Toyota has said a no-deal Brexit would put production of £10m worth of cars a day at risk as it urged MPs to ratify Theresa May’s deal next week.
The deputy managing director of the Japanese car manufacturer said business could not understand why the UK should “go back to square one” in negotiations just because the deal was not perfect.
Giving evidence to a parliamentary select committee, Tony Walker said disruption to its supply chain as a result of the UK crashing out of the EU would put its Deeside and Burnaston plants on “stop-start” production for weeks or months, putting jobs and wages in jeopardy.
He told the business select committee the issue was not only that Toyota had truckloads of parts dispatched daily across the Dover-Calais route, but that they came over the Channel in a specific order tied to the production sequence.
“We do not just have the 50 trucks, we have to have them in sequence, it is no good if we have 49 trucks and truck 17 is missing,” he said. “[Production] will then stop. So without the withdrawal agreement and withdrawing with a no deal, we would have stop-start production for weeks, possibly months. It would be very, very difficult for us to cope with.
“The value of the cars we make is £10m a day. If we lose that sort of value it’s very, very challenging for us.”
Toyota came to Britain 30 years ago at the invitation of Margaret Thatcher, he told MPs. He said Japanese businesses were “disappointed” with Brexit because the former prime minister had persuaded them to set up in the UK as their European hub. “[She said] come to the UK because this is the place you can build cars as part of the EU and you can export to the EU.”
Walker told the committee the company had to stop production several times during the disruptions on the Dover-Calais route in 2015.
“We had considerable trouble. It took us about two months to get back where we should have been because of trucks out of sequence. We had a huge buildup in parts, they were on trailers – we have no warehouses,” Walker said.
He also revealed for the first time publicly that less than 20% of car parts the company used were British. This would present a problem under any future trade arrangements with Britain because most trade deals around the world require 50% of a product to originate from the country of import, he said.
Walker called on MPs to support the deal in the parliamentary vote next Tuesday and said it was baffling why some in government thought the deal May had got should be abandoned.
“To say it’s not perfect, so we should go back to square one, is not understandable to businesspeople,” he said. “We would rather have certainty than uncertainty. We think the deal should be ratified.”
Sydney Nash, a senior policy manager at the car industry organisation the Society of Motor Manufacturers and Traders, told the committee the car industry relied on 1,100 trucks crossing the Channel every day. “Our ambition is frictionless trade and that’s what we need to be working towards,” Nash said.
Walker said the phrase “rule-takers” – used by some who are opposed to May’s deal to describe what the UK’s position would be if it was ratified – was “a very, very political expression”.
He told MPs rules were not a bad thing. “We have had no difficulty in Toyota or the wider car industry being innovative or being compliant with EU regulation in the past and no reason to think we would have difficulty in the future either,” he said.
“Does EU regulation stifle innovation? I really don’t think so, look at the Germany car industry, there’s hardly a more innovative car industry.”
He added: “We strongly ask that the transition period doesn’t become the negotiation period and we would strongly ask that we don’t end up three, four months to go, a bit like this time, with another cliff edge with a very short time to implement.”
