CEO’s say they have to plan in 4 or 5 different scenarios because of HM Governments prevarication
An Airbus employee performs an inspection of the construction of a wing for an Airbus A350 aircraft at Airbus’ wing production plant near Broughton in north-east Wales.
LONDON— Airbus SE , one of Europe’s biggest companies, sharpened its threat to move operations out of the U.K. if politicians couldn’t negotiate a deal to leave the European Union in an orderly fashion.
The verbal attack from outgoing Chief Executive Tom Enders—a frequent and outspoken critic of Brexit—adds a significant dose of fresh pressure from the business community, amid a standstill in London over how to move forward with stalled Brexit plans. The U.K. is slated to leave the EU on March 29, but hasn’t yet agreed to a dealwith the bloc—threatening to upend the free flow of goods across the English Channel.
Mr. Enders on Thursday called the lack of clarity for businesses a “disgrace.” Airbus, which makes the wings for all of its planes in the U.K. and employs 14,000 in the country, said a disorderly breakup would threaten its continued presence here. “Please don’t listen to the Brexiteers’ madness, which asserts that, because we have huge plants here, we will not move and we will always be here,” Mr. Enders said in a message to employees.
Brexit proponents have acknowledged short-term pain should the U.K. exit from the EU without a deal. Some euroskeptics in Prime Minister Theresa May’s party have said fears of such a clean break are overdone, and Britain will remain an attractive place for big companies to base operations no matter what.
Industry bosses have become increasingly frustrated by the slow progress being made in Brexit talks. After rejecting a recently agreed-upon Brexit deal between Mrs. May and Brussels, lawmakers in the U.K. parliament continue to fight among themselves about how the country should move forward with the process.
It is unclear when that will end. Paralysis in Parliament raises the possibility that Brexit might be delayed or that the U.K. could crash out of the EU with no-deal, something that many chief executives say would cause huge disruption.
With little more than two months to go before that deadline, companies are ratcheting up their Brexit preparations. Many big manufacturers are stockpiling goods and reserving storage space—anticipating border delays should there be no deal.
Ford Motor Co. said Thursday it was still counting on a negotiated exit, but that a no-deal break could potentially cost it $800 million in 2019. It cited new tariffs that would come into effect without a deal, further depreciation of the British pound, new border restrictions and a generally deteriorating economic outlook.
Breaking the Brexit Deadlock
With U.K. lawmakers rejecting Theresa May’s Brexit deal, WSJ’s Stephen Fidler explores what options remain available to the prime minister before the country is scheduled to leave the EU on March 29.
Some big multinationals have also started to change their legal address, amid the uncertainty, in order to continue to take advantage of being inside the EU free-trade zone, deal or no-deal.
Japan’s Sony Corp. this week said it would move its European headquarters to the Netherlands from the U.K., though it said the move won’t affect any jobs. P&O, the once-iconic British shipping giant now owned by Dubai’s DP World, said its English Channel ferries would sail under the Cypriot flag instead of a British one.
The European aerospace giant, the world’s No. 2 plane maker behind Boeing Co. , operates several sites in the U.K. and makes wings for everything from its A320 single-aisle jet to its A380 superjumbos in northern Wales. Airbus has previously said it wouldn’t move current work performed in the U.K. But it said wings for future planes the company may design could be made elsewhere.
“Aerospace is a long-term business, and we could be forced to redirect future investments in the event of a no-deal Brexit,” Mr. Enders said, adding “there are plenty of countries out there who would love to build the wings for Airbus aircraft.”
Airbus initially opposed Brexit when Britain voted to leave the EU in 2016, and after that vote urged close trade ties between the two. Mr. Enders said, “it is a disgrace that more than two years after the result of the 2016 referendum, businesses are still unable to plan properly for the future.”
The actions come days before the U.K. parliament will vote on what kind of deal it would be prepared to back. A group of lawmakers are tabling a proposal that, if approved, could force the government to extend Brexit negotiations if a deal isn’t agreed by early February. Mrs. May is expected to return to Brussels to seek concessions in the coming weeks in the hope she can appease euroskeptics in her party. They say the deal she previously negotiated risks leaving the U.K. locked in an unending customs union with the EU to avoid a hard border emerging in Ireland.
Earlier this week Mrs. May held a call with several business groups to reassure them that clarity will come soon.
Britain no longer makes large commercial airliners, but its aerospace industry is among the country’s biggest exporters, supplying Boeing, Airbus and others. British aircraft engine maker Rolls-Royce Holdings PLC has said it could move the design and production licenses for its turbines that power planes such as the Boeing 787 Dreamliner to Germany depending on terms under which the U.K. exits the EU.
The aerospace, defense and security industry in Britain generates around $100 billion in annual sales and has 380,000 direct employees, according to industry trade body ADS Group. Colin Smith, ADS president, Wednesday called on the British government and parliament to work together to remove the threat of a no-deal Brexit.
“The U.K.’s aerospace sector now stands at the precipice,” Airbus’ Mr. Enders said.
May returns to Parliament with her deal after agreeing with Brussels to make extra tweaks. Rebel lawmakers fall into line and her deal is voted through on the second attempt. The U.K. exits the European Union smoothly on March 29.