BMW will make workers at its Mini plant in Oxford take unpaid leave for two weeks or more if a no-deal Brexit causes major disruption to its business.
The German carmaker is ready to close the Cowley factory for at least a fortnight from the 31 October Brexit deadline if BMW has problems importing components for vehicles, its chief financial officer Nicolas Peter said. The shutdown could stretch to more than three weeks, he added.
Cowley’s 4,500 workers would go unpaid because their holiday allowance was used up in April when BMW carried out a planned shutdown of the plant for a month after the original Brexit deadline of 29 March, Peter said.
“We are not capable of [having] a second holiday period in 2019 so this could have a financial impact on our colleagues working in Oxford,” Peter told the Financial Times at the Frankfurt motor show.
The carmaker will close the Cowley plant on 31 October and 1 November whether the UK leaves the EU with a deal or not. The break is needed to guard against disruption and minimise delays to deliveries for a business that is closely integrated with the EU.
BMW has warned that leaving the EU with no deal may force it to stop making the Mini at Cowley, endangering workers’ jobs and more than 100 years of carmaking at the site. The company also makes Minis in the Netherlands and Peter said the company would use production cuts as a “first step” to manage a no-deal Brexit.
Also at Frankfurt, Carlos Tavares, chief executive of Vauxhall’s owner PSA, said that leaving with no deal was unacceptable and called on the UK to find a compromise to avoid crashing out.
“Sending two trains to crash at full speed into each other just to demonstrate the strength of your muscles doesn’t seem to be the best approach,” Tavares said.
He said PSA would have to protect the rest of the company under no deal and that he would take “all the necessary decisions” at its Ellesmere Port plant, the FT reported. Tavares warned in July that PSA could scrap production at the factory if it becomes unprofitable after Brexit.
Investment in Britain’s car industry has ground to a halt as a hard Brexit has loomed. The amount pledged for new investments in the first half of 2019 was £90m compared with between £2.5bn and £2.7bn a year before the Brexit vote.