At this time everyone familiar with the matter is aware of the Airbus COO Tom Williams interview in BBC 4 about Brexit and its consequences for Airbus UK held the past 21 June 2018. The ideas exposed during the interview were reinforced by the Brexit Risk Assessment Memorandum published by Airbus summarising the possible scenarios ahead, their impacts, and a series of measures to counteract possible damages for the Company or any of its interests.
Airbus has taken a clear position since the beginning in this regard: asking for support to the UK Government to cope with this exceptional situation, and being fully transparent about its concerns and the main issues at stake. Now the cards are on the table and, although there is still room for maneuver, by the end of March 2019 the Brexit will become real and all the desired agreements to minimize the impact in Airbus have to be clearly set at that time.
Unfortunately, time in politics has no the same pace as in business, so we have to ask ourselves: What if these agreements are not set in time or simply not reached? What if Hard Brexit impacts in Airbus UK with no cushion? Well, the Memorandum is crystal clear in this regard:
- No more investment in UK: future or even committed at present.
- No new future projects: even relocating current ones, and as a consequence
- Workload and workforce relocation or even reduction in ultimate extent.
There are many prospective Airbus countries more than willing to welcome these investments and projects to revitalize their economy and aerospace industry. But, what are the best positioned in this regard?
One of the pillars of Airbus UK is the space technologies linked to navigation, communications, observation, general equipment and so on. It is hard to say beforehand which countries are the best positioned in this regard, but Germany or France seem to be the best options apart from the UK itself to embrace space investments and projects due to their experience and current activities.
The other main pillar of Airbus UK activities, and probably the best known, is the wing manufacturing for the Airbus aircraft models. In this case the options are widely more open: Spain, China and even the US arise as possible options to be taken into account.
France and Germany remain as remarkable options in this regard due to they are the countries which have more weight concerning shareholding and top management presence. In addition, they both have FAL (Final Assembly Lines) within its borders and this is a great advantage from the logistics point of view.
China’s attractiveness is supported by unbeatable wage costs combined with the best aviation market forecast for the next decades. Furthermore, the huge interest it has in developing its aerospace industry can come together as well to lead to a win-win situation difficult to beat.
Spain, not at the same level of China’s wage costs, remains still attractive in the EU region and compared to France or Germany. Besides, it has proven experience in manufacturing Horizontal Tail Planes (HTP) for the Airbus aircraft models which for sure, have similarities, commonalities and manufacturing synergies with wings. And last but not least, Spain is a worldwide benchmark in composites manufacturing which is the present and the future of aircraft manufacturing in general and wing manufacturing in particular.
The US remains as an option to be assessed if the Company bets for increasing its presence there, maybe taking any advantage of its recent acquisition of Bombardier commercial aircraft arm and its plans to enlarge the Alabama site.
In my humble opinion there is not a single correct answer and probably, if the case arises, a mixture of the options exposed above and other ones will take place.
It’s a fact that UK based companies’ strategy will be affected by Brexit. Now the issue is to determine how and to what extent they are going to be impacted.
Finally, I would like to wish the best to my UK colleagues who are passing through a difficult and disheartening situation. And to encourage the UK leaders to face reality, assume their responsibilities, and take decisions to avoid the suffering and damages to their citizens.