Airbus Threatens to Leave UK in Case of Hard Brexit

(Source: Department for Business, Innovation and Skills)


Airbus threatens to leave UK in case of a hard Brexit, a clear warning for Conservative Prime Minister Theresa May and her government, whose negotiations with Brussels are stagnating nine months before the country is set to leave European Union on March 29, 2019.

On June 21, 2018, Airbus published a risk assessment in case of a “no deal Brexit” or an “orderly” one. The aircraft manufacturer reminds that it employs 14,000 people over 25 plants, where it builds wings for its commercial and military aircraft. Additionally, its parts supply chain support over 110,000 jobs.

In case of a hard Brexit, in which case the United Kingdom would leave the common market without a transition period, Airbus warns that its production would be “severely disrupted”. To lower its reliance on UK production, the plane maker would have to divest and repatriate assets to the continent. “Put simply, a No Deal scenario directly threatens Airbus’ future in the UK,” commented Tom Williams, Chief Operating Officer of Airbus Commercial Aircraft.

A more positive outcome for Airbus, an orderly Brexit, would still have some consequences on production, leading to delays. The company judges that transition period (which should last less than a year) would still be too short to prevent disruptions.

Following Brexit, industry analysts estimate that Airbus cannot massively divest from UK as it needs to support production and deliveries of its current orders. However, it could progressively transfer its plants to Germany or Spain by 2025. Meanwhile, Airbus could increase parts output to create a stock to use while it adapts production to Brexit.

Source: Aerotime