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SOME THOUGHTS ON UK INDUSTRIAL POLICY

SOME THOUGHTS ON UK INDUSTRIAL POLICY AND BAE SYSTEMS
By Howard Wheeldon, Senior Strategist at BGC Partners

14 Oct 11. Yesterday it was with great pleasure that I attended the opening ceremony of the truly impressive Airbus wing plant north factory extension at Broughton, North Wales. The £400m plant extension that was opened by the Prime Minister will be used to produce wings for the new A350-XWB family of aircraft and for which Airbus has already clocked up orders from 35 airlines for 567 aircraft two years ahead of the first planned flight.

The new Airbus development in an area that the UK has long been the centre of excellence is an excellent result for the UK manufacturing economy. Fully deserved this investment demonstrates new long term commitment by the company to the UK and the skill base achieved at this plant over its seventy years history. The Broughton wing plant particularly the part that manufactures the massive A380 aircraft wings really is a ‘sight’ to behold and it is evidence if any is needed that we remain in the UK truly brilliant in our engineering and manufacturing skill base.

Sitting in the audience listening to Airbus CEO Thomas Enders plus other senior management such as the Executive VP of programmes, Tom Williams and the Prime Minister one is immediately aware of just what can be achieved if everyone pulls together and works as a team. Already employing 10,000 workers in the UK of whom 6,000 are based at the Broughton plant the new plant at Broughton will eventually employ 600 staff working around the clock. Wings are hugely complicated piece of engineering kit and in the case of the A350 completely new technology design that makes maximum use of advanced composite based materials in the form of Carbon Fibre Reinforced Plastic.
Composite based product that will be used extensively on the A350 XWB family as it is on the A380 and competing Boeing 787 family reduces the weight of the aircraft making it more fuel efficient and cheaper for airlines to fly. Before moving on it is worth noting that design of the new A350 XWB wings is the result of considerable effort and research and development investment at the company’s Filton, Bristol based operation.

Overall including the massive supply chain involved Airbus is probably responsible for at least 100,000 UK jobs. Additional Airbus related UK employment comes in the form of very many jobs at various Rolls-Royce plants that produce engines for many Airbus planes, the landing gear producer Messier Dowty, component manufacturer GKN and hundreds of small and medium sized enterprises that feed off the back of all these. Airbus UK is a win-win situation for all concerned in terms of employment and what the investment brings in to the wider economy. Moreover the new Airbus plant investment at Broughton proves real and lasting commitment to the UK. Three years ago clouded by various issues such production costs and currencies, uncertainty over UK government attitude and increased competition from the other Airbus partner nations for a bigger slice of the manufacturing cake the situation of Airbus remaining in the UK looked less clear. Thankfully persistence and common sense paid off and Airbus UK design and manufacturing operations together with ongoing commitment from the UK and Welsh governments left management in little doubt that Britain with the probable benefit of its non euro currency as well really was a place worthy of investment.

Over the past decade we may estimate that close to £2bn has been invested to make the Broughton site one of the most advanced manufacturing facilities across the group. Yesterday following a nineteen year gap since my last visit to Broughton (the Broughton and Filton plants had been owned by BAE Systems back then as part of that companies 20% ownership that had been founded on commitment by Hawker Siddeley to the Airbus Industrie partnership concept back in the 1970’s as opposed that of the British govern

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