Trumpf takes action to prepare for Brexit

13 Feb 2019

UK MD Lee Moakes writes to customers, advising them of company preparations - including increasing local stock by £2m.

As the date of the UK’s withdrawal from the EU is rapidly approaching (expected to be 29th March, 2019), the UK’s division of laser and machine tool giant Trumpf has written to customers to advise them of its preparations in the event that distribution of equipment and associated supplies is adversely affected.

Lee Moakes, the company’s UK Managing Director also published the following letter on the company’s website:

He writes “I want to update and reassure you on the current position of Trumpf on the critical topics that may affect us and our customer base.

"During December 2018, we initiated stress testing on the myriad of scenarios that may occur and identified key factors that have a high risk to our ongoing business concerns during and after the [Brexit] transition period.”

Moakes defined several focus points and the company’s plans to counter any problems that might arise, as follows:

Risk analysis

The letter highlights the areas that Trumpf intends to mitigate:

• Exchange rate volatility
• Importation duty
• Importation delay, capital equipment and spare parts

The company’s “mitigation strategies”, relayed directly to customers, include:

• Exchange rate volatility: Trumpf’s standard policy is to have forward exchange contracts: “we have increased our hedging for 2019 to increase protection from extreme and adverse movements throughout the year.”
• Importation duty: “To alleviate the concerns, Trumpf will ensure that no additional costs are incurred by the customer should any tariffs or duties be applied. This being applicable to all purchase orders placed before the 30th March 2019, whether capital equipment or spare parts. During March 2019 we should have more clarity on the withdrawal date and tariff status and shall update our customer base accordingly.” [The expected date of the UK’s departure from the EU is 29th March, 2019.]
• Importation delay: “Trumpf has reviewed all spares and consumables delivered directly to our customer base from the EU in the last two years. As a result we have increased our local inventory by £2 million, we shall maintain focus on the inventory level throughout and amend dynamically during 2019. TRUMPF have agreed measures with our logistics providers to ensure minimal importation disruption and are appointing a customs broker shortly.”

Moakes concluded his letter to customers: “In the meantime, our customers should take comfort and reassurance from the fact that Trumpf has proactively assessed and taken actions to minimise risks.”