‘A no-deal Brexit would be cat­a­strophic’ –As­ton Martin

Western Mail - - BUSINESS IN WALES - David Wil­liamson Po­lit­i­cal edi­tor david.wil­liamson@waleson­line.co.uk

AS­TON Martin’s chief fi­nan­cial of­fi­cer has warned that leav­ing the EU with­out a deal could prove “semi-cat­a­strophic” for the car man­u­fac­turer and force a tem­po­rary halt to pro­duc­tion.

Mark Wil­son left MPs in no doubt about the scale of con­cern in the in­dus­try.

As­ton Martin se­lected the Min­istry of De­fence’s St Athan site in the Vale of Glam­or­gan as the lo­ca­tion for its sec­ond UK man­u­fac­tur­ing plant. Ear­lier this year it stated it was on tar­get to start pro­duc­tion of its new cross­over, the As­ton Martin DBX, in 2019.

At present, cars ap­proved by the Ve­hi­cle Cer­ti­fi­ca­tion Agency (VCA) can be sold across the EU. If a deal is not agreed to al­low this ar­range­ment to con­tinue af­ter Brexit, car-mak­ers fear pro­duc­tion will have to stop un­til new cer­ti­fi­ca­tion to sell ve­hi­cles abroad is se­cured.

Ap­pear­ing be­fore the Busi­ness, En­ergy and In­dus­trial Strat­egy Com­mit­tee, Mr Wil­son set out his con­cerns.

He said: “[For] As­ton Martin it is far, far sim­pler than it is per­haps for Honda and some of the other larger in­ter­na­tional play­ers.

“We are a Bri­tish com­pany. We pro­duce our cars ex­clu­sively in Bri­tain and will con­tinue to do so, and with­out VCA-type ap­proval it re­ally is quite a stark pic­ture for us.”

He warned that if this type of ap­proval was not car­ried over, there would not only be “sig­nif­i­cant costs” but “the semi-cat­a­strophic ef­fects of hav­ing to stop pro­duc­tion be­cause we only pro­duce cars in the UK”.

Mr Wil­son also stressed the need for clar­ity so the com­pany could plan where to in­vest.

He said: “For As­ton Martin for ex­am­ple, we are on a fast growth tra­jec­tory at the mo­ment. That im­plies that we are in­vest­ing more heav­ily than we would in the nor­mal cy­cle.

“Typ­i­cally for us, our prod­uct cy­cle is seven years long. You would there­fore ex­pect to be in­vest­ing at least three years in ad­vance in new prod­uct cy­cles, and about 60% of our sup­ply chain is in the EU, with the bal­ance in the UK.

“And so, as we go through this ramp-up pe­riod now, de­cid­ing where we will in­vest in that sup­ply chain is crit­i­cal...

“Those de­ci­sions are hap­pen­ing ev­ery day, each day, and we are wait­ing to see what will be the out­come and there­fore clar­ity is ab­so­lutely at a premium for us.”

Stat­ing that it was “re­ally, re­ally im­por­tant” to get “clar­ity quickly,” he said: “It’s very dif­fi­cult to sce­nar­i­o­plan given an ex­tremely wide range of out­comes, some of which are bi­nary op­po­sites to each other.”

Mr Wil­son added the com­pany would face a “real prob­lem” if UK man­u­fac­tur­ers had to rely on World Trade Or­gan­i­sa­tion rules to trade but were also sad­dled with a strong pound.

He em­pha­sised the need for As­ton Martin to be able to re­cruit tal­ented work­ers from the EU, stat­ing: “About 10% of our work­force is Euro­pean. But it’s a very highly skilled work­force.

“These are top-class en­gi­neers, aero­dy­nam­i­cists, ve­hi­cle dy­nam­ics en­gi­neers – the skill level is high and we need to main­tain ac­cess to that tal­ent.”

How­ever, he said he was “en­cour­aged” by talks about tran­si­tional ar­range­ments.

Lib­eral Demo­crat Brexit spokesman Tom Brake said: “An ex­treme Brexit risks bring­ing parts of our thriv­ing car in­dus­try to a stand­still. Peo­ple’s jobs are on the line, but still the hard Brex­i­teers are ped­dling the fan­tasy that we could crash out of Europe with no deal.

“Ev­ery day of Gov­ern­ment com­pla­cency brings us closer to a cat­a­strophic Brexit that would de­stroy jobs, push up prices and dam­age liv­ing stan­dards.

“The Gov­ern­ment must stop be­ing so com­pla­cent and pro­tect Bri­tish busi­nesses by rul­ing out no deal.”

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