‘Extremely serious’ announcement by Airbus Chief – Brexit ‘No Deal’ directly threatens Airbus’ future in the UK

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This article is old - Published: Friday, Jun 22nd, 2018

A Brexit ‘Risk Assessment’ published on Thursday by Airbus has painted a grim picture of what a ‘No Deal’ Brexit would look like for the European planemaker in the UK.

The planemaker says a ‘No Deal’ would lead to severe disruption and interruption of UK production and leave Airbus considering its future in the UK. The company, employs 14000 in the UK, around 6000 people work at Broughton – it supports a further 110,000 jobs in its supply chain in the UK.

The Brexit ‘Risk Assessment’ says:

‘In case of the UK leaving the EU without a deal on the 29th March 2019, there would be no Transition Phase, the UK would leave the Single Market, the Customs Union and the European Court of Justice jurisdiction. Therefore, WTO rules would kick in and numerous frictions would heavily impact our operations and that of our supply chain.’

It goes onto say:

‘Airbus’ production is likely to be severely disrupted due to interruption to the flow of parts and/or discontinued airworthiness. Given today’s prevailing uncertainty, buffer stocks valued at around €1bn would be needed.’

Given Airbus’ steep ramp-up demands on the best-selling A320 and A350 families, our critical industrial capabilities are already running at full capacity.

With no spare capacity left over years to come, every disruption to production would most likely turn into an unrecoverable delay.’

Airbus says a no deal scenario would force it to reconsider its investments in the UK, and its long-term footprint in the country, severely undermining UK efforts to keep a competitive and innovative aerospace industry, developing high value jobs and competences.

‘A no deal Brexit must be avoided, as it would force Airbus to reconsider its footprint in the country, its investments in the UK and at large its dependency on the UK. Given the “No deal/Hard Brexit” uncertainties, the company’s dependence on and investment in the flagship “Wing of Tomorrow” programme would also have to be revisited, and corresponding key competencies grown outside the UK.’

Tom Williams, Chief Operating Officer of Airbus Commercial Aircraft, commented:

“In any scenario, Brexit has severe negative consequences for the UK aerospace industry and Airbus in particular. Therefore, immediate mitigation measures would need to be accelerated.

While Airbus understands that the political process must go on, as a responsible business we require immediate details on the pragmatic steps that should be taken to operate competitively.

Without these, Airbus believes that the impacts on our UK operations could be significant.

We have sought to highlight our concerns over the past 12 months, without success.

Far from Project Fear, this is a dawning reality for Airbus.

Put simply, a No Deal scenario directly threatens Airbus’ future in the UK.”

Wrexham’s MP Ian Lucas has said today: “The announcement by Airbus is extremely serious but it is not a surprise.”

“In a Commons debate on the subject of Brexit well over a year ago, I told the Government that it was essential we put in place a system for working with other European Union countries that is as close as possible to the one we have now.

“We must take the best parts of our relationship with the EU and preserve it as consistently as we possibly can.

“But not only is the prime minister incapable of reaching out to other parties on this issue, she also cannot secure agreement from her own cabinet about what Britain’s future relationship with the EU is going to be.
“The year since the last General Election has been wasted by the Conservative Party fundamentally disagreeing over the future that it sees for the UK.

“It is now urgent that this disagreement is set aside because Airbus will not be the last business to announce that it is reconsidering its business model. If we do not act now, we will hear of many other UK-based businesses who will be thinking it would be much easier for them to operate from a different country, meaning jobs, livelihoods and futures in the UK would be lost.”

The in / out Referendum saw 41,544 Wrexham people voting to leave the EU and 28,822 voting to remain part of it – with a whopping 71.6% turnout.