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Rolls-Royce factory, Derby

Rolls-Royce might stockpile parts in preparation for Brexit

Image credit: PA

Rolls-Royce could start stockpiling parts in preparation for possibly difficult trading arrangements in the event of a hard Brexit according to a Reuters report.

Warren East, the CEO of the UK engine-maker, reportedly expressed frustration with the lack of clarity over the UK’s future trading arrangement with the EU while speaking at the Farnborough Airshow.

Just prior to the Brexit vote in 2016 East urged his employees to back the remain side, arguing that the aerospace and industrial power engineering group is better off in the EU. 

While Britain is set to leave the EU in less than nine months, the government is still fighting over the exact nature of the exit.

Companies based in the UK such as Rolls-Royce and other manufacturers rely on the smooth flow of goods and parts across borders with the EU, something that could be disrupted depending on the nature of the UK’s agreements with the worlds’ biggest trading block.

Asked by reporters at the Farnborough Airshow whether contingency plans meant Rolls-Royce had needed to stockpile parts, East said: “Not yet, but we might have to.”

Prime Minister Theresa May is currently fighting to get parliamentary approval for her white paper policy document, which lays down a blueprint for the kind of deal that she wants the UK to get from the EU.

East said the white paper had been “incrementally positive”, but there were still many unknown factors, and that a vote in the lower house of Parliament on Monday represented a step back.

“It was very frustrating that having done a few interviews yesterday and talked about how incrementally positive it was, at least half of it was undone,” East said. “We can’t rely on anything,” he added.

East’s comments follow similar sentiments from Jaguar Land Rover which warned earlier this month that a hard Brexit could force the company to reconsider its continued investment in the UK and even close its UK factories.

Airbus also warned in June that it could pull out of the UK entirely in the event of a “no deal” result threatening the jobs of 14,000 people. 

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