Airbus SE’s Chinese arm is clamoring for high-value work building wings currently made in the U.K. as Brexit threatens to blunt the country’s competitive edge, according to the group’s top British executive.
While the design and manufacture of Airbus wings represents one of the “crown jewels” of U.K. aerospace, every part is exported into the European Union and would be affected by any additional border friction and customs costs, Airbus U.K. Senior Vice President Katherine Bennett told British lawmakers Tuesday.
“We do build wings in China now, and believe you me they’re knocking at the door as a result of the situation that we’re in in this country,” Bennett said in front of Parliament’s business, energy and industrial strategy committee. Other Airbus divisions would “dearly love” the contracts, she said.
Britain’s place in the customs union, single market and European Aviation Safety Agency helps Airbus send components seamlessly between plants across the continent, Bennett said. While the Toulouse, France-based company has no plans to reduce its U.K. footprint, Brexit could create an “extra burden” when attracting investment, she told lawmakers.
Airbus has a working group dedicated to minimizing Brexit impacts, seeking to avoid extra customs paperwork and bureaucracy following the split, the executive said. Britain’s divorce from the bloc is often “the number one thing” counterparts in Paris, Brussels, Milan and Madrid want to talk about, she added.
Britain is one of Airbus’s four home nations along with France, Germany and Spain, and accounts for a little more than 10 percent of the workforce, or 15,000 people. U.K. sites include the giant Broughton plant in north Wales, which makes wings for all of the company’s jets. It also has a wing-design facility in Filton, southwest England, as well as space and satellite factories in Portsmouth on the south coast and at Stevenage near London.
ADS Group, which represents Britain’s aerospace and defense sector, said in a written submission to the committee that the industry could take a 1.5 billion-pound ($2 billion) hit from extra customs expenses incurred after Brexit.
The expense would come from more complex border checks if British and EU processes do not remained harmonized. Additional burdens such as paperwork on proof of origin, regulatory compliance, storage and delays could add 15 percent to transaction costs, while the tariff-free status of aerospace means free-trade deals wouldn’t be of much benefit in offsetting the sum, it said.