Free movement of trade
David Hutchins
Business Performance Improvement. Mentor. Author. Course creator, Consultant. Presenter
Those arguing either way on the question of the UK remaining in the EU frequently refer to the proportion of trade that the UK does with the EU compared with the rest of the world. Using this statistic is to completely miss the point. If this trade was simply made up of commodities such as butter, vegetables, or any other product where it is completely manufactured in a single country or trade area outside the EU these arguments might be valid but unfortunately this is not the case.
Within the mix are a number of products where the parts supply chain is almost impossibly complex and which can take some 30 years or so to set up. Also proximity is important. Let me explain in simple terms. A car or aircraft is made up of tens of thousands of components many of which have very highly specialised manufacturers. Car and Jet engines etc. There are very few plants in the world that specialise in these capital intensive products and even these have a huge number of sub assembly suppliers equally specialised. Years of development go into their products. You cannot simply switch from one to the others by the click of your fingers but this is not even the biggest aspect of the problem. Let me illustrate. In 1979 I visited Nissan, Honda and Toyota Plants in Japan. In each case, there were several different models being assembled on the same production lines. Something which at that time would have been thought impossible in the West. In contrast, in the West, there would only be one product being assembled on a dedicated line. If the Western plants decided to switch models the minimum time that it would have taken would have been at least a shift to switch over and recommence production. In Japan they could do it in the blink of an eye, almost instantaneously. Not only that, all of the component suppliers and sub assembly suppliers to the Japanese plants would manufacture their products in the same sequence and at the same time of delivery without interruption and even seconds count, as would be required on the assembly line of the Vehicle manufacturer. Some 20000 different components all arriving at the assembly line withing minutes of being required! No stocks of part finished parts or sub assemblies anywhere from Engines right through to spark plugs. Never mind the horrendous thought of 'lorry parks on the M20'! It has taken the West over 30 years to catch up with that, and the supply chains are EU wide for French, German and British manufacture alike. A wrong deal with the EU would smash that fragile process overnight. Once broken, it would take years to replace. In the meantime those manufacturers outside the EU would have a huge advantage and it is almost a certainty that the UK/EU manufacturers would fail not being able to catch up their lost advantage. We are not playing games here. Whole economies are at stake. It is all very well repeating trite slogans such as 'this is what we voted for' but I do not think any voted with the intention of committing suicide which is what will happen - seriously, this is reality!
Strategy, knowledge and project management, communities of practice
6 年What a great post, David. I am increasingly open mouthed as I watch this slow motion car crash and the complete, apparently wilful, failure of politics to avert some of the greatest risks to our economy and our society for a generation.
Director AJM Engineering Management
6 年I share your concerns, anything that makes cooperation more difficult will have consequences, I fear that those EU companies manufacturing in the UK have a duty to support EU manufacturing and as what has happened previously, ( Alstom power getting rid of UK engineering in 2003) manufacturing in the UK will be the collateral damage. For the EU to survive us leaving there has to be some kick back- this will not be the easy ride many are claiming it will be