January 24, 2019 / 6:20 AM / 7 months ago

Airbus threatens to shift work if Britain leaves EU with no deal

PARIS (Reuters) - Airbus warned on Thursday it could shift future wing-building out of Britain in the absence of a smooth exit from the European Union, predicting “potentially very harmful decisions” for its British operations in the event of a ‘no-deal’ Brexit.

In a direct appeal to Britain’s divided parliament to avoid a disorderly divorce, Chief Executive Tom Enders issued his sharpest warning yet that future jobs are at risk and branded the lack of clarity for businesses as a “disgrace”.

"The UK's aerospace sector now stands at the precipice," Enders said in a video released on Airbus' website. bit.ly/2Hs0D4g

“If there is a no-deal Brexit, we at Airbus will have to make potentially very harmful decisions for the UK.”

The world’s second-largest aerospace group employs 14,000 people in Britain, including 6,000 at its main wings factory at Broughton, Wales, and 3,000 in Filton, western England, where wings are designed and supported.

Some eurosceptic UK lawmakers have accused Airbus and others of scare-mongering and cast doubt on whether the planemaker would move efficient operations out of Britain.

German-born Enders insisted Airbus was not bluffing.

“Please don’t listen to the Brexiteers’ madness which asserts that, because we have huge plants here, we will not move and we will always be here. They are wrong,” he said.

“Of course, it is not possible to pick up and move our large UK factories to other parts of the world immediately. However, aerospace is a long-term business and we could be forced to re-direct future investments in the event of a no-deal Brexit. And make no mistake there are plenty of countries out there who would love to build the wings for Airbus aircraft.”

Asked about the Airbus warning, British Prime Minister Theresa May’s spokesman said she was working to secure a deal to ensure a smooth departure from the EU.

COMPETITION FOR WING MANUFACTURING

Industry experts say Airbus has no all-new civil airplane projects on the drawing board, but has begun working on basic wing technology for a successor to its best-selling A320 narrow-body series, expected to enter service from about 2030.

That means any decision to shift wing production for new projects would have to be taken next decade. Other Airbus host states like Germany are vying for investment but executives say Japan, China or South Korea, or the United States where the group has a growing industrial footprint, could also be considered.

Enders’ comments come on the heels of plans by two firms, Dyson and Sony, to relocate global or regional headquarters out of the UK. Other business groups have also voiced concern over the government’s refusal to rule out a ‘no-deal’ Brexit if it cannot win parliamentary support for its preferred withdrawal plan.

Slideshow (2 Images)

However, the chief executive of another major aerospace company, France’s Thales, which is one of Britain’s top defence suppliers, told Reuters that Brexit should be “manageable”.

Speaking during the World Economic Forum in Davos, Switzerland, British finance minister Philip Hammond told business leaders that staying in the EU would betray the result of a 2016 referendum but that no deal would hit prosperity and risk fuelling populism.

Reporting by Tim Hepher; Additional reporting by William James, Allison Lampert; Editing by Simon Cameron-Moore/Kim Coghill/Susan Fenton

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