Daily Management Review

May's Draft Brexit Deal Is Better Than No Deal, Says Rolls-Royce Chief


11/19/2018




May's Draft Brexit Deal Is Better Than No Deal, Says Rolls-Royce Chief
The chief of engineering giant Rolls-Royce said that a "practical plan" for Brexit needs to be supported by politicians.
 
Any deal with the European Union was better than a no deal Brexit because time to strike a deal is running out, said Warren East, chief of Rolls-Royce.
 
Rolls-Royce makes aerospace, marine and submarine engines  and employs about 22,300 people in the UK.
 
The draft Brexit deal plan that was put forward by British Prime Minister Teresa May was backed by East as has been done by other business leaders.
 
"The time since the referendum seems to have gone remarkably quickly and we're essentially [still] having a discussion we could have had the morning after the referendum," he said in an interview to the media.
 
"We are slightly running out of time and I would, as a business leader, like to see politicians on both sides of the fence get on and negotiate a practical deal that works for business", he said.
 
Similar to a large number of engineering companies that operate in Britain, Rolls-Royce too has a robust supply chain in the EU region which operates in the so called "just-in-time" delivery mechanism supplying thousands of parts and dependent on its smooth functioning across the Channel.
 
A call for "as little change as possible" from Brexit for minimal impact on business was given earlier in the year by East. The company has taken up a strategy of stockpiling the necessary parts for its production to shield itself from any negative impact of Brexit which can hamper its ‘just-in-time’ supply chain and production system.
 
And to ensure that the company does keep operating even after March 29, 2019, it would continue with its strategy of purchasing and stockpiling of parts, he said.
 
May’s draft plan for Brexit was has been lend support by other business leaders of the country after a conference call between executives and the Chancellor, Philip Hammond, which was set up to garner industry support for the plan.
 
But the draft plan and the political uncertainty saw the pound being hit on Thursday because of fears among investors that the parliament would not back the draft Brexit plan of May. They were also spooked by a number of resignations of ministers which they believe could put the government at risk of falling down.
 
On the other hand, industry executives and CEOs have very little alternative but to get prepared for a number of post Brexit scenarios because of the uncertainty about the draft bill getting parliamentary approval and whether there would be any deal at all between the UK and the EU or whether there would be a general elections in the UK because of the current political upheaval.
 
The draft was termed as a "positive step in the right direction" by BMW but also said that its strategy of preparing itself for "the worst-case scenario, which is what a no-deal Brexit would represent" would continue.
 
"Most business people ultimately are pragmatists and this is about playing the cards we have been dealt rather than wishing for a better hand," Sir Roger Carr, chairman of BAE Systems, told the media.
 
(Source:www.bbc.com)






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