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Abu Dhabi, UAEMonday 15 October 2018

Airbus chief hits out at UK government splits over Brexit

A particular worry is if the UK is no longer a member of the European Aviation Safety Agency, Tom Enders says

Airbus Group chief executive Tom Enders ramped up criticism of the UK government's handling of Brexit negotiations, and said situation was "discomforting" for the European planemaker. Hannah McKay / Reuters
Airbus Group chief executive Tom Enders ramped up criticism of the UK government's handling of Brexit negotiations, and said situation was "discomforting" for the European planemaker. Hannah McKay / Reuters

Airbus chief executive Tom Enders ratcheted up his criticism of the UK government over its handling of Brexit talks as Prime Minister Theresa May prepares to hold a key meeting of ministers aimed at thrashing out a common position on the issue.

May’s administration has “no clue or consensus on how to execute Brexit without severe harm,” Enders said at a briefing in London on Friday. The confusion has wasted months of negotiating time and created “a discomforting situation” for the planemaker, he added.

The broadside comes after Airbus last month delivered the starkest warning yet from a major company about the perils of Britain leaving the European Union’s single market and customs union without a transition deal. The group warned of “severe disruption” to UK production that would force it reconsider its investments and long-term presence in the country.

Enders said in his latest comments that the UK should at least stay in the customs union and various regulatory bodies and agree to abide by European Court of Justice decisions.

“This is the minimum I think to keep the business,” he said. “Not harmless, but to minimise the damage to business.” The CEO added that he was speaking out “not because we want to play politics” but because the company has a duty to stakeholders “to be truthful about the consequences.”

Enders said a particular worry is that if the UK is no longer a member of the European Aviation Safety Agency the certification of thousands of parts in its supply chain could be jeopardized, something that may “eventually lead to a standstill in production.” He also echoed concerns from UK aerospace lobby group ADS that planes could even be grounded as safety approvals run out.

May’s top team of ministers will attempt to finalize the UK blueprint for its partnership with the EU at a crunch meeting at her Chequers country residence, but a group of seven pro-Brexit ministers are pushing for her to tear up her plans. Rebel cabinet members met in British Foreign Secretary Boris Johnson’s offices late Thursday to coordinate their opposition to the premier’s policy on linking tariffs and goods regulations closely to those of the bloc.

Airbus employs 14,000 people at 25 sites in Britain and supports about 4,000 UK companies and more than 100,000 jobs in the supply chain, the Toulouse, France-based company said in a Brexit risk-assessment document last month.

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Read more:

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A hard Brexit could force the group, which operates a “just in-time” manufacturing procedure, to stockpile around 1 billion euros ($1.2 billion) in parts to help circumvent snags caused by new customs rules, with each week of delay translating into 1 billion euros in lost revenue, it estimates.

Airbus commercial-aircraft chief Guillaume Faury said that in order to stockpile sufficient parts to last three months and provide the company with a suitable “buffer,” its suppliers need to increase production by more than one-third now. That’s a cause for concern as those companies are already stretched by production ramp-ups.

The manufacturer has repeatedly warned about a risk of Brexit sidelining the UK when it comes to future aerospace projects. Its German operation is working with French warplane specialist Dassault Aviation on a next generation of European fighter aircraft, rather than selecting its historic partner in combat jets, London-based BAE Systems.

Enders had 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.