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Aviation giants stockpiling parts over Brexit fears

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
An Airbus Assembly Plant in Toulouse.

Discussions over Britain’s departure from the European Union through a process internationally known as Brexit continues to send ripples across the business world as companies rush to enact various contingency plans in order to help mitigate negative consequences.

According to various media reports, European aircraft manufacturer Airbus has started stockpiling parts in preparation for the impending Brexit and possible border delays it may cause, with engine manufacturer Rolls-Royce set to follow suit.

Bloomberg in a report quoted Airbus CEO Tom Enders as saying that the company “needs to create an inventory buffer to insure against any shortages".  This is while Rolls-Royce CEO Warren East has emphasized that the company needed to decide by the end of the year whether to build up its own supply of parts, Bloomberg added.

The aircraft and engine manufacturing process requires the delivery of requisite components to factories "on a just-in-time basis," The Daily Express wrote in a report, and a possible no-deal or disorderly Brexit may disrupt the flow of said components across the border between the EU and the UK, as well as "prevent European regulatory approval for aerospace products".

David Stewart, aerospace partner at consultancy firm Oliver Wyman, noted, however, that “there's a limit to how much they [big companies] can do in terms of digging down”.

"There's a small company that does this piece of bearing, clip, pump. You can't go and check every one of those single companies to see how well prepared they are," he remarked.

Earlier, Airbus also announced that the company, which employs some 15,000 people in Britain, would invest elsewhere if the UK leaves the EU in 2019 without a deal.

Britain's exit from the EU is slated for March 29, 2019. A transition period, which will see the UK remain in the single market and customs union, is due to last until the end of 2020.

(Source: Sputnik news agency)



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