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PRIVACY
Manufacturing

Comment: Planes, trains and automobiles: What does Brexit mean for the West Midlands transport manufacturing sector?

In this joint blog, professors Alex de Ruyter and David Bailey assess the possible ramifications of a no-deal Brexit on the West Midlands automotive sector

What impact will a no-deal Brexit have on the West Midlands' transport sector?

Much has rightly been made of the contribution of the transport manufacturing sector to the West Midlands' economy - particularly that of the automotive.

These sectors are especially vulnerable to the form of Brexit, with concerns in automotive in particular, as to how a no-deal scenario would lead to tariff barriers, customs delays affecting supply chains, the need to stockpile parts and so on.

Essentially, customs delays under a no-deal Brexit would throw a spanner in the works of just-in-time systems commonly used across º£½ÇÊÓÆµ and EU manufacturing.

Because of such fears, car makers like Jaguar Land Rover (JLR) are planning plant shut downs in November. It is the second time this year that car firms will have to shut down because of Brexit uncertainty.

In April, much of the º£½ÇÊÓÆµ car industry was idled in anticipation of the original end of March Brexit deadline.

Firms brought forward planned maintenance shutdowns and took extended breaks in an effort to mitigate the cost of disruption. Output fell by 45 per cent in April compared with a year earlier.

JLR estimates the cost of leaving the EU with no withdrawal agreement in place will cost it £1.2 billion. To put this in context, the º£½ÇÊÓÆµ Government has so far allocated about £4 billion in total to mitigate the costs of no deal.

And this is simply because our car, plane and train makers have gone about their business within a giant harmonised production and trading zone called the single market.