May 12, 2016 / 2:51 PM / 3 years ago

BMW's CEO says too early for a Brexit contingency plan

MUNICH (Reuters) - BMW’s (BMWG.DE) chief executive said on Thursday it was too early to plan for possible changes affecting the company’s British carmakers Mini and Rolls-Royce if Britons vote in the national referendum on June 23 to leave the European Union.

Harald Krueger, Chief Executive of German luxury carmaker BMW addresses a news conference in Munich, southern Germany, March 16, 2016. REUTERS/Michael Dalder

“There is no point in speculating about a plan B,” Harald Krueger told the company’s annual meeting in Munich.

Should Britain choose to leave the European Union, BMW will use the ensuing two-year transition period, to decide what to do next, Krueger said.

Ian Robertson, BMW’s board member in charge of sales and a former head of Rolls-Royce, told Reuters that he would prefer it if Britain remained in the European Union but also said that the company had not drawn up contingency plans.

“There is no Plan B. I’m doing my part to support the ‘stay’ campaign,” he said on the sidelines of the meeting.

A departure from the European Union would not be good, because of the long-term uncertainty about work permits for European Union citizens working in the United Kingdom, as well as for Britons working in continental Europe.

At the Mini factory in Oxford where 4,500 staff work, there are 70 nationalities. And in Goodwood, southern England, where Rolls-Royce cars are made, the 1,600 staff come from 30 different nations, BMW said.

BMW declined to comment on whether it would shift more production of Mini vehicles to continental Europe, where production in limited numbers takes place in the Netherlands and Austria.

VDL Nedcar, the Netherlands-based contract manufacturer also declined to comment on whether it stands to gain business from a Brexit.

Joost Govaarts, director of VDL Nedcar, said the contract manufacturer’s future depended primarily on whether they were a competitive factory to make cars.

“We have our own production know-how and philosophy which includes the experience of working for a number of carmakers including Volvo (0175.HK), Mitsubishi (7211.T) and Daimler (DAIGn.DE).”

Because VDL has press, paint and body shops in addition to the production line, many tasks can be completed locally. “We can save transportation and packing costs by pressing parts in-house,” Govaarts explained.

“At the end of the day it is related to the total business case and the total cost of producing a car. Logistics costs will be taken into account.”

On being asked whether political uncertainty such as Brexit, currency swings as well as some volatility in demand were factors that could help contract manufacturers like VDL Nedcar win business, Govaarts said, “We are confident about our growth perspective, whether it is related to BMW or the possibility of acquiring new customers.”

Reporting by Edward Taylor and Irene Preisinger; Editing by Greg Mahlich

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below