On-going issues in Europe pose threat to automobile industry, warns Daimler chief 0

With the potential ‘Brexit’ and the migrant crisis, Europe has got carmakers in a spin.

The potential dismantling of Europe’s Schengen free-travel agreement to help deal with the flow of refugees and migrants poses a threat to the auto industry and leaves their manufacturing system extremely vulnerable, according to chief executives of both Opel and Daimler.

Speaking at this year’s Geneva Motor Show Karl-Thomas Neumann and Dieter Zetsche, the respective chief executives of Opel and Daimler, both confronted the issues surrounding the industry in Europe right now. Any threat to the Schengen free-travel agreement – which is a possibility in a bid to stem the flow of refugees and migrants overcrowding certain areas – worries the car executives as tighter border controls could interfere with the trafficking of goods. “A breakdown of Schengen would be horrific for us,” Neumann told reporters at the motor show. “We have huge logistics operations in southern Europe; any disruption would have an immediate impact on the bottom line.” The automobile industry benefits from the free transport of goods and components from factories in Germany, Spain, Poland, the UK and Italy, and the potential danger to this system could lead to a bumpy, uncertain future.

Daimler’s Zetsche echoes the sentiment of Neumann, and is quoted as saying his company is already struggling with the limits of its production capacity due to the demand for their luxury vehicles. Parts need to be quickly and reliably imported to the factory to ensure the company’s lean production system functions without delay or error.”Our factories are running with one or two hours of time buffer,” Zetsche is reported as saying, adding that any shutting down of borders could disrupt the company’s entire production system. Daimler have already mentioned concern about Britain exiting the EU, with Bodo Uebber, CFO at the company, telling press in America that he was “in favour of the European ideal and the bigger it is, the better.”

This news follows our previous reports on several carmakers explicitly coming out in support of Britain remaining within the EU. Nissan, Ford and Vauxhall have all voiced similar concerns recently, and we previously wrote about Vauxhall boss Rory Harvey’s comments at the Geneva Motor Show (something about the show this year that’s bringing out all the politicos) where he stated “We have a position and that position is that we think that now, at the moment, we should stay in the EU.”