Airbus warns ‘negative’ impact of Brexit threatens its UK future
Group raises concern over political paralysis and details ‘severe consequences’ of exit
Airbus has threatened to pull out of the UK after warning that, under “any scenario, Brexit has severe negative consequences for the UK aerospace industry and Airbus in particular”.
The warning reflects growing concern in the UK business community about post-Brexit Britain amid deep divisions in parliament and government over the terms and conditions of the exit from the EU.
“We’ve come to the point where we have to make serious decisions. We can’t continue with the current vacuum in terms of clarity,” Tom Williams, chief operating officer of the group’s commercial aircraft, told the BBC’s Today programme on Friday.
The move from Europe’s leading aerospace and defence company comes after Theresa May, the prime minister, this week narrowly defeated a revolt by pro-European Conservatives demanding a “meaningful vote” in parliament should the UK face a hard Brexit.
Airbus on Thursday posted a Brexit risk assessment on its website and warned that it was “increasingly concerned by the lack of progress on the Brexit process”.
The company estimated that it could lose up to €1bn a week in sales if the UK quits the EU without agreeing the terms of a future trading relationship with Brussels.
Mr Williams criticised the lack of direction from the government and called for “immediate details on the pragmatic steps that should be taken to operate competitively”.
He said on Friday that the situation was becoming “too dangerous to proceed”, and that the company was looking to make serious decisions about its future “over the next weeks”.
Mr Williams said a significant concern was whether Airbus would be able to access supplies of the component parts it needs in order to build planes, and whether there would be “chaos at the borders” after March 2020.
Suppliers of parts in the UK are currently governed by the European Aviation Safety Agency. Without its certification, and if the UK does not agree to align itself with EU standards via a new British agency, he raised concerns that aircraft with British parts will not be valid.
“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’s future in the UK,” he said.
Even in the case of a deal, the company — which employs 15,000 people across 25 sites in the UK — warned that Brexit would introduce new and costly complications that would need to be resolved if it was to remain a big investor in Britain.
“The current planned transition (which ends in December 2020) is too short for the EU and UK governments to agree the outstanding issues, and too short for Airbus to implement the required changes with its extensive supply chain.
“Until we know and understand the new EU-UK relationship, Airbus should carefully monitor any new investments in the UK and should refrain from extending its UK suppliers/partners base,” the risk assessment says.
In a statement accompanying the risk assessment, Airbus warned that it could be forced to withdraw from the UK’s “Wing of Tomorrow” programme, a government-funded initiative to retain the UK’s leading position in aerospace technology.
The programme was intended to be the focus of plans due to be announced in July at the Farnborough Airshow, with the government expected to allocate funding for high-value design from its industrial strategy challenge fund. This is expected to be matched by funding from Airbus and other aerospace companies.
However, without a deal, Airbus could consider investing in future wing technology elsewhere, the risk assessment states. It could even “reconsider its footprint in the country, its investments in the UK and its dependency on the UK”.
Mr Williams said the company had already begun to “press the button on crisis actions”. Although the company wants to protect its operation and employees in the UK, he said, it is not possible to do so “in the current situation”.
“I’m an engineer not a politician,” he said. “I have to deal with certainty.”