Airbus threatens UK exit over Brexit uncertainty

Airbus Broughton

Airbus has warned it could leave the UK if the country exits the European Union single market and customs union without a transition deal.

The European planemaker, which employs 14000 in the UK, around 6000 people at its Broughton site in Chester, while supporting a further 110,000 jobs in its supply chain in the UK, said the the warning was not part of “project fear, but its “dawning reality”.

Last week, the outgoing president of the CBI said sections of UK industry faced extinction unless the UK stayed in the EU customs union.

It brings together the EU’s 28 members in a duty-free area, with a common import tariff for non-EU goods.

Prime Minister Theresa May has ruled out staying in the customs union. The UK is due to leave the EU on March 29 2019.

The UK government is considering two other options: a customs partnership that would remove the need for new customs checks at the border; and a “highly streamlined” customs arrangement that would minimise customs checks rather than getting rid of them altogether.

Michel Barnier, the EU’s Brexit negotiator, has said that both options are unrealistic.

A spokesperson for the UK government said: “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.

“Given the good progress that we are continuing to make in the negotiations, we do not expect a no-deal scenario to arise.”

In its Brexit “risk assessment” published on Thursday, Airbus said if the UK left the EU next year without a deal – meaning it left both the single market and customs union immediately and without any agreed transition – it would “lead to severe disruption and interruption of UK production”.

“This scenario would force Airbus to reconsider its investments in the UK, and its long-term footprint in the country,” it added.

The company also said the current planned transition period which is due to end in December 2020 was too short for it to make changes to its supply chain.

As a result, it would “refrain from extending” its UK supplier base. It said it currently had more than 4,000 suppliers in the UK.

Click here to sign up to receive our new South West business news...
Close