Brexit the economy and house prices part 6

Rinoa

Herzlos wrote: »

We do import almost as much from the rest of the world, that's never been in dispute. We also import lots of fruit and veg (though a lot of it is frozen or very refrigerated to increase transit life).



But neither of those is the problem or the solution. Lots of big British manufacturers rely on seamless transit of goods between the UK and the EU, and whilst they'll be able to adjust to handle it eventually, the uncertainty in the interim period will be devastating to them.
The cost to Nissan to handle the disruption to the supply chain will easily drive them onto the continent.



It's also worth noting that we've got customs staff and facilities to handle imports from the RoW in a reasonable time frame (I suspect most goods make it through in under 5 days). What we don't have, is the staff and facilities to do that with the EU stuff. If we put EU goods through with RoW we're doubling the workload but without doubling the workforce, or adding any additional capacity to any of the supply chain.

If you have the right paperwork customs clearance is just minutes. There are no queues on Motorways for ROW stuff. The whole process runs like clockwork. OK, so we need to hire more staff to do this with EU goods. I can't see that being a problem.

Herzlos

I agree that it's largely solvable by throwing enough staff at it. Are we doing that? Will they be ready if we hired them all tomorrow?


I don't agree it's as simple as just staff though; the paperwork for RoW hasn't changed in a long time so everyone exporting from RoW will be familiar with it and it'll be filled in correctly. That'll happen to with EU exporters to the UK (and visa versa), but until they've got up and are getting it all correct (remember it's hugely complicated) it's going to take a lot longer to pass through as it'll need more scrutiny and correction. That's of course not the UK's fault, but a natural consequence of such drastic changes to how things are done.

mayonnaise

Rejoice!

Theresa has just announced our first post-Brexit trade deal.

Covering economic powerhouses such as Botswana, Lesotho, Namibia, South Africa, Swaziland and Mozambique.

By the way...

The prime minister confirmed that Britain would replicate a deal the EU currently has with six southern African nations.

:doh:
https://www.independent.co.uk/news/uk/politics/theresa-may-uk-post-brexit-trade-deal-africa-visit-cape-town-leave-eu-a8510761.html

ukcarper

Perhaps somebody could explain the problem more clearly to me. BMW need to have part manufacturered in Germany that takes a day to get here now, if we leave without a deal it will take 2 days because of border checks. After the initial disruption will it make a significant difference.

Ballard

Rinoa wrote: »

Of course it matters. It means you aren't getting a true picture of how a no deal Brexit is going to affect EU companies.

If 20% of your business is with a country about to impose 10% tariffs on your products, that's going to punch a massive hole in your profits. Will German car manufacturers still want to uphold the so called 'integrity of the EU' when that reality draws closer? I'm not so sure.

You honestly think that these manufacturers are happy to keep quiet about their massive concerns until the last possible moment?

Herzlos

ukcarper wrote: »

Perhaps somebody could explain the problem more clearly to me. BMW need to have part manufacturered in Germany that takes a day to get here now, if we leave without a deal it will take 2 days because of border checks. After the initial disruption will it make a significant difference.

Yes. Where do you get the assertion that it'll only take 2 days now?


If the part only takes twice as long to turn up, they need to warehouse twice as much of it, correct?
The thousands of cars being built daily presumably also has thousands of parts each, correct?
So if you double (or worse) the warehousing requirements for each of those parts that cross, you're adding significant overhead, correct?


If a part fails to turn up, does BMW stop the whole line or do they find some way to send that partial car into storage to rejoin the queue when the part turns up?



You can reduce it to "one part will take an extra day, so it's no big deal" but you need to consider the bigger picture.


Once everything has settled down or we have a FTA in place, the problem goes away. That's always going to have been the case. But what happens in the interim weeks or months? How long do you think BMW will be happy to either have supply issues or just suspend operations for?

Herzlos

Rinoa wrote: »

Of course it matters. It means you aren't getting a true picture of how a no deal Brexit is going to affect EU companies.

If 20% of your business is with a country about to impose 10% tariffs on your products, that's going to punch a massive hole in your profits. Will German car manufacturers still want to uphold the so called 'integrity of the EU' when that reality draws closer? I'm not so sure.

Have you seen any hint that the German car manufacturers have been lying to everyone? They do have form, such as the emissions scandal. But then I remember a meeting with German businessmen from a few industries who were all (bar I think 1) completely nonplussed with the idea of the UK leaving and had no intention of jeapordizing the EU over us. I'd be more inclined to believe that than the Brexiteer consipracy.

ukcarper

Herzlos wrote: »

Yes. Where do you get the assertion that it'll only take 2 days now?


If the part only takes twice as long to turn up, they need to warehouse twice as much of it, correct?
The thousands of cars being built daily presumably also has thousands of parts each, correct?
So if you double (or worse) the warehousing requirements for each of those parts that cross, you're adding significant overhead, correct?


If a part fails to turn up, does BMW stop the whole line or do they find some way to send that partial car into storage to rejoin the queue when the part turns up?



You can reduce it to "one part will take an extra day, so it's no big deal" but you need to consider the bigger picture.


Once everything has settled down or we have a FTA in place, the problem goes away. That's always going to have been the case. But what happens in the interim weeks or months? How long do you think BMW will be happy to either have supply issues or just suspend operations for?

No it's the frequency of shipping that determines how much you hold in stock not the time it takes to ship.

I suspect they would not be happy with in initial disruption but thing would settle down fairly quickly and delays become constant. There will disruption initial and it will take to to establish new supply chains so it's down to what would be the cheapest.

Rinoa

Herzlos wrote: »

How long do you think BMW will be happy to either have supply issues or just suspend operations for?

If as you claim German car manufacturers are 'non-plussed' about a 'no deal' Brexit, then a few weeks teething problems with with JIT issues shouldn't worry them unduly.

Ballard

Rinoa wrote: »

If as you claim German car manufacturers are 'non-plussed' about a 'no deal' Brexit, then a few weeks teething problems with with JIT issues shouldn't worry them unduly.

No one has said that BMW et al don’t care. What has been said is that they value the EU deal that’s in place more than they value a potential one with the U.K. They’ve presumably done their sums and deduced that as painful as losing the fta with the U.K. will be their best option is to keep things as they will be.