Rolls Royce warns Brexit will cause supply chain kinks

(Reuters) Rolls-Royce Holdings worries border checks after Britain leaves the European Union will disrupt its global supply chain and is looking at measures to offset the rise in national protectionism that it represents, a member of its executive leadership said on Wednesday.

Speaking at the launch of a new partnership with Indian software firm Tata Consultancy Services, the enginemaker’s head of strategy and marketing Ben Story laid out a range of concerns over the Brexit process for one of Britain’s highest profile industrial exporters.

“We are worried about border checks and whether that will make our supply chain flow less fluidly,” Story, formerly head of Citibank’s UK Investment Banking and Broking unit, told Reuters.

“We are worried about the talent and making sure that we always get the right talent. We also work very closely with European universities and we worry that may break down and some of the research funding may fall away. We worry about regulations.”

Slow progress in the talks has unsettled businesses

Business leaders told Prime Minister Theresa May on Monday that she needs to speed up negotiations with the European Union amid concern that Britain will crash out of the world’s biggest trading bloc in 2019 without a deal.

Slow progress in the talks with Brussels has unsettled businesses and drawn warnings that unless a transition is agreed soon, some may begin activating Brexit contingency plans that may include moving out of the country.

“We built our whole supply chain assuming a kind of a globalising world and an open world,” Story said.

“What Brexit has made us do is ... step back and think about that a little more. Going forward we need to be thoughtful and careful about where we make investments, where we build capabilities, how to build in redundancy.”

Story said the engineering major has “a lot of flexibility and choice” as it has manufacturing facilities outside Britain, in Germany and Singapore among others.