Friday, 26 February 2016

Airbus should shut up about Brexit

Airbus Group expects the competitiveness of its British operations to fall if Britons vote to leave the European Union in a referendum, potentially threatening the scale of the planemaker's operations in the country.

The support of France-headquartered Airbus, which employs 16,000 people in Britain, for those campaigning alongside Prime Minister David Cameron to stay in the EU comes a day after a group of company bosses warned that a vote to leave in a June 23 referendum would put the economy at risk.
"If Britain leaves, I cannot imagine that this would have positive consequences for our competitiveness in Britain," Chief Executive Tom Enders told a news conference at the aerospace group's annual results on Wednesday.
This is classic FUD from a loudmouth CEO who doesn't know very much about Brexit. Leaving the EU will have little impact on Airbus operations.

Enders would agree with me that Airbus make aircraft to the very highest available standards. In my many years at Airbus, I never saw any corner cutting - and design leads are probably some of the most risk averse people I have ever met. Airbus people are highly conscientious. They know better than anyone that overlooking or neglecting the fine details can and does cost lives.

In this we can say that if we leave the EU there will be no deviation from those global standards and regulations that Airbus complies with. The reputation of Airbus safety depends on it. It rather shoots down the Eurosceptic claim that we can deviate from regulations and have weaker ones of our own - and we wouldn't be able to export to Toulouse if those standards were not met in any case. Therefore, the claim that we don't know what out looks like is just a piece of empty rhetoric.

We also know that, at the very least, there will be no EU tariffs. That Brexit scenario is highly implausible, not least because nobody wants it - especially not Airbus who are both politically active and influential at the EU level. In short, the business environment does not change.

Where we eventually do get more control by leaving the EU is over labour laws, in which case we might well start to see a more dynamic labour market with employment laws more befitting our distinct working culture. Enders should welcome that. Enders also ought to know better than anyone that visaless access to France was in place before the EU and will be there after we leave.

At worst, we can say Brexit doesn't impact Airbus at all, and at best we can say our trading agility means that we can get better terms on behalf of Airbus UK for imports of the many thousands of small components and materials that go into Airbus aircraft. Airbus purchasing would be the first to tell Enders that there are a number of instances where Airbus suffers from the EU common external tariff.

In any case, if the EU was the ideal trading environment he would not be off-shoring repair design work to India. In that Enders should come clean. He knows that because the Indian aerospace industry is only taking off with the assistance of UK expertise - and every design solution they produce is audited and checked by Airbus UK and their trusted suppliers, simply because the work is not initially up to scratch. In or out of the EU Enders needs Britain, it's schools, colleges and aerospace expertise.

Moreover, Airbus has for a long time been salami slicing the UK operations as Toulouse has almost complete cultural dominance within the company - and that's as much to do with the French government as anything. It's a French company through and through. It should also be noted that the A380 is as much a politically inspired aircraft as anything else and were Airbus completely free of political control, the A380 would have been dropped as a commercial non-starter. This is not a company that has ever shown much loyalty to Britain.

In the end, Airbus will have to learn to live with what ever we choose because they don't have the luxury of ditching Britain. More to the point, Airbus enjoys excellent relations with our Department for Business, Enterprise and Regulatory Reform. It's in Airbus's commercial interests to work with them to look closely at the opportunities a free trading UK could bring to Airbus as a whole. It could be a way to source cheaper materials for the whole operation.

In any case, Airbus has operations all over the world including Mobile and Wichita and many other places noted for not being in the EU. Different cultures and regimes are part of the global reality that all multinationals face. Airbus is not special in that regard.

In this we are not looking at the opinion of an informed trade analyst or indeed an especially competitive operator. What we are looking at here is Tom Enders's own personal political preference which is no more valid than yours or mine.

It may be that Brexit throws up a few unexpected challenges on the way, but Enders knows as well as I do that Airbus UK respond to change well, and I am happy to show him around Filton and introduce him to some of the many people who responded to the A380 rib foot design flaw with dedication, skill and good humour. If he thinks he's going to find that anywhere else, he is quite welcome to try. He will fail.

And while he's at Filton we could have a little drive around the airfield for a history lesson. The picture above illustrates that Bristol doesn't need the EU to conquer the skies - and never did. Who governs us is not the business of Airbus - and Enders should not be using Airbus to advance his own personal political beliefs. 

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