Airbus warns could leave UK if no Brexit deal

23 June 2018: Aviation giant Airbus has warned it could pull out of Britain if it leaves the European Union without a deal, upping the pressure Friday on Prime Minister Theresa May to make progress in Brexit negotiations with Brussels.

The European group, which directly employs nearly 15,000 people, warned that crashing out of the bloc would be "catastrophic" and force it to consider its investments.

"Put simply, a 'no deal' scenario directly threatens Airbus' future in the UK," said chief operating officer Tom Williams.

May's government holds out the possibility of walking away as a negotiating tactic, but says she expects to get a deal before it exits the bloc on March 29 next year.

"We have made significant progress towards agreeing a deep and special partnership with the EU to ensure trade remains as free and frictionless as possible, including in the aerospace sector," a spokeswoman said.

However, talks are stalled on the issue of the Irish border and Britain's indecision over what it wants.

EU leaders, who will meet May at a summit next week, have warned that time is running out, while Brussels has urged them to step up preparations for no deal.

- 'Livelihood smashed' -

Britain intends to leave the EU's single market and customs union to forge its own independent trade policy and end free movement of labour.

In a Brexit risk assessment, Airbus said if plans for a transition deal failed and this break happened in March, it "would lead to severe disruption".

"This scenario would force Airbus to reconsider its investments in the UK, and its long-term footprint in the country," the report said.

Airbus builds wings and landing gear for commercial aircraft in Britain and also has a space technology centre in the country, supporting 117,000 jobs overall.

In Wales, where one of the largest of more than 25 Airbus sites is based, the devolved government run by the UK's opposition Labour party said the warning was "extremely worrying".

Labour's UK Brexit spokesman Keir Starmer said May's "reckless decision to keep no deal on the table and to rule out a customs union or strong single market deal after Brexit is putting jobs and the economy at risk".

Former Wales minister Stephen Crabb, a member of May's Conservative party, said it was a "wake-up call".

Steve Turner, of Britain's biggest trade union Unite, added: "People voted to leave the EU, but didn't back leave to lose their jobs and see their livelihoods smashed on the cliff face of a 'hard Brexit'."

However, Ian Paisley Jnr, an MP for the Brexit-supporting Democratic Unionist Party (DUP) which props up May's government, said it was a "scare story".

"The EU needs a deal and the UK is going to get a deal!"

A string of airlines, banks and other corporate household names have already activated their contingency plans to move jobs or restructure because of Brexit.

- Transition 'too short' -

The government has agreed a post-Brexit transition period that will last until December 2020, to allow time for a new economic partnership to be struck with the EU.

But Airbus said this was "too short" for a new agreement to be made and "too short for Airbus to implement the required changes with its extensive supply chain".

It said it would "carefully monitor any new investments", and Williams admitted that "in any scenario, Brexit has severe negative consequences".

May's spokeswoman said there would be talks with Airbus later on Friday, adding: "There is an open dialogue there and we continue to talk to them."

Carmaker BMW also warned that uncertainty was affecting the investment climate.

"If we don't get clarity in the next couple of months we have to start making those contingency plans -- which means investing money in systems that we might not need, in warehouses that might not be usable in the future, in effectively making the UK automotive industry less competitive than it is in a very competitive world right now," Ian Robertson, special representative of the BMW Group in the UK, told the BBC.