Airbus warns UK investment in danger in no-deal Brexit

Bloomberg

Airbus SE threatened to pull its UK investments if Britain walks away from the European Union without a deal, upping the stakes for Prime Minister Theresa May as she fights to deliver a Brexit that won’t wreck the country’s economy.
In the starkest warning yet from any major company, the aerospace giant said that a departure from the single market and customs union without a transition agreement would lead to “severe disruption and interruption of UK production.” Airbus, based in Toulouse, France, would be forced to “reconsider its investments in the UK, and its long-term footprint in the country.”
“This is a dawning reality for Airbus,” Tom Williams, chief operating officer of Airbus Commercial Aircraft, said.
“Put simply, a No Deal scenario directly threatens Airbus’ future in the UK.”
The remarks further hem in May, whose proposals aimed at keeping trade as easy as possible after the divorce have been repeatedly knocked back. The European Union is stepping up its rhetoric about the likelihood of a chaotic divorce and is warning companies that they need to prepare for the worst. Anti-Brexit lawmakers, meanwhile, seized on the announcement as more evidence that the government’s approach to the split is harming the economy.
The Brexit debate has focussed in recent weeks on internal power struggles — fights in Parliament, fights in the Cabinet and political games about
who would be in charge in a no-deal scenario. Airbus’s warning is a reminder of what failing to reach a negotiated outcome would mean for jobs and ordinary people.
For the first time in two years, it’s the EU side rather than the UK that’s making most noise about the chances of a messy walk-out. The warning from Airbus — a company that offers high-quality jobs across Britain and supports a massive supply chain with its wing-making operation — comes as May continues to fight with her own government about the kind of Brexit deal she will seek.
Britain leaves the bloc in March next year.
Companies have been warning they need clarity and urging the government to take decisions. But this announcement is the strongest yet and goes beyond the usual platitudes.
May heads to Brussels later this month for a summit that was meant to be a defining moment in the negotiations and the last gathering of leaders before the divorce deal is signed off in October. “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,” a government spokesperson said.
EU leaders will also remind Britain at the summit that if a Brexit deal isn’t struck, there will be no transition — the grace period that businesses are counting on for the first 21 months after the split.
Even if May does secure the planned transition, it’s “too short” for Airbus to make “required changes with its extensive supply chain,” the company said, adding that it would carefully monitor any new investments in the UK and refrain from extending its British supplier base. Other companies are also starting to move, with auto manufacturing one of the crucial industries at risk. Jaguar Land Rover is moving production of its Land Rover Discovery SUV from its historic Solihull facility to Slovakia by early next year and will lay off workers.
As well as employing 14,000 people at 25 sites in Britain, Airbus has more than 4,000 UK suppliers and supports more than 100,000 jobs in its British supply chain.
Airbus CEO Tom Enders pledged in February that Airbus would retain its British operations “long into the future’’ in what seemed then to be a turnaround from previous attacks on the planned divorce.