EU Referendum: The result and aftermath...

[pemma]

I recall there being a documentary on the Airbus A380. It mentioned that due to it being such an ambitious project it was necessary to have people in a few different countries working on it, which included Britain, France and Germany. If the British government are unable to say what kind of relationship we'll have with France and Germany after Brexit, how can a business like Airbus continue to operate in the same way as it has been doing?

 

[Groningen]

I have heard that the A380 was not the success that Airbus had hoped. Not enough orders.

 

[EM2]

This is Airbus's actual memorandum:
http://www.airbus.com/company/worldwide-presence/uk.html#Economy

A no deal Brexit must be avoided, as it would force Airbus to reconsider its footprint in the country, its investments in the UK and at large its dependency on the UK (with many potential undesirable consequences such as repatriating competencies, patents, revisit Research and Development footprint, reduce UK’s weight in the supply chain etc.…). Given the “No deal/Hard Brexit” uncertainties, the company’s dependence on and investment in the flagship “Wing of Tomorrow” programme would also have to be revisited, and corresponding key competencies grown outside the UK. This extremely negative outcome for Airbus would be catastrophic. It would impair our ability to benefit from highly qualified British resources, it would also severely undermine UK efforts to keep a competitive and innovative aerospace industry, while developing high value jobs and competencies.
...
Until we know and understand the new EU/UK relationship, Airbus should carefully monitor any new investments in the UK and should refrain from extending its UK suppliers/partners base. Customs Union and a harmonized regulatory framework with the EU on aviation are the two major issues for Airbus that will determine its future strategy in UK, and they need to be addressed urgently. The critical issues amongst others are the increased cost base due to trade procedures, airworthiness efforts and difficulty to move people. For trade procedures (non-tariff cost) alone, an OECD study estimates the range of the recurring extra cost between 2% and 15% of overall trade. This translates to up to €1B per year to be borne by the Airbus UK-related aerospace ecosystem.

I have tried to quote the whole text but it just pastes as a solid block with no formatting, and is thus very difficult to read.

 

[Dentonian]

It would take Airbus years to set up from scratch a new wing building facility elsewhere (and cost a fortune). Remember that they would have to continue full production at the existing facilities in order to meet their delivery schedules, so they couldn't transfer equipment or personnel from the existing plants. A break in production and consequent delivery delays would cost them hundreds of millions of dollars in compensation to airlines (and probably loss of business to Boeing). The shareholders of Airbus would have no desire to have to go to this expense (and the expense of closing the existing facilities) and there could not be any government aid under EU rules (as this would not be a new product which would qualify under the repayable launch aid rules).

As mentioned subsequently, A380 production is nearing an end, and the vast majority of Airbuses built/sold are narrowbodies. They already have a major assembly line in Tianjin, China and iirc, they even have one Stateside! Looking at the commercial aviation market globally, it wouldn't surprise me if they weren't already planning to build Airbuses in India. Additionally, whilst I have been raising the spectre of being priced out of foreign travel if EHIC goes down the pan, I'd not even thought (until mentioned on QT last night) about the cost of individual visas!

 

[Mag_seven]

Additionally, whilst I have been raising the spectre of being priced out of foreign travel if EHIC goes down the pan, I'd not even thought (until mentioned on QT last night) about the cost of individual visas!

Still we're "taking back control" aren't we.

 

[pemma]

As mentioned subsequently, A380 production is nearing an end, and the vast majority of Airbuses built/sold are narrowbodies. They already have a major assembly line in Tianjin, China and iirc, they even have one Stateside! Looking at the commercial aviation market globally, it wouldn't surprise me if they weren't already planning to build Airbuses in India. Additionally, whilst I have been raising the spectre of being priced out of foreign travel if EHIC goes down the pan, I'd not even thought (until mentioned on QT last night) about the cost of individual visas!

That's the Brexiteer's plan - make it off putting to go abroad so you spend all your money in Britain.

 

[mmh]

As mentioned subsequently, A380 production is nearing an end, and the vast majority of Airbuses built/sold are narrowbodies.

I don't know about the plant near Bristol, but the Airbus plant at Broughton doesn't just make wings for A380s.

Additionally, whilst I have been raising the spectre of being priced out of foreign travel if EHIC goes down the pan, I'd not even thought (until mentioned on QT last night) about the cost of individual visas!

It wouldn't be a proper Question Time unless they spoke some stuff and nonsense about it all. We're not in Schengen right now and already have visa-less travel to within the Schengen zone (just like Canada, the USA and any "first world" non-Schengen country you can think of). That won't change as a result of leaving the EU. What may change things is if the planned "ETIAS" electronic visa system (similar to the US ESTA system) is introduced for travel from outside the Schengen zone from visa exempt countries. If it does, they've already said it will be about 7 euros. What I've not heard is what they plan for the remaining EU members who aren't in Schengen, for example Ireland.

 

[Dentonian]

I don't know about the plant near Bristol, but the Airbus plant at Broughton doesn't just make wings for A380s.

I know that - I was simply illustrating that the alternative facilities for narrow bodies are already partially in place

 

[WelshBluebird]

That won't change as a result of leaving the EU.

You don't know that though. It is highly likely it won't change, but until that is confirmed we just don't know.
A "no deal" Brexit, as is often talk about, would absolutely change it.

 

[Dentonian]

I don't know about the plant near Bristol, but the Airbus plant at Broughton doesn't just make wings for A380s.



We're not in Schengen right now and already have visa-less travel to within the Schengen zone (just like Canada, the USA and any "first world" non-Schengen country you can think of).

We might not need visas but it aint arf a faf arriving in Schiphol 20+ mins late, legging the length of Terminal D to join a long queue at passport control, begging (successfully) to queue jump thinking you are going to miss your connection; going up a floor and legging it back along Terminal D arriving at your gate just at the official time of gate closing, only to find you had 15 minutes to spare because you are reboarding exactly the same plane you got off 40 minutes earlier! But yes, that is irrelevant to Brexit per se - more our insistance of only being "associate" members back in the 70s.

 

[AM9]

I know that - I was simply illustrating that the alternative facilities for narrow bodies are already partially in place

But Airbus's developing market is also in the A350 variants which are making big dents in the Boeing 777 and 787 orders. The manufacturing for those is being expanded to China and the US in order to influence local markets there. The wing plant wouldn't be able to supply everywhere so new design wings can be launched outside the UK Broughton plant leaving it to wither with a declining order book, (which would at least mitigate against the queues at UK ports).

 

[EM2]

BMW joins the party.
https://www.bbc.co.uk/news/business-44582831?ocid=socialflow_twitter

The car giant BMW has followed plane maker Airbus in warning of the adverse consequences of Brexit.

BMW UK boss Ian Robertson told the BBC it needed clarity by the end of the summer. It makes the Mini and Rolls Royce in the UK.
...
Mr Robertson said he needed to know what the government's preferred position is on customs and trade within months or his company - and the UK's - competitive position could be harmed.

"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... which means making the UK less competitive than it is in a very competitive world right now," he said.

He said it was a decisive issue that ultimately could damage his industry.

 

[EM2]

And here come Unipart:
https://www.ft.com/content/ee84acd0-7631-11e8-a8c4-408cfba4327c

John Neill, chief executive of Unipart, a car parts supplier that employs 6,000 people in Britain, said frictionless supply chains were crucial for all businesses in the UK. “The implications for the British economy [of a “no deal” Brexit] are very, very severe and could result in busloads of jobs disappearing into Europe,” he told the Financial Times.

 

[Mag_seven]

Don't worry the cavalry will soon be coming over the hill on their unicorns armed with their blue passports....

 

[Puffing Devil]

Don't worry the cavalry will soon be coming over the hill on their unicorns armed with their blue passports....

Along with the trade deals that will replace all the lost jobs 1000s of times over!

 

[AM9]

Along with the trade deals that will replace all the lost jobs 1000s of times over!

Yes, picking fruit, packing imported goods for white van distribution, cleaning care homes, the jobs will be endless, and the unemployed Airbus & BMW trained staff will flocking to them. Still keep your dream of taking control back, it will help you to sleep at night.

 

[fowler9]

Just been chatting to a guy below the line on a newspaper website who said that even if Airbus do leave not everyone will loose their jobs because any talented engineer will still be able to leave the country and follow the jobs. Is it just me that is struggling to see the benefit of Brexit in talented engineers still being able to leave?

 

[Puffing Devil]

Yes, picking fruit, packing imported goods for white van distribution, cleaning care homes, the jobs will be endless, and the unemployed Airbus & BMW trained staff will flocking to them. Still keep your dream of taking control back, it will help you to sleep at night.

Me sleep at night? I think you misunderstood my post

 

[NSEFAN]

Just been chatting to a guy below the line on a newspaper website who said that even if Airbus do leave not everyone will loose their jobs because any talented engineer will still be able to leave the country and follow the jobs. Is it just me that is struggling to see the benefit of Brexit in talented engineers still being able to leave?

No, it's not just you. We need high-paid employees like those in our economy to pay taxes to prop up the NHS etc. If the government must pursue Brexit then it needs to do something to help retain such jobs or create new ones to replace those that are lost.

 

[Wivenswold]

BMW have just made a similar Brexit announcement. Just waiting for the penny to drop with Brexiteers that they've been had all along.

You see, the newspapers want Brexit to ensure they have a tighter grip on Westminster. If we're in the EU in April 2019 then new tax laws come in make it more difficult for any company trading in the EU to avoid paying their share of tax. Now here's a strange thing, all the newspapers that are not domiciled in the UK for tax purposes support Brexit and are urging the Government to "get on with it". Makes a mockery of the cries of "Traitor" when you're blaming homeless foreigners for draining a system you're not even paying into.

That's before we get to Russian interference. JJ Patrick's excellent book "Alternative War" maps the connections between alt-right campaigners and Russian Government officials. Putin obviously sees the EU and NATO as a threat to his supremacy. So part of his now infamous "non-linear war" strategy is to cause chaos, confusion and destabilization in Europe via social media and news channels like RT. Back, then stoke up the far-right then sit back and watch as countries tear themselves apart.

A perfect example of Putin's work can be seen with Trump's unlikely election victory. Stoke-up the intellectually vulnerable, flood the internet with Kremlin-friendly fake news under a tub-thumping, pro-patriot banner, throw in a couple of slogans that sound impressive and sit back to watch the chaos.

It's all in plain sight. No one thought it strange when the Kremlin-backed RT News offered Farage a job and yet it really should have raised more questions.

Sadly, here in the UK we fell for it.

 

[Jonny]

The problem with the likes of bmw, airbus, etc... as well as the likes of nissan etc... are massive subsidy junkies who whinge when anything doesn't go their own way and threaten to shut down. Their manipulation of the system is so transparent that no-one notices.

Also, for aerospace, it doesn't matter where you are as long as the specifications are met. After all, you have to be able to check pretty much everything once in service. So, any supply chain level issues are likely to be minimal. Also, perhaps they might be linearised.

In fact, what the remainers are scared of is that Britain will turn into a tax haven that abstracts corporation tax-able activity out of the eu, and causes the european social contract to collapse faster than a house of cards. In fact I would love a hard Brexit because it would leave a massive hole in the eu's finances that would cause permanent devastation - even without a US/eu trade war - whereas Britain would bounce back quickly.

 

[Howardh]

The problem with the likes of bmw, airbus, etc... as well as the likes of nissan etc... are massive subsidy junkies who whinge when anything doesn't go their own way and threaten to shut down. Their manipulation of the system is so transparent that no-one notices.

Better shut down the railways then and put all the staff on the dole. How much is the subsidy in £billions again?

 

[WelshBluebird]

Also, for aerospace, it doesn't matter where you are as long as the specifications are met

Of course it matters.
If your whole operations involves building parts in different places, having components for those parts shipped to where they are needed in a "just in time" fashion, and then transporting those over borders, then any additional obstruction in regards to customs checks etc etc will have a massive impact.

 

[WelshBluebird]

In fact, what the remainers are scared of is that Britain will turn into a tax haven that abstracts corporation tax-able activity out of the eu,

Errr yes of course I am scared of this country becoming a tax haven! Any of us who support the idea of public services funded by taxation should be terrified of that idea. You say it would "cause the european social contract to collapse faster than a house of cards" and "leave a massive hole in the eu's finances" but wouldn't it not also do the same to us if we were to become a low tax state where companies can plonk themselves to avoid paying tax?

 

[Western Lord]

But Airbus's developing market is also in the A350 variants which are making big dents in the Boeing 777 and 787 orders. The manufacturing for those is being expanded to China and the US in order to influence local markets there. The wing plant wouldn't be able to supply everywhere so new design wings can be launched outside the UK Broughton plant leaving it to wither with a declining order book, (which would at least mitigate against the queues at UK ports).

The wings for ALL Airbus airliners are designed and built in Britain. The plants in China and The US are merely assembly operations and do not manufacture anything, they take the various bits from the (mostly) European manufacturing plants. There is no new Airbus in the pipeline so there is no likelihood of a new design wing anytime soon. The only source of wings for Airbus is the UK unless they spend a fortune in duplicating what they already have, which would not please the shareholders. As for production of wings being in China or the US, would it really be a good idea to, effectively, hand over control of Airbus production to the Chinese or US governments? One can imagine Trump agreeing to an Airbus wing plant in the US as long as it's run by Boeing!

 

[Jonny]

Errr yes of course I am scared of this country becoming a tax haven! Any of us who support the idea of public services funded by taxation should be terrified of that idea. You say it would "cause the european social contract to collapse faster than a house of cards" and "leave a massive hole in the eu's finances" but wouldn't it not also do the same to us if we were to become a low tax state where companies can plonk themselves to avoid paying tax?

The trick is to position yourself 'just right' so that you use other countries' activity to provide your public services at much lower cost to your own taxpayer. It's one of many aspects of Brexit that have the EU27 scared stiff.

 

[WelshBluebird]

The trick is to position yourself 'just right' so that you use other countries' activity to provide your public services at much lower cost to your own taxpayer. It's one of many aspects of Brexit that have the EU27 scared stiff.

Personally, I still disagree with a low tax economy, but lets take what you say at face value. Do you actually think this government has the ability to position itself "just right"? Really honestly now? Considering they can't seem to do anything with competence.

 

[EM2]

The trick is to position yourself 'just right' so that you use other countries' activity to provide your public services at much lower cost to your own taxpayer. It's one of many aspects of Brexit that have the EU27 scared stiff.

And which countries have managed to do that?

 

[AM9]

... There is no new Airbus in the pipeline so there is no likelihood of a new design wing anytime soon. The only source of wings for Airbus is the UK unless they spend a fortune in duplicating what they already have, which would not please the shareholders. ...

Depending on how much background IP there is in the wings, the designs can be moved to wherever the costs are the lowest. Part of Airbus's current position is that if the UK walks away form a deal, the additional costs of including the UK in any transnational production arrangement will rise with border disruption alone, that is aside from any levied costs that either the EU or the UK might introduce. Shareholders would see that as a dead loss, factories get replaced/relocated often enough, and the more valuable highly skilled elements of Aerospace workforces are generally quite mobile.

 

[Western Lord]

Depending on how much background IP there is in the wings, the designs can be moved to wherever the costs are the lowest. Part of Airbus's current position is that if the UK walks away form a deal, the additional costs of including the UK in any transnational production arrangement will rise with border disruption alone, that is aside from any levied costs that either the EU or the UK might introduce. Shareholders would see that as a dead loss, factories get replaced/relocated often enough, and the more valuable highly skilled elements of Aerospace workforces are generally quite mobile.

Airbus have one source of wings. They would need to continue full production at the existing UK facility in order to meet their delivery schedules. They could not transfer equipment or personnel from the existing operation without jeopardising this, and that would result in big compensation payments to airlines and loss of business to Boeing. Airbus would have to identify a site, build the factory, equip it from scratch, recruit and train staff and bring production on stream, all the while continuing full production at the UK plant with a presumably increasingly demoralised workforce who could see the exit door approaching. We are not talking about a baked bean tin factory, this is very high tech. stuff and is actually a plant that manufactures things, not just an assembly operation that screws together bits made elsewhere, which is much easier and cheaper to set up. If history is anything to go by there would be endless haggling between the French, Germans and Spanish over where the plant should be sited, let alone financing and building the thing.