I note reports suggesting that the highly regarded Sunday Telegraph columnist Jeremy Warner believes that the intervention by Airbus chief executive Tom Enders in the Brexit debate last week and which in the subsequent newspaper article was described as ‘Airbus threatening to quit Britain in the event of no-deal’ Mr. Warner goes on to suggest this as being ‘deeply symbolic of everything that is wrong with the ‘self-interested, politically dominated world of multinational corporatism’.
Referring to a video from the Airbus CEO that I believe was published on YouTube late Thursday and in which Mr Enders suggested that the firm will very likely leave the UK in the event of a no-deal Brexit, Mr. Warner is reported to have said that ‘Mr. Enders is used to getting his own way and is not prepared to tolerate any threat to his European supply chains’. To that all I can say is that while Mr. Enders very clearly wanted the UK to stay in the EU to suggest that he is used to getting his way is a very underhand and unwarranted remark to make.
Furthermore, Mr. Warner apparently goes on in his article to criticise the Labour government for allowing the sale by BAE Systems of its stake in Airbus one the basis that ‘the [20% stake formally held in Airbus] guaranteed a work share in the European pooling of civil aviation interests. Actually it guaranteed nothing – Airbus is a stand-alone unit that is responsible to its shareholders. For the UK’s involvement in Airbus it is to the foresight and imagination of the private sector in the former of Hawker Siddeley that we owe a debt of gratitude for the original investment in wings design and manufacturing.
Mr. Warner is reported to have gone on to suggest that ever since then [2006 when BAE Systems sold the stake back to the than parent company EADS] the writing has been on the wall and that [now] Brexit gives what is now Airbus all the excuses it needs to concentrate production on more rational lines or [to move] offshore UK production to China. To that my answer is that Airbus will only consider investing in wing manufacturing elsewhere when there are no other stones left to be turned in the UK.
While Mr. Warner’s view may not be untypical in respect of how Airbus is so often wrongly perceived here in the UK it is also one that completely fails to take into account of the billions of pounds of investment that the company has subsequently put into various of its UK activities since the 20% minority stake was acquired from BAE Systems back in 2006. As if to back this up it should perhaps not be ignored that since 2006 Airbus has had a rather high turnover in CEO’s – since 2006 for example, Noel Forgeard, Gustav Humbert, Louis Gallois all held the very top position at what is now Airbus before real stability arrived in the form of Tom Enders appointment as CEO in 2012.
One of best examples that I can think of in respect of Airbus investment in the UK was that required for the expansion of the Broughton plant in order to accommodate building wings for the A350 commercial jet. There are many other expels I could list at Filton, Oxford, Stevenage and elsewhere not to mention vast amounts in research and development.
Neither should it be so easily ignored when looking back at the decision by BAE Systems to dispose of its stake that back in 2006 Airbus faced a number of different issues that to a 20% minority stakeholder such as BAE Systems, one that had very little say over management, events and actions, looked like potential risk. It should not be forgotten that just as all other quoted companies also have, BAE Systems has shareholders to consider as well.
In breaking down this particular argument one needs to also look at just how much Airbus has expanded since BAE Systems disposed of its 20% minority stake. As a company, and one that has, under the guidance of Tom Enders, been restructured away from that of a predominantly state owned entity to one that is now owned and controlled in the majority by public shareholders and, again thanks to Tom Enders, has correct governance in place, Airbus is today a very different company to the one of 2006.
In the process nothing has been taken for granted and there was and remains an attitude that future success could never be guaranteed – it had to be worked for. But look at what has occurred in twelve years- back in 2006 aircraft production at Airbus totalled 434 airplanes for the year. Twelve years later in 2018, Airbus delivered no fewer than 800 commercial jets to 93 different customers.
It is only by investment that allowed expansion of plants such as Broughton that has allowed the company to achieve its goals. Such investment by Airbus should not be so easily ignored.
Having myself just returned from a two day return visit to the main Airbus assembly plant in Toulouse I can say with absolute honesty that there is no-one that I spoke to during my visit that doesn’t want the status quo to remain. That is also what outgoing CEO Tom Enders wants as well and his warnings in regard of the possibility of the UK going down a ‘no-deal’ Brexit route are rational and honest as opposed to how they are being seen by some including one particularly bigoted MP who talks of this video being a case of German bullying. How sad is that!
When Mr. Enders said “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’ – they are wrong” adding also that “Of course it is not possible to pick up and move our large UK factories to other parts of the world immediately” he was merely reminding that Airbus has always to be competitive and that if a no-deal Brexit is the final solution then Airbus will need to consider its options. Aerospace is, as he I believe suggested, a long-term business and it is perfectly in order to remind that there are plenty of countries out there who would love to build wings for Airbus in the future. The bottom line is all about avoiding a no-deal Brexit.
(Commentary will next appear on Wednesday 30th January)
CHW (London – 28th January 2019)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785