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Adrian Wilson

Editor's Viewpoint

29th June 2018, UK

Brexit warnings need listening to

Recent warnings from both Airbus and BMW that the uncertainty surrounding Brexit – the UK’s exit from the European Union – may affect future business decisions should surely not go unheeded.

To dismiss the concerns of these major organisations as simply ‘scaremongering’ – as sections of the UK’s right-wing press have sought to do – borders on insanity.

The first BelugaXL oversize cargo airlifter with its special beluga whale-inspired livery. © Airbus

BMW employs around 8,000 people in the UK and its chief Ian Robertson has warned that without clarity over Brexit in the next couple of months, it would begin making “contingency plans”.

The absence of a settlement, he said, was “making the UK less competitive, in a very competitive world right now. That is a decisive issue that ultimately could damage this industry.”

Airbus meanwhile directly employs around 14,000 people across 25 sites in the UK and its CEO Tony Williams has said the organisation is “frustrated and concerned by the situation and particularly the lack of clarity”.

Airbus has published a Brexit ‘risk assessment’ warning that a non-amicable Brexit would lead to “severe disruption and interruption of UK production.” Such a scenario would “force Airbus to reconsider its investments in the UK, and its long-term footprint in the country.”

“We have a great operation in the UK and it’s my responsibility to protect that, for our employees, customers and shareholders,” Williams said, denying any political pressure from European governments. “I’m an engineer, not a politician, but in any scenario, Brexit has severe negative consequences for the UK aerospace industry and Airbus in particular.”

Steeped in Europe

With revenues of €66.7 billion in 2017, Airbus has some 100,000 employees worldwide, and while it also has manufacturing operations in the USA and China, it is undoubtedly steeped in Europe, with its main site in France, corporate headquarters in The Netherlands, and major hubs in Germany and Spain – all deeply linked to those 25 sites in the UK.

Deliveries of BMW’s composites-rich i3 electric vehicle. © BMW

The importance of Airbus to the composites industry goes without saying. As I reported in April, the push to ramp up production of Airbus A350 XWB wide body jet airliners to ten per month in 2018 is leading to frenzied activity throughout the global operations of companies like Hexcel.

The body of each A350 XB is 53% composite based, and worth $4.8 million to Hexcel alone in the materials supplied per individual plane. Hexcel’s president for aerospace. There is currently a backlog of some 844 orders for the A350 XB, with 78 planes delivered during 2017. The programme is now being accelerated.

While being US headquartered, Hexcel – like Airbus – has closely-tied Europe-wide operations, with its UK operations alone responsible for $160 million of the company’s $2 billion sales in 2017.

Optimism

Despite the doom, gloom and uncertainty, the UK’s manufacturing industry continues to receive some major shots in the arm – such as the £40 million Boeing plant that is scheduled to open in Sheffield alongside the Advanced Manufacturing Research Centre (AMRC) later this year.

As Boeing’s first manufacturing plant in Europe, it will create spur gears, shafts and housings for Boeing’s next-generation aircraft, including the 737, 737 MAX and 777 planes. It has been described as a “smart factory, equipped to take advantage of what we call industry 4.0 – the capturing and applying of data insights to make systems work perfectly.”

Then there is the unwavering support of Germany’s Siemens, which in addition to planning a £27 million 3D-printing factory at its Worcester-based business Materials Solutions, has announced a new £200 million rail plant in Goole, Yorkshire, with the creation of around 1,000 direct jobs and a further 1,700 indirect positions. The rail industry, of course, is a healthily growing market for composites.

Siemens has announced a new £200 million rail plant in Goole, Yorkshire. © Siemens

Siemens, however, is not without its own concerns about the consequences of Brexit.

“My biggest worry is that I don’t know what we are planning for,” Siemens UK CEO Juergen Maier told Reuters in an interview last week. “We need to put something in place quickly that works and if that is not possible then we have to just default to staying in the customs union.

“We ship thousands of goods daily across the borders that help keep power stations running, that help keep trains running, that help keep British manufacturing running – are those parts going to be able to pass pretty frictionlessly over the border? Or are we going to be in a situation where we have supply chains that are struggling to deliver to us and where we are struggling to export from the UK?”

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