EU country for example or increasing automation to cut costs in other ways.”
Watch this edition of Newsnight here.
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