AIRBUS

Big business is finally starting to speak out clearly on the insanity that is Brexit. Frustrated by the slow progress and lack of a clear plan, Airbus broke cover to warn of the consequences of a no deal exit (HERE). They talk about the "major risks to the aerospace sector" if we leave the SM and the CU without a transition period. And they complain the present 21 month transition is not long enough to reorganise their supply chains. But I assume some of the consequences they predict will happen after any transition period anyway - if we leave the single market and the customs union.

The warning comes in the form of a risk assessment (HERE) which says:

"[Our supply chain] is operated on a just-in-time basis relying on frictionless trade today provided by the combination of the EU Customs Union and Single Market rules. Any change in customs procedures, logistics and environmental standards would have major industrial and cost impact".

And what about this (emphases all by Airbus):

"A no deal Brexit must be avoided, as it would force Airbus to reconsider its footprint in the country, its investments in the UK and at large its dependency on the UK (with many potential undesirable consequences such as repatriating competencies, patents, revisit Research and Development footprint, reduce UK’s weight in the supply chain etc.…). Given the “No deal/Hard Brexit” uncertainties, the company’s dependence on and investment in the flagship “Wing of Tomorrow” programme would also have to be revisited, and corresponding key competencies grown outside the UK.

"This extremely negative outcome for Airbus would be catastrophic. It would impair our ability to benefit from highly qualified British resources, it would also severely undermine UK efforts to keep a competitive and innovative aerospace industry, while developing high value jobs and competencies".

Let us hope more companies will join Airbus in pointing out the damage that we will do to ourselves when we leave the EU. The report I link above to is the one in The Daily Mail and I wonder if the reality of a disaster that they were the biggest cheerleaders for, is finally dawning in the pro-Brexit press. I assume at some point the tsunami of warnings will eventually change minds.

I seem to remember during the campaign Airbus said remaining in the EU was the best outcome for them. Unfortunately, the electorate ignored it and no doubt others thought it was just scaremongering. 

The BBC this morning are saying car manufacturers and Airbus are looking at warehousing to hold stocks of components which would negate the advantage of JIT manufacturing and make this country a much less attractive location for mass produced goods. Manufacturers are not going to abandon their UK plants straightaway but over time investment will go elsewhere and the factories will eventually close. Why invest here when you can get more efficient supply chains in the EU?

In March apparently, an Airbus executive told the BBC they welcomed Theresa May's announcement that we would remain in the EASA. This was always impossible with the government's own red lines but it demonstrates how even the biggest businesses were confused by all the implications of Brexit and assumed (wrongly as it turns out) that the government knew what it was doing and had their best interests in mind. Neither of these things was true.

But it occurred to me that if big, well connected, wealthy, profitable businesses like Airbus were mislead, what about the thousands of SMEs who have no links to No 10 and no time to consider what leaving the EU will mean for them?

Update:  A No 10 spokesman says (HERE) “We are confident that we are going to get a good deal, one that ensures that trade is as free and frictionless as possible, including for the aerospace sector,”

This will be a great comfort I'm sure. If meaningless platitudes are comforting to you, that is. Brexit is like throwing yourself out of a fifth floor window because you didn't like the wallpaper and saying you're confident someone will catch you. Of course you can't rule out someone walking below breaking your fall - but personally I wouldn't rely on it.