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What is a Brexit business plan? October 17, 2019

Posted by WorldbyStorm in Uncategorized.
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I ask the question because of this report on RTÉ that fully 41% of Irish businesses, that is those across the island, that ‘have no plan to deal with the fallout’. This is up 1% from three months ago.

And sentiment is bad. A third expect a hard border, and moreover:

Nearly three quarters of Irish companies are concerned about the future of their business and 86% foresee a negative impact for the wider economy.
The results show manufacturing and transport businesses are among the most negative, with many sectors in the Republic now at their most pessimistic since the index began.

Moreover expansion and investment plans have been curtailed or cancelled for many of them.

Yet what exactly can a company do to future proof itself in this context. Assume for example that it decides to acquire products or components from a non UK source. That may well incur greater costs. But what if there is a deal? If the new procedures are in place they may find themselves undercut by competitors who took the risk of not sourcing products or components from elsewhere and proceeding as ‘normal’. And that is just one small example of myriad factors that might come into play here. For example, I worked for some years for an electrical goods distributor that was Franco-German based. For years goods were imported from the continent to Dublin.

Then in the late 1990s the UK arm of the operation took over the all-Ireland market (run from Dublin) as an effective region of the UK so goods now came from their factory in England. This made a sort of sense due to the geographic (and political) context, particularly as the single market bedded down and the border withered away. The Irish operation contracted leading eventually to a single distribution and assembly hub in a business park not far from Dublin Airport – albeit as time progressed more people were employed than had been the case originally. But, that company continues to supply to both the ROI and NI market – different specs too for goods for both areas as a quick browse of their website confirmed the other day.

The point being that for twenty odd years the profile of this company was predicated on a de facto land bridge between the continent and the UK and then on to the ROI to service both the ROI and NI market. Now all the supply chains have to be reconsidered. If an agreed deal occurs well that’s probably okay, inconvenient but not impossible. But if it doesn’t the Irish market is now linked into a UK market in ways that make working around it much more difficult.

But again, who is to know how matters will fall? Does it make sense for them to alter their approaches prior to an event that may or may not happen and particularly when the costs incurred in doing so may be considerable.

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