Tata Motors has said in case of a “no deal Brexit” JLR will have two to three weeks of plants shutdown in the UK, while its British arm’s profitability will be adversely impacted in the long term.
As part of its preparations for a ‘no deal Brexit’, JLR said in an investor presentation that in the long term the company will have to reassess its manufacturing and sourcing strategy to overcome hurdles.
In the short term, Tata Motors said delays at ports could disrupt import of components into the UK for manufacturing as well as export of finished vehicles.
In order to overcome such a scenario, JLR have “factory downtime” under which it will pull forward five scheduled Easter Holiday beginning April 15 with an additional five days of additional plant downtime from April 8-12.
The company further said it plans to have sufficient buffer stock to minimise potential disruption due to plant shutdown expected in the first week of April.
JLR has also put in place a comprehensive cross-functional Brexit governance programme to minimise impact of a ‘no deal’ Brexit, wherever possible, the presentation said.
Commenting on the move, Tata Motors Group CFO PB Balaji said, “We also need to prepare for a scenario where there could be disruptions. So, we are preparing ourselves by first accelerating or moving ahead some of the Easter breaks and the way we schedule production, so that we are able to keep our factories running as much as possible”.
Stating that it is not physically possible to stock up raw materials and keep production going, he said, “Therefore we are going to have a shutdown from the end of first week of April. We will have two and half to three weeks of production shutdown”.