Brexit may disaster for Rolls-Royce

The very word Brexit is same as the word Grexit, it is a combination of “Britain + Exit” which is a word used to describe Britain leaving European Union (EU). On 23rd June 2016 an election was held for people to vote for or against “UK leaving EU” and with more than 30 million people voting the “For” side won with 51.9%. To 48.1%. As per procedures, both sides got 2 years to decide the terms of split which is going to end in 71 days on 29 March 2019.

Well, it’s simply UK leaving EU so what does it have to do with private companies like Rolls-Royce? It actually will make a big difference for some multi-billionaire companies. The European Union is actually an economic and political deal between 28 countries under one moto that countries which trade together should never fight with each other. In the year 1992, when the European single market was completed, the EU became a like big country with other countries being its states which allowed the free movement of goods, services, money and people within the European Union.

But now, UK getting out of this Union will make it an independent country i.e. in order to do trade with any other country in the EU they must follow all the custom rules and regulations. Rolls-Royce being one of the biggest manufacturers in Britain, a company that imports 32,000 different parts form 600 global suppliers will not only face with delay problems, it will also increase the prices and the traffic. Out of those 32,000 parts if you miss even one, manufacturing a car will be a big problem for the Rolls-Royce

Just like the Rolls-Royce other manufacturers like Jaguar, Aston Martin and Airbus are facing problems but unlike the Jag they are not ready to leave Britain at all. Well, Jaguar being a gentleman has already warned the government about the loss of about 10,000 jobs. On the other hand both the Rolls-Royce and the Airbus are not ready to move an inch and they have their own valid reasons.

As per the Mueller-Oetvoes, Rolls-Royce is a company committed to Britain and one third of their customers travel to Goodwood to get their dream car and watch them being hand built. The same way Airbus denies to leave the place because leaving UK means losing several skilled hands and master workers who have dedicated years for the company, other than that Airbus is one of those manufacturers that relies on open border to keep the production going which makes Brexit a nightmare for them.

But, as Brexit looking totally inevitable, these manufactures are forced to consider other options along with negotiating with the government. Rolls-Royce has already started training new Import procedures to the suppliers along with stock piling as much as possible but for assembly line that works 24x7 stockpiling is not going to be enough which also forced them to put a halt for the first 2-weeks of April.

With things going only downwards either way, their only hope is the Brexit negotiation as Tom Enders, CEO of Airbus SE plead to the government to allow for an orderly agreed Brexit and find an agreement with Brussels. In other words, for now the fate of Rolls-Royce lies in the Very hand of the negotiators.


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