Airbus has registered its growing alarm about the lack of progress in Brexit negotiations and warned that it may reconsider its presence in the United Kingdom.
Its main fear is that the UK departs the European Union on 29 March 2019 without an exit deal, in which case the future of Airbus UK – which focuses on the production of wings for all commercial Airbus programs – would be in grave doubt.
“A no-deal Brexit must be avoided, as it would force Airbus to reconsider its footprint in the country,” states Airbus.
However, a negotiated exit also poses risks, chief among them customs-related delays; disruption from new immigration controls; and a transition period after Brexit that Airbus considers “too short for governments to agree on all important open points, and for Airbus and its tier one suppliers to agree and implement all changes with their extensive UK supply chain”.
Thus, even a negotiated exit could cost Airbus up to €1 billion per year for its UK operations, which export goods worth €10 billion per year to the European Union mainland and import €5 billion-worth.
Supporters of Brexit have accused Airbus of scare-mongering. They argue that Airbus’s business in the UK, where it employs 14,000 people, is too large and too entrenched for the company to up sticks.
Residents of Flintshire, home of Airbus’s Broughton wing plant that employs 5,000 people, no doubt think the same: they voted 56% in favor of Brexit in the 2016 referendum despite the risk to the biggest employer in the region.
However, they must recognize the danger of a no-deal Brexit, which would see Britain leave European regulatory authority EASA, meaning that from 29 March 2019 all parts produced in the UK could not be installed on Airbus aircraft.
Their expectation, therefore, seems to be that political expediency will force a deal to be struck that allows UK operations of Airbus to continue relatively unhindered.
Indeed, this epitomizes the core position of ‘Leave’ supporters: that Europe will agree to key elements Britain’s post-Brexit positioning because it is in the former’s interest to do so.
Two years after the referendum, unfortunately, there is almost no evidence they are correct.