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Airbus threatens to leave Britain in case of no-deal Brexit

Airbus threatens to leave Britain in case of no-deal Brexit
The Associated Press

LONDON (AP) — Aviation giant Airbus is threatening to leave Britain if the country leaves the European Union without an agreement on future trading relations — a warning that caused alarm Friday among business leaders concerned about the pace of discussions ahead of next year’s exit.

The company, which employs about 14,000 people at 25 sites in the U.K., said it will “reconsider its long-term footprint in the country” if there is no deal. Airbus also says the currently proposed transition deal that runs through December 2020 is too short for the company to reorganize its supply chain.

“In any scenario, Brexit has severe negative consequences for the U.K. aerospace industry and Airbus in particular. Therefore, immediate mitigation measures would need to be accelerated,” said Tom Williams, CEO of Airbus Commercial Aircraft. “While Airbus understands that the political process must go on, as a responsible business we require immediate details on the pragmatic steps that should be taken to operate competitively.”

Williams said that the company had sought for 12 months to highlight the company’s concerns, without success.

“This is a dawning reality for Airbus,” he said. “Put simply, a no-deal scenario directly threatens Airbus’ future in the U.K.”

The statements were made in the company’s Brexit risk assessment and published late Thursday. But as the news was digested Friday, the anxiety was evident, coming as it does amid months of pleas to the government from businesses large and small who want some clarity about what future arrangements for trade will be with the EU.

This is especially important for a business such as that of Airbus. Modern manufacturing techniques result in plants with several locations, often in different countries, that specialize in specific parts. For instance, Airbus’ Filton production site is responsible for wing assembly.

Tariffs, which are non-existent for goods that move from one EU nation to another, could be applied each time those components cross and re-cross international borders.

Airbus, which was created in 1970 with the backing of several EU states, has been the shining example of how European cooperation could lead to success in business. Airbus is now the biggest rival to American giant Boeing, which for years dominated plane production.

That context, combined with Airbus’ sheer size, makes it an influential voice in the Brexit debate. It is the largest commercial aerospace company in the U.K., a leading commercial provider of military satellite communications and the biggest supplier of large aircraft to the Royal Air Force.

It also has a significant impact on supply chains, spending, by its own reckoning, some 5 billion pounds ($6.6 billion) with U.K. suppliers. That chain includes big companies like Rolls-Royce, but also small and medium sized players.

Darren Jones, the lawmaker representing the community where Airbus makes wings, attacked the government for listening to those who want the most hard line form of Brexit and “not to the businesses that employ thousands of British workers, including Airbus”.

“Thousands of skilled, well-paid jobs are now on the line because of the shambolic mess the government have created over the Brexit negotiations,” he said.

Prime Minister Theresa May’s government reacted quickly, but suggested there was no cause for worry. Her Downing Street office said that it was confident of getting a good deal and that “we do not expect a no-deal scenario to arise.”

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