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Jaguar Land Rover to Close Plants for a Week as a Brexit Safeguard

The shutdown will go in effect even if Britain avoids a no-deal Brexit, and is intended to minimize disruption to Jaguar's supply chain.

Jaguar Land Rover plans to close its U.K. factories for a week in November to guard against disruption to supply chains from a possible no-deal Brexit, Chief Executive Officer Ralf Speth said.

The shutdown will go ahead whether or not Britain seeks an extension to the Oct. 31 deadline for leaving the European Union, he said at a briefing at JLR’s expanded technical center in Gaydon, England.

The temporary halt will mean lost production for the unit of Tata Motors Ltd., already impacted by a global slowdown in the car industry. JLR brought forward its usual August maintenance closure as part of preparations for the original March 29 Brexit date, a measure that proved to be in vain after the deadline was shifted to October.

“We have to close,” Speth said. “You cannot switch it on and off. I need to make commitments to my suppliers, I need to have every part available and I need it just in time. If I don’t have a part, I don’t produce a car.”

Prime Minister Boris Johnson has threatened to exit the EU without a deal if he’s unable to renegotiate current terms. U.K. carmakers have been campaigning against a no-deal split since the 2016 referendum. Speth’s comments follow a warning this week from more than 20 European trade groups that such a breakup would have an “immediate and devastating impact, undermining competitiveness and causing irreversible and severe damage.”

JLR uses about 20 million parts a day, many of them from mainland Europe, Speth said. Some forecasts predict a no-deal exit could cause transport snarl-ups at the U.K. border that would leave British carmakers unable to function for more than a few days.

Workers will still be paid during the shutdown and will come in to work to engage in non-production-related activities such as training.

The CEO said the opening of the expanded Gaydon site after 500 million pounds ($617 million) of investment demonstrates JLR’s long-term faith in the U.K. as a focus of auto manufacturing. The facility brings together engineering, procurement and design activities at a single location for the first time.

Among other automakers, Toyota Motor Corp. has said it will close its main European factory, near Derby, for one day on Nov. 1, a Friday, providing a three-day gap to the resumption of production the following Monday.

The Japanese company typically holds just 4 1/2 hours of inventory, though that will be temporarily increased to two days’ worth.

BMW AG plans to halt production at its Mini plant in Oxford for two days on Oct. 31, and said earlier this month it would reduce output by eliminating a work shift in the event of a no-deal split.

TAGS: Trade
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