Major manufacturers issue warning over Brexit uncertainty
Airbus and BMW both raised concerns about the process of leaving the European Union.
Major manufacturers employing more than 20,000 people in the UK have spoken out about the potential impact of Brexit on key British industries.
A warning by Airbus that it could pull out of the UK with the loss of thousands of jobs if Britain crashes out of the EU without a deal is “no idle threat”, the aerospace giant has stressed.
And BMW said uncertainty over Brexit could damage the competitiveness of the UK’s automotive industry.
Airbus sent shockwaves throughout British industry and the Government when it said it would “reconsider its investments in the UK, and its long-term footprint in the country” if Britain was forced to leave the single market and customs union in March 2019 without any transition agreement in place.
Airbus employs 14,000 people at 25 sites across the country.
Katherine Bennett, Airbus’s senior vice president in the UK, told the Press Association: “We don’t deal in idle threats. We seriously believe a no-deal Brexit would be catastrophic.”
She said the Government had been made well aware of the company’s views during “extensive and frank” discussions.
But security minister Ben Wallace hit back, saying the firm had relied on countries such as the UK to cover the costs of the A400M military transport plane.
“Aerospace manufacturers need customers,” he said. “Perhaps they might reflect on that.”
When I last checked if it wasn’t for the customer countries of the A400m , Airbus would have not been able to cover the over budget and delays. Aerospace manufacturers need customers. Perhaps they might reflect on that— Ben Wallace MP (@BWallaceMP) June 22, 2018
Ministers have been told that the impact of exiting the EU without any sort of trade deal would be “devastating” for the aerospace industry.
Airbus has more than 4,000 suppliers, and its warning applies to other sectors such as automotive.
Ian Robertson, BMW’s special representative in the UK, said uncertainty was causing problems for the industry.
The German carmaker employs around 8,000 people in the UK, with its plant in Oxford producing the popular Mini range.
Mr Robertson told the BBC: “If we don’t get clarity in the next couple of months, we have to start making those contingency plans – which means investing money in systems that we might not need, in warehouses that might not be usable in the future, in effectively making the UK automotive industry less competitive than it is in a very competitive world right now.”
The Government insisted the negotiations with Brussels were making “good progress” and it was confident that a “no-deal scenario” would not arise.
But unions and opposition parties attacked the Government for the impact already being felt across industry from the lack of a deal.
Unite called on the Government to stop the “infighting” and provide some certainty for British industry and millions of workers.
Assistant general secretary Steve Turner said: “It would be a betrayal of Airbus workers, their families and the tens of thousands of workers in the wider supply chain if the Government failed to secure frictionless trade and access to the customs union and single market.”
Airbus said it had been trying to raise its concerns about where the negotiations were heading for the past year without success.
It published a risk assessment warning that production is likely to be “severely disrupted” if there is no deal, leading to “unrecoverable delays”, potentially costing Airbus billions of pounds.
If an agreement is reached, there would still be a “significant amount of risk”, the company said.
Scottish First Minister Nicola Sturgeon said the Airbus warning was “the tip of the iceberg” and her Welsh counterpart Carwyn Jones said it was a “wake-up call”.
Shadow Brexit secretary Sir Keir Starmer said Mrs May needed to drop her Brexit “red lines”.
“The Government’s reckless decision to keep no deal on the table and to rule out a customs union or strong single market deal after Brexit is putting jobs and the economy at risk,” he said.
“Ministers need to start listening to legitimate concerns of businesses and get a grip of the Brexit negotiations.”
Put simply, a no-deal scenario directly threatens Airbus's future in the UK Tom Williams, Airbus
Airbus called on the Government to extend the planned transition period due to run until December 2020, saying it was too short for the business to reorganise its supply chain.
Tom Williams, the chief operating officer of Airbus Commercial Aircraft, said Brexit would have “severe negative consequences” for the UK aerospace industry whether or not there was an agreement with Brussels.
“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,” he said.
“Put simply, a no-deal scenario directly threatens Airbus’s future in the UK.”
A Government spokeswoman said that while officials were working closely with companies to understand their concerns, they did not expect a no-deal scenario to arise.
We have made significant progress towards agreeing a deep and special partnership with the EU to ensure trade remains as free and frictionless as possible, including in the aerospace sector Government spokeswoman
“We have made significant progress towards agreeing a deep and special partnership with the EU to ensure trade remains as free and frictionless as possible, including in the aerospace sector, and we’re confident of getting a good deal that is mutually beneficial.”
Downing Street denied that ministers had ignored concerns raised by Airbus about the Brexit negotiations.
“Airbus were in Downing Street with the PM in April as part of an aerospace round table,” a spokeswoman said.
“(Business Secretary) Greg Clark spoke to them earlier this week and officials will speak to them today so we are listening to their concerns.”