Bombardier warns no-deal Brexit could cost up to £30m in stockpiling parts
Michael Ryan, head of the firm’s Northern Ireland operation, warned spending such a sum to store goods is ‘not how we can afford to run a business’.
Stockpiling parts to mitigate the impact of a no-deal Brexit would cost Bombardier’s Belfast business up to £30 million, the plane maker has warned.
Michael Ryan, the head of the firm’s Northern Ireland operation, warned that spending such a sum to store goods is “not how we can afford to run a business” and is “cash that I don’t have”.
There are fears that the movement of goods could be disrupted by long queues at ports if the UK is unable to reach an agreement with the European Union over Brexit.
Mr Ryan said his Belfast plant operates a “just in time” supply policy to avoid the expense of stocking excess materials.
The company uses hundreds of components which are modified throughout its supply chain, crossing between the UK and the rest of the EU on multiple occasions.
There were 1,755 such shipments in 2016.
That will cost us about £25-30 million to hold a number of months' worth of material to avoid stopping our lines Michael Ryan, Bombardier
Asked about the implications of a no-deal Brexit, Mr Ryan told the Press Association: “Our customers are expecting of us … the only solution to not having some sort of a deal will be to stockpile parts.
“That will cost us about £25-30 million to hold a number of months’ worth of material to avoid stopping our lines.
“That’s money that should be being put into new product development, R and D (research and development), to allow us to keep doing business in the future, instead of managing a consequence or an uncertainty or frankly a lack of agreement.
“It’s cash that I don’t have.”
Around 4,000 people are employed at Bombardier’s Belfast operation.
The factory makes wings for the Airbus A220, which was known as the CSeries until Airbus took a majority stake in the aircraft programme amid concerns about the model’s feasibility.
Bombardier is in the middle of a five-year turnaround plan to improve its finances.
“What we do not have is another £25-30 million to be sitting in a store somewhere either managing an issue which has happened or because we weren’t able to get clarity on what might happen,” Mr Ryan said.
“That’s not how we can afford to run a business.”
Mr Ryan said the firm will begin arrangements to stockpile goods by the end of the year if it believes that will be necessary after Brexit in March next year.
He believes such a scenario would be a “short-term issue”, adding: “I don’t expect it to destroy our future going forward.”