Brexit & the supply chain: Airbus UK future in doubt and logistics industry calls for urgent clarity

The as-yet-unknown impact of the UK’s departure from the EU has hit the headlines again this week, concerning the supply chain and Britain’s place in the aerospace industry.

Airbus, the largest commercial aerospace company in the UK, has published a risk assessment study outlining the urgent threats to its business arising from the UK leaving the EU without a withdrawal agreement.

Should the UK exit the EU without a deal – leaving both the single market and customs union immediately and without any agreed transition – Airbus said it would suffer severe disruption and interruption of UK production. This scenario would force it to reconsider its UK investments and its long-term footprint in the country, severely undermining UK efforts to keep a competitive and innovative aerospace industry, developing high value jobs and competences, it added.

The current planned transition has been judged too short for Airbus to implement the required changes to its extensive supply chain. Airbus spends over £5 billion with UK suppliers with a supply chain of more than 4,000 companies, including hundreds of SMEs.

“In any scenario, Brexit has severe negative consequences for the UK aerospace industry and Airbus in particular,” said Airbus Commercial Aircraft COO Tom Williams. “Therefore, immediate mitigation measures would need to be accelerated. While Airbus understands that the political process must go on, as a responsible business we require immediate details on the pragmatic steps that should be taken to operate competitively. Without these, Airbus believes that the impacts on our UK operations could be significant. We have sought to highlight our concerns over the past 12 months, without success. Far from Project Fear, this is a dawning reality for Airbus. Put simply, a No Deal scenario directly threatens Airbus’ future in the UK.”

“The logistics industry will be the first to encounter the realities of Brexit”

The Freight Transport Association (FTA) has also issued a warning to the government, appealing for information so companies don’t have to operate “in the dark” while making spending decisions and committing to operating plans for the period that Brexit becomes a reality.

The FTA represents 17,000 member organisations across the logistics sector. FTA President Leigh Pomlett said: “The time for political negotiations on Brexit is fast running out, and those of us responsible for keeping Britain trading need urgent assistance and guidance from government.

“Without knowing who we will be employing, how we will be crossing borders, what certifications and permits goods and vehicles will require in order to travel, business as we know it will be unable to continue. The logistics industry will be the first part of the economy to encounter the realities of Brexit when vehicles drive off the first ferry to arrive in Calais on 30 March 2019 and we want things to go smoothly, but we need more information about the trading conditions we are to expect once the UK leaves the EU. The time for talking is over – it’s now time to act.

“Simply saying things will be OK is no longer enough. The logistics sector will be key to making Brexit work for the UK but we can no longer work blind and be left to guess what we may have to do, and when by. Today’s delegates [at the Keep Britain Trading Conference] have been clear in their instructions to government: logistics wants Brexit to go well for the country, but needs the tools with which to facilitate a smooth departure from the EU for all British business.”

In addition to the confirmation of the status of EU workers and the permits required for both vehicles and freight travelling to and from the Continent, FTA reiterated its calls for clarity on the continued mutual recognition of vocational driving licences and competency certificates, as well as the number of vehicle permits which will be available to enable vehicles to cross the Channel.

“Logistics businesses need a clear roadmap to enable them to plan efficiently for a post-Brexit world. There is no more time for political posturing – British business deserves clarity and progress to reinforce the nation’s trading position in a post-Brexit world.”