Sat, Jun 23, 2018 - Page 10 News List

Airbus sounds alarm on no-deal Brexit

‘SEVERE DISRUPTION’:Analysts have said the aircraft manufacturer could consider shifting production of wings for next-generation jets from the UK to other nations

Reuters, PARIS

Airbus SE issued its strongest warning yet over the impact of Britain’s departure from the EU, saying that a withdrawal without a deal on future trade would force it to reconsider its long-term position in the UK.

In a memorandum issued late on Thursday, Airbus said softer plans for a transition period ending in December 2020 were still too short for the aircraft manufacturer to adapt its supply chain and would prevent it from expanding its UK supplier base.

Airbus, which makes wings for all its jetliners in the UK, said that leaving both the EU’s single market and customs union immediately, and without any agreed transition, would lead to “severe disruption and interruption” of UK production.

“Put simply, a no-deal scenario directly threatens Airbus’ future in the UK,” Airbus Commercial Aircraft chief operating officer Tom Williams said.

Airbus is accelerating measures to reduce risks, he said in the statement, without elaborating.

In March, Williams told staff in a video that Airbus was looking at buying more parts to build up a buffer stock to cope with potential disruption when Britain leaves the EU on March 29 next year.

Echoing calls from Germany’s Siemens AG earlier this week, Airbus said it needed immediate details on how its operations would need to be organized.

Industry analysts have said Airbus would be unlikely to pull out of the UK abruptly because of long lead times and waiting lists for its airplanes.

However, it could consider shifting wings for the next generation of single-aisle jets, whose development is expected to begin in the middle of the next decade.

Germany, Spain or emerging aerospace suppliers such as South Korea are seen as possible candidates to take work from the UK.

British Prime Minister Theresa May on Wednesday won a crucial Brexit vote in parliament, keeping her divided government’s plans to end more than 40 years of British partnership with the EU on track.

However, talks with the bloc have all but stalled, with May’s top team of ministers at odds over plans for future trading relations with the EU.

Businesses have complained that makes them unable to plan their investment decisions.

British Secretary of State for International Trade Liam Fox on Thursday said the parliamentary vote on Wednesday had closed the door for good on any chance of the nation staying in the EU.

Britain was keen to ensure continuity as it leaves the trading bloc, he said.

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