BREXIT-PROOF UK ELECTRONICS MANUFACTURERS
Considering recent negotiations, we want to assure our current and future customers of our strong position during and after Brexit. Also, we want to clarify the predicted effects of the potential outcomes of the UK leaving the European Union (EU). In2tec is a leading design to manufacture electronic engineering company. For over 25 years, we’ve specialised in creating custom electronic solutions for diverse markets, from banking to motorsport and beyond.
We invest heavily in flexible electronics R&D (including fully flexible printed circuit board assembly and rigid flex curved touch screens). And we offer a broad technology set, so our electronic designers exceed client’s expectations based on unique situations and specifications. As a UK electronic design company with international facilities and clients, the effects of Brexit are important to us. We ensure whatever the outcome, our bespoke technology clients will benefit, due to our international manufacturing facilities and forward-thinking approach.
Why Brexit is not a Problem for In2tec
To summarise the situation, UK citizens voted to leave the EU mainly due to a “migration crisis”. The crisis being Turkey, and it’s 80 million citizens, getting ready to join the EU. When Turkey join, they can use the freedom of movement policy to move and live in EU countries. Some companies have been profiting from the panic created by UK trade bodies such as the National Farmers Union. For example, selling overpriced packages of long-lasting food, despite European countries such as Norway already thriving without EU membership.
EFFECTS OF BREXIT ON UK ELECTRONICS SUPPLIERS
Post-Brexit, UK electronics companies are predicted to cost less than EU counterparts in coming years, due to changing GBP value. Quality regulations may change, as European electronics standards will be replaceable, which may allow faster production of similar quality products. In2tec’s electronics OEM clients sell products containing our high quality bespoke electronics across Europe, so we’ll maintain European electronics standards.
Automotive industry professionals have been making similar dramatic claims as the National Farmers Union, stating that a no deal Brexit could destroy the UK automotive industry. This is because “The average UK-built car has about 6,000 parts, the majority of which come from the EU”, and that if border control laws are not agreed upon, parts will be held up at the border for longer.
Automotive professionals made similar claims to the National Farmers Union, stating no deal Brexit could destroy the UK automotive industry. JLR chief executive, Ralf Speth, issued a stark warning about the effects of a no-deal Brexit. He stated the company could only stockpile enough parts to deal with only a few days of trade disruption. The company recently cut 4,500 jobs (10% of its UK employees) to focus production efforts in more stable geopolitical regions. At In2tec we use a similar supply chain model, however we have production facilities in both the UK and Asia. We can bypass border issues by moving production of printed electronics, membrane keypads or more to our In2tec Asia sites. By wholly owning these sites, we retain the expected high quality while mitigating supply chain disruption.
Growing and providing better service
This is mirrored across large electronics manufacturing companies, with Philips closing a UK factory for their Avent baby products brand. Toyota stated it would temporarily halt production at its UK site if it left the EU without a trade agreement. This shows the gravity of the supply chain issue, as that would remove weekly revenue of 60 million pounds. Panasonic has changed its European head office from near London to Amsterdam, however has stated it won’t move its factory. As these overseas companies decrease activity in the UK, UK-based companies such as In2tec can grow and provide even better service.
Economists predict that in all five potential Brexit scenarios there will be an overall reduction in UK manufacturing output. However, at In2tec we have hired additional staff at our UK facilities to handle increasing demand of our custom electronics.
Economics professor David Blake concludes his overview of Brexit that although the UK may have a few teething issues establishing itself outside the EU: “The EU is like the Titanic, but with a big difference. Whereas Captain Edward Smith of the Titanic did not see the iceberg in his path, Captain Jean-Claude Juncker and First Officer Michel Barnier of the good ship ‘European Union’ know full well that there is an iceberg – indeed multiple icebergs – in their path, but believe that their collective political will is strong enough to plough straight through: it is going to be a very bumpy ride for those remaining on board”.
WORKING WITH THE EU
No matter what, large companies from the UK and EU will continue to work on large R&D projects. For example Eurofighter, a partnership between defence companies from the UK, Germany, Spain and Italy that creates Typhoon combat aircraft. Half the RAF’s current 18bn budget for combat aircraft is for Typhoon aircraft, which will remain in service for “decades”. Projects like this prove despite Brexit, innovative electronics will continue to be collaborated on throughout Europe. After decades of cooperation on the Typhoon, the UK and France planned to together develop an unmanned combat air system. However, France has teamed up with Germany instead to develop a “Future Combat Air System”.
In response to this, the UK began work on an independent manned stealth fighter jet, called Lightning. Meanwhile the UK’s British Aerospace Engineering (BAE, Europe’s largest defence company) continues to work with US defence giant Lockheed Martin. In collaboration with other US defence companies they are building the F-35 fighter, known as “the world’s biggest combat-jet program”. BAE’s performance, including a recent a £20 billion contract for Australia’s navy, is proof UK technology companies benefit from Brexit. Furthermore, experts argue the UK may team up with aerospace companies in Asia to develop next generation combat aircraft. This is due to increasingly strong political and technological alliances with Eastern nations, evidenced in China’s belt and road strategy.
TAKING ADVANTAGE OF ASIAN MANUFACTURING WITH IN2TEC
The UK and China have had a close economic relationship in recent years, and Asian manufacturing is notoriously cost effective, so UK electronics companies will have reason to move their European manufacturing to China and other Asian nations, if the outcome of Brexit imposes tariffs that make development within the EU even less appealing. However, a sudden switch from EU to Chinese manufacturing won’t be simple. Thankfully, In2tec already owns facilities in Shenzhen and Hong Kong, meaning our clients are already benefiting from cost effective, secure supply chains.
China recently passed the EU in R&D investment and already leads many countries in some measures of GDP, scientific paper production, researchers, plus high technology manufacturing and exports. While many see Western nations as leaders in science and technology, China held the title until two centuries ago, so they are simply regaining their historical position, and since 2015 produces most of the world’s solar energy, despite recently slowing its progress in that area. In2tec places great importance on manufacturing sustainable electronics, due to the unignorable research showing that the growing electronic waste problem is creating giant toxic landfills that cause neurological, digestive, respiratory and bone problems for large populations. So, our integration with China is in line with both our values and business objectives. In2tec ensures our parts are future proofed against impending regulations banning unsustainable electronics, such as those in the Paris Climate Agreement.
Switch to In2tec to benefit from Brexit
China is seen by many as a crucial partner for UK companies in coming years. Beyond the widely sought cost savings benefit of Asian manufacturing, China is also less reliant on imports for the minerals that enable emerging technologies (that are starting to be seen as more important than fuel in resource conflicts), such as silver conductive ink for flexible printed circuit boards, than the US, the UK’s other major non-EU partner. As a bespoke electric engineering company, we see the value this will have in the future. If there are shortages of a resource or part, the companies closest to the source have greater access to the limited supply. We are gaining increasing numbers of clients who switch to us because we can consistently supply promised parts their old suppliers could not.
GET IN TOUCH
Ensure your company benefits from Brexit: work with In2tec for circuit board design, flexible circuit solutions and printed circuit assemblies. We are ready to take on new projects, and an In2tec electronics consultant is just a call or email away.
Call +44 (0)1536 419200 or email [email protected] to start your enquiry.
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