22 Jun

Deal or no deal, Brexit is very risky for Airbus – and Wales

Airbus has been warning for a year that Brexit could pose major problems for the continuation of its UK operations.

Finally the warnings are being taken seriously following publication of its Brexit risk assessment.

The assessment finds that the aerospace sector faces additional major risks from Brexit compared to other industries.

Airbus adds that it is increasingly concerned by the lack of progress on the Brexit process.

If the UK leaves the European Union without a deal on 29 March 2019, it would leave the single market and customs union and there would be no transition phase. As a result, Airbus production in the UK would be likely to suffer severe disruption, and the company “would be forced to reconsider its investments in the UK”.

Even an orderly Brexit with a withdrawal agreement – while preferable to a no-deal scenario – would require a longer transition period than is currently planned: December 2020 is too soon for Airbus to implement the required changes to its extensive supply chain.

Airbus would “carefully monitor any new investments” in the UK and “refrain from extending the UK suppliers/partners base”.

In other words, Brexit presents serious risks to production, investment, employees, suppliers, partners – basically to the company’s very continuation on this island.

Wales would take a particularly severe hit.

As Egino warned early this year in a report for Jill Evans MEP[2], some 6,000 direct jobs in Broughton, Flintshire, would be at risk. And more elsewhere in Wales.

The future would be bleak for young people hoping for jobs and training in an area where such high-quality opportunities are very scarce. Not forgetting the impact on colleges that train Airbus’ apprentices, the supply chains and the wider local economy.

Airbus is not the only major company worried about their post-Brexit prospects.

Car maker blues

Like Airbus, car production is closely integrated across Europe. The Ford plant at Bridgend employs nearly 2,000 workers. Also like Airbus, it offers apprenticeships and university scholarships, to both male and female applicants.

A ‘no deal’ exit would be a disaster for the car industry, according to Steven Armstrong, Ford’s president for Europe, Middle East and Africa operations. He fears a hard border, with consequent delays and a hit to productivity.

The Unite union, which represents workers at the Bridgend plant, shares Ford’s belief that retaining Single Market access is vital.

An unaffordable career

Then there’s the food and drink industry. Much more dispersed, of course, but involving an estimated 240,000 people, making it in total as a sector Wales’ biggest employer.

Some 60% of Welsh exports go to the EU (not counting the rest of the UK). The proportion is higher for agri-exports – over 90% for some meat exports.

Maintaining exports at current levels will be very difficult if the UK exits without a deal and has to trade under World Trade Organisation (WTO) rules.

WTO tariffs would nearly double export prices for some Welsh agri-foods, with no extra benefit to Welsh producers – if indeed they are not priced out of current markets.

Farming itself could become an unaffordable career option, as Welsh farmers face the prospect of losing up to 80% of their income after payments under the Common Agriculture Policy (CAP) end.

Brexit poses many more problems for Wales, some affecting young people particularly hard, as outlined in this easy-access report in the “Leaving the EU: Impact on Wales” series: Leaving the EU: The Impact on Wales – Young People


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