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Airbus warns no-deal Brexit could see it leave UK

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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 said the warning was not part of “project fear”, but its “dawning reality”.

Airbus employs about 14,000 people at 25 different sites in the UK.

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 29 March 2019.

Special partnership

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 Prime Minister Theresa May said: “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,”

A Welsh government spokesperson said the Airbus announcement was “extremely worrying”.

“We have repeatedly warned that the UK cannot take the huge economic risk of cutting ourselves adrift from the single market and customs union. Particularly in the case of manufacturing sectors, which in Wales are so important in providing high-paid, high-skilled jobs.”

The BBC’s business editor, Simon Jack, says the Airbus announcement reflects “growing exasperation” over Brexit in the UK’s boardrooms.

He adds that Business Secretary Greg Clark has been similarly exasperated by companies’ tendency to complain to him about the issue, only to soften their tone when faced with the prime minister.

“He, I think, will be delighted that a company with Airbus’s footprint has gone as public as this,” our business editor said.

Severe disruption

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, which makes wings for the A320, A330/A340, A350 and A380 passenger planes in the UK, also said the current planned transition period, 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.

Tom Williams, chief operating officer of Airbus Commercial Aircraft, said in “any scenario”, Brexit had “severe negative consequences” for the UK aerospace industry and Airbus in particular.

Without a deal, he said Airbus believed the impact on its UK operations could be “significant”.

“Put simply, a no-deal scenario directly threatens Airbus’ future in the UK.”

Mr Williams told the BBC’s Today programme that Airbus was currently working on developing the “next generation” of aircraft wings in the UK.

“We are seriously considering whether we should continue that development or whether we should find alternative solutions,” he added.

Airbus UK’s senior vice-president, Katherine Bennett, said the company had “huge concerns” about a possible no-deal Brexit: “We’re very fearful there will be chaos at the borders and we want our factories to be able to operate as smoothly as possible.”

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Getty Images

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Airbus makes wings for the A380 and other models in the UK

Conservative MP Stephen Crabb said the warning from Airbus should be a “wake-up call”.

Mr Crabb tweeted: “The enormous Airbus factory in North Wales is one of the jewels in the crown of UK manufacturing. This is a wake-up call. A pragmatic, sensible Brexit that protects trade & jobs is vital.”

And shadow Brexit secretary Sir Keir Starmer tweeted: “If proof was needed that the PM’s Brexit red lines need to be abandoned (and fast), this is it.”

Frictionless trade

The warnings from Airbus echo comments made on Wednesday by the boss of Siemens in the UK.

Jürgen Maier said the UK should remain in the customs union after Brexit unless there was a “proper alternative”.

Last week, Paul Drechsler, the outgoing president of the CBI, said some parts of industry in the UK faced extinction if the country left the EU customs union.

Paul Drechsler said car firm bosses had come to him saying the industry would suffer unless there was “real frictionless trade”.

Mr Drechsler also said there was “zero evidence” that trade deals outside the EU would provide any economic benefit to Britain.

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