Aston Martin is drawing up different scenarios concerning EU suppliers to deal with the fallout from the Brexit vote.
Richard Jesson, purchasing director at Aston Martin Lagonda, said it was important to have a strategic plan in the face of currency fluctuations, a weak pound and the potential for tariff barriers between the UK and the EU.
Speaking at the CIPS Annual Conference in London Jesson said: “Stay calm. Procurement is about changing to the environment and being able to adjust. There’s a lot of talk about tariffs and the market but we don’t really know yet.
“Have a strategic plan. We have bumps in the road but it’s down to each business to understand what’s going on and how it affects their business.
“We sell a lot of cars in the US, UK and Middle East. It’s helping us having a softening pound.”
Jesson said the possibility of tariffs on trade with the EU, which CIPS economist John Glen said would be 10% for the automotive sector, was his biggest concern.
“We have a preponderance of UK suppliers which is good,” said Jesson. “The tariff uncertainty is what concerns me most.”
During a panel discussion on dealing with Brexit uncertainty, Jesson said the situation could promote discussions with suppliers and build stronger relationships. “We want the best suppliers, the most competitive suppliers. It opens up more of the discussions we are always having. I think Brexit has brought it to the surface. Creating long-term relationships is the biggest opportunity.”
CIPS president Richard Masser said it was important for buyers not to get dragged into focusing on cost rather than value. “There is an opportunity for procurement to demonstrate the value add,” he said.
Jan Fokke Van Den Bosch, CPO at HSBC, said the uncertainty around Brexit was no different to previous political upheavals such as the Cold War, terrorist attacks in the 1970s and the Scandinavian banking crisis in the 1980s and 1990s. “Uncertainty will be there forever,” he said. “I assume most companies are preparing analyses for a good scenario or a bad scenario.”
He said he was concerned was movement of people. “We tend to move people around quite frequently. Getting through barriers and into the UK and other countries, that is a big worry for me. That is the biggest challenge.”
Glen said he believed the importance of UK trade with the EU meant the result of the Brexit negotiations would be a Norway-style trade agreement, in which the UK pays into the EU and accepts free movement of people but with no political influence.
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