Daily Times

Aviation giant Airbus on Friday underscored its threat to leave Britain if the country exits the European Union without an agreement on future trading relations, noting that the company is already taking steps to mitigate a worst-case scenario.

Airbus CEO Tom Enders was candid about his frustration with the government’s lack of progress in talks with the EU. Prime Minister Theresa May will meet with her Cabinet on Friday in an effort to hammer out a unified position on Brexit more than two years after the country voted to leave the bloc.

Enders stressed that Brexit in any form is damaging to business and to the UK — a dark cloud on the horizon for a country enjoying an unusually good summer.

“The sun is shining brightly on the UK, the English team is progressing towards the (World Cup) final … the Royal Air Force is preparing to celebrate its centenary and her majesty’s government still has no clue, or at least no consensus, on how to execute Brexit without severe harm,” he told reporters Friday in a briefing on the state of the company ahead of the Farnborough airshow this month.

The company, which employs about 14,000 people at 25 sites in the UK, has said it will “reconsider its long-term footprint in the country” if there is no deal. Other companies, such as Jaguar Land Rover and BMW have also expressed grave concern in recent weeks because of the lack of clarity of future arrangements.

These global companies are particularly vulnerable to Brexit because of their international supply chain. Parts are made in several countries, which are shipped back and forth across international borders. Tariffs between the UK and EU would be a huge blow.

“Rest assured we are taking first preparations as we speak in order to be able to mitigate consequences from whatever Brexit scenario may follow,” Enders said.

Some members of May’s government have challenged companies’ warnings about Brexit, suggesting they would hurt the government’s efforts to negotiate a good deal.

Enders was having none of it, though. He said he owed it to stakeholders to be forthright on the consequences and lay out worries about friction at the border that might stall operations.

The company said that to produce a buffer of say, one third, in supply chains, suppliers would need to produce a third more. But at the moment they already working at full capacity, said Guillame Faury, the head of the commercial aircraft division.

“This is not a bluff,” Faury said. “You bluff when you have a benefit for bluffing.”

Published in Daily Times, July 7^th 2018.