Alex Barker and Peter Campbell: Honda faces the real cost of Brexit in a former Spitfire plant: "Honda operates two cavernous warehouses.... They still only store enough kit to keep production of the Honda Civic rolling for 36 hours...
...This is the Japanese carmaker’s breathing space, and after a hard Brexit it might need to be bigger—much, much bigger. Proud managers describe 2m components “flowing like water” to the factory line every working day.... Honda now fears that the border checks that could be introduced as a result of Brexit will clog up the process. If Britain were to leave the customs union, Honda estimates European parts will take a minimum of two to three days to reach the plant, and possibly as long as nine days. Delivery times of finished cars may be just as unpredictable.... With nine months left before Britain’s exit and Westminster still undecided on the direction Brexit should take, the warnings are becoming increasingly blunt, and despairing. Airbus, BMW, Honda—blue-chip manufacturers in Britain are raising the alarm....
Honda exports about half its Swindon-made cars to the US—giving it just the kind of global outlook championed by Brexiters. “There is some opportunity,” says Justin Benson, head of UK automotive at KPMG. A weaker pound, he adds, could improve competitiveness and “see an upside for exports”.... Just 25 per cent of the Civic model is now “true UK content”.... The carmakers would never have developed these plant networks if they knew Britain planned to leave the EU’s customs union or single market. “I don’t think it’s feasible for the carmakers to carry on running the supply chains they currently do if that happens,” says Tim Lawrence, global head of manufacturing at the PA Consulting group. “It’s just not going to work.”...
Honda will soon be reviewing the plans for its next Civic model, which is due around 2021. In theory, it would be glad to source more parts from within the UK and Brexit provides an opportunity to do just that. But it would take years—perhaps even a decade—to shift more supply to the UK, even if the parts companies were willing. Mr Howells warns the UK supply base is “shallow” and more orders from Britain alone may not be a big enough incentive to deepen it...
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