EU Referendum: The result and aftermath...

[Puffing Devil]

Airbus Calls Brexit Process a Disgrace, Threatens to Leave U.K.

Bloomberg reports: Airbus SE said it could be forced to move future investments out of the U.K. in case of a no-deal divorce from the European Union, slamming the “madness” of Brexit supporters who assume the planemaker won’t abandon Britain.

“If there is a no-deal Brexit, we at Airbus will have to make potentially very harmful decisions for the U.K.,” said Chief Executive Officer Tom Enders, who has been one of the most outspoken business leaders on the topic. “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.” [My Bold]
​

Project fear becomes reality.

 

[Jonny]

Airbus Calls Brexit Process a Disgrace, Threatens to Leave U.K.

Bloomberg reports: Airbus SE said it could be forced to move future investments out of the U.K. in case of a no-deal divorce from the European Union, slamming the “madness” of Brexit supporters who assume the planemaker won’t abandon Britain.

“If there is a no-deal Brexit, we at Airbus will have to make potentially very harmful decisions for the U.K.,” said Chief Executive Officer Tom Enders, who has been one of the most outspoken business leaders on the topic. “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.” [My Bold]
​

Project fear becomes reality.

What you forget is that there are substantial sums of capital involved in such a plant. While the officers of a business do have significant leeway to act as they see fit, they are custodians rather than owners have a duty to shareholders to obtain best value. Arbitrarily closing a large facility without even attempting to release the capital without an extremely good reason would go against that duty. If a sale were to happen, there are probably many other companies who could use that facility with similar levels of employment.

 

[Puffing Devil]

What you forget is that there are substantial sums of capital involved in such a plant. While the officers of a business do have significant leeway to act as they see fit, they are custodians rather than owners have a duty to shareholders to obtain best value. Arbitrarily closing a large facility without even attempting to release the capital without an extremely good reason would go against that duty. If a sale were to happen, there are probably many other companies who could use that facility with similar levels of employment.

And, who exactly, would they be selling these aircraft wings to? And where would the designs come from (currently IP of Airbus). And where would the components come from? And how would they cut their costs to the bone to account for the additional import duty on these wings? Rainbows and unicorns.

Probably is not enough. Belief is not enough. What can you say to the 1000s of workers whose jobs are at risk?

 

[AM9]

What you forget is that there are substantial sums of capital involved in such a plant. While the officers of a business do have significant leeway to act as they see fit, they are custodians rather than owners have a duty to shareholders to obtain best value. Arbitrarily closing a large facility without even attempting to release the capital without an extremely good reason would go against that duty. If a sale were to happen, there are probably many other companies who could use that facility with similar levels of employment.

I presume that you don't have much experience of the aircraft/defence industry, and in particular the European major players. Of course there is capital investment in every factory but the technology and workforce is worth far more than buildings. As Puffing Devil has explained, the IP of not only the designs, but also most of the processes used on Airbus aircraft production is firmly within the hands of Airbus SE, which is a part of what was EADS (which itself was formed of German, French and Spanish operations). There's no specific interest in Broughton or Filton at the top of the organisation other than in their role as manufacturing locations using Airbus designs, drawings, processes and jigs. In a way, the locations are regarded as support plants just as James Dyson would see them, i.e. disposable when convenient. The UK leaving the EU is making their disposal by Airbus convenient.
BAE Systems isn't tied to the UK as much as many seem to think either, - in the last 10 years, they have positioned themselves to become a US corporation that eventually may have a couple of UK sites that allow them to fulfil outstanding UK (mainly defence) obligations. In this global beauty competition to attract and secure employment, the UK government wakes up every morning and puts another layer of horror makeup on.

 

[bnm]

But Britain can go it alone and make the best aircraft wings in the world.

They won't have any fuselage to attach them to but they will be the best wings in the world.

 

[Senex]

Probably is not enough. Belief is not enough. What can you say to the 1000s of workers whose jobs are at risk?

The local MP said on R4 Today this morning that a large majority of those workers had voted for Brexit. If that’s the case, then their jobs now at risk is exactly what they voted for. They were warned.

 

[HH]

There's no fool like an old fool.

 

[Muttley]

And, who exactly, would they be selling these aircraft wings to? And where would the designs come from (currently IP of Airbus). And where would the components come from? And how would they cut their costs to the bone to account for the additional import duty on these wings? Rainbows and unicorns.

Probably is not enough. Belief is not enough. What can you say to the 1000s of workers whose jobs are at risk?

What import duty ?
What rate ?

Surely not a remainer making things up....again.
Rainbows and unicorns indeed.

 

[Puffing Devil]

What import duty ?
What rate ?

Surely not a remainer making things up....again.
Rainbows and unicorns indeed.

No deal, no FTA, no membership of the Customs Union means Customs Tariffs. Even if we decided to 0 rate everything coming in, without an agreement out exports will be looking at WTO tariffs.

That's a fact. No rainbows or unicorns needed.

 

[AM9]

What import duty ?
What rate ?

Surely not a remainer making things up....again.
Rainbows and unicorns indeed.

Actually you are right on that point, i.e. the transfer of aircraft parts between production sites is expected to be tariff free, but the rest of the statement is substantially correct. Then there's the additional costs once the 'frictionless' border* disappears.
* frictionless as in normally without long queues caused by other 'tariffed' loads being processed.

 

[Puffing Devil]

Actually you are right on that point, i.e. the transfer of aircraft parts between production sites is expected to be tariff free, but the rest of the statement is substantially correct. Then there's the additional costs once the 'frictionless' border* disappears.
* frictionless as in normally without long queues caused by other 'tariffed' loads being processed.

We. have. no. agreement. If that were in place and component transfer was agreed to be tariff-free, then Airbus may feel a little more disposed to staying. "expected" is no use when looking at an enterprise of this size and scale.

And also no market for the production of wings without a design or process of manufacture. Truly a pointless discussion. Maybe worth considering if there was a substantiated proposal on the table. There is not.

This is not like, for example, a wallpaper factory when another business could feasibly step in and make a decent fist of it.

 

[Ash Bridge]

The local MP said on R4 Today this morning that a large majority of those workers had voted for Brexit. If that’s the case, then their jobs now at risk is exactly what they voted for. They were warned.

Indeed! and I seem to recall reading that the majority of the workforce at the large Nissan plant in Sunderland voted in favour of leave also, I wonder how secure they currently feel regarding their future?

 

[AM9]

We. have. no. agreement. If that were in place and component transfer was agreed to be tariff-free, then Airbus may feel a little more disposed to staying. "expected" is no use when looking at an enterprise of this size and scale.

And also no market for the production of wings without a design or process of manufacture. Truly a pointless discussion. Maybe worth considering if there was a substantiated proposal on the table. There is not.

This is not like, for example, a wallpaper factory when another business could feasibly step in and make a decent fist of it.

In an interview, on World At One today, Katherine Bennett, senior vice-president of Airbus in the UK said "we're tariff-free and we're not as affected as maybe some of the other industries but it's the lack of clarity about what might happen at the borders we're concerned about". She was clearly trying to present a positive view on the UK operations' future but she went on to say (about new investment) that everything is then put on the table and . The interviewer asked what might happen in 5 years time and the reply was that there are long-term jobs here and that there are always alternative ways of employing people but there might be a reduction althpough she wouldn't put a figure on it.

 

[cactustwirly]

What import duty ?
What rate ?

Surely not a remainer making things up....again.
Rainbows and unicorns indeed.

The import duty applied to goods from Non EU countries, under WTO rules...
Plus all the costs of having to store lots of parts, because they can't be delivered when they're required (extra customs checks, queues at Calais etc)

 

[VioletEclipse]

This thread could easily reach 500 pages before February at the current rate.

 

[Giugiaro]

Look at it on the bright side. At least you could potentially Brexit B.A.C. out of Airbus, with a little extra effort!

That is why May's deal was rejected in parliament. There's so much more potential that can be squeezed into those 585 pages!

 

[Muttley]

Well that's 3 of you who've quoted me, and yet nobody can put a figure on the questions asked.

 

[BananaRepublic]

Despite the fact that a "no deal" departure would cause Airbus some serious difficulties and added costs, what nobody has mentioned here, is that the EU has Airbus by the short and curlys.

The EU have subsidised and bailed out Airbus to the tune of billions of € over many years.
They've spent the last couple of years busily trying to minimise their risk to being sanctioned by the WTO, following persistent complaints and threats of legal action from Boeing and the US government.

In addition, the disastrous Airbus A400M military programme has had to be bailed out by leading EU member states who have orders for the aircraft (including the UK).
The German government is heavily committed with a large order and have had to plough a fortune into keeping this programme running.

Basically, it would be a reasonable assumption to say that the EU has tremendous influence of what Airbus says and does in relation to Brexit.

Don't fall into the trap of taking anything at face value; on either side.

 

[Darandio]

Well that's 3 of you who've quoted me, and yet nobody can put a figure on the questions asked.

It's almost like they are actual politicians. Addressing the questions asked without bothering to answer them.

 

[HH]

Indeed! and I seem to recall reading that the majority of the workforce at the large Nissan plant in Sunderland voted in favour of leave also, I wonder how secure they currently feel regarding their future?

And who said Turkeys don't vote for Xmas?!

 

[HH]

Well that's 3 of you who've quoted me, and yet nobody can put a figure on the questions asked.

https://www.wto.org/english/tratop_e/civair_e/civair_map_e.htm

No tariff on civil aviation.

However, Airbus is a European aerospace corporation, registered in the Netherlands and trading shares in France, Germany and Spain. You can see why they might wish to depart these shores after we leave the EU with no agreement. Who knows what tariffs we might impose in the future?

 

[Ianno87]

The local MP said on R4 Today this morning that a large majority of those workers had voted for Brexit. If that’s the case, then their jobs now at risk is exactly what they voted for. They were warned.

Indeed! and I seem to recall reading that the majority of the workforce at the large Nissan plant in Sunderland voted in favour of leave also, I wonder how secure they currently feel regarding their future?

Reading things like this just makes me realise that back in 2016 just how few people really had the first clue what they were voting for, no matter how loud the "We voted out, so lets get out" brigade shout to the contrary.

 

[Puffing Devil]

In an interview, on World At One today, Katherine Bennett, senior vice-president of Airbus in the UK said "we're tariff-free.

https://www.wto.org/english/tratop_e/civair_e/civair_map_e.htm
No tariff on civil aviation.

Civil Aircraft (and parts) are tariff free with the agreement of the EU, USA, Canada Norway and Egypt. However - there is no indication that the position will continue when we leave the EU. It's a specific agreement, which we benefit from given our membership of the EU. Once we leave we may well be on WTO terms, or we may have some sort of an agreement. We don't know. Airbus don't know. That's why they (and Sony, and P&O) are taking action now so that they can plan for the future.

Well that's 3 of you who've quoted me, and yet nobody can put a figure on the questions asked.

There is no firm answer until we know the outcome of the "deal". No deal will mean WTO Tariffs. Look them up.

It's almost like they are actual politicians. Addressing the questions asked without bothering to answer them.

I apologise for not being in the matrix for 24/7 and having a life.

I stick by my earlier post:

We. have. no. agreement. If that were in place and component transfer was agreed to be tariff-free, then Airbus may feel a little more disposed to staying. "expected" is no use when looking at an enterprise of this size and scale.

And also no market for the production of wings without a design or process of manufacture. Truly a pointless discussion. Maybe worth considering if there was a substantiated proposal on the table. There is not.

This is not like, for example, a wallpaper factory when another business could feasibly step in and make a decent fist of it.

 

[Muttley]

Civil Aircraft (and parts) are tariff free with the agreement of the EU, USA, Canada Norway and Egypt. However - there is no indication that the position will continue when we leave the EU. It's a specific agreement, which we benefit from given our membership of the EU. Once we leave we may well be on WTO terms, or we may have some sort of an agreement. We don't know. Airbus don't know. That's why they (and Sony, and P&O) are taking action now so that they can plan for the future.



There is no firm answer until we know the outcome of the "deal". No deal will mean WTO Tariffs. Look them up.



I apologise for not being in the matrix for 24/7 and having a life.

I stick by my earlier post:

Bingo.
So it is fair to say that HH was making things up.

 

[HH]

Bingo.
So it is fair to say that HH was making things up.

Uh? What did I make up?

 

[Sad Sprinter]

Reading things like this just makes me realise that back in 2016 just how few people really had the first clue what they were voting for, no matter how loud the "We voted out, so lets get out" brigade shout to the contrary.

I think being told by people who didn’t understand the emotional desire to leave is what made them leave.

 

[nidave]

I think being told by people who didn’t understand the emotional desire to leave is what made them leave.

So why should others suffer because of someone else's emotion? Leavers (especially the ones in charge pushing for it ) might be able to afford to be poorer all for an emotional reason but many (like myself) cant and based the decision not on emotion but on the facts and research of the topic to make a decision

 

[Sad Sprinter]

I'm pretty sure the reasons for leave and remain are both emotional. The European Project as a concept can hardly be seen as pragmatic-the longing of union is clearly an emotional desire.

 

[Puffing Devil]

I'm pretty sure the reasons for leave and remain are both emotional. The European Project as a concept can hardly be seen as pragmatic-the longing of union is clearly an emotional desire.

There's nothing emotional about wanting a job.

 

[SteveP29]

The result is that, if you want a free trade area but reject any coordination of tax rates across the area, then there's an inevitable pressure for corporate tax rates to be pushed lower and lower in all countries, in a way that is not really in anyone's interest.

But we keep getting told by this glorious government of ours that lower tax rates actually brings in more revenue.

Fed up of every table in Wetherspoons being plastered with Brexit 'Propaganda'. I say Propaganda as have not seen many facts to back up what he says, most of the benefits i have read in his magazine are because he can make more profit. What a shock.

One came through our door the other day, it was swiftly despatched to the recycling, I should have put it in the litter tray for the cats to p**s and s**t all over really

The Brexit stance didn't stop me buying a Dyson; although the hypocrisy might make me think twice next time.

Our next Vacuum cleaner when we need one will not be a Dyson

What you forget is that there are substantial sums of capital involved in such a plant. While the officers of a business do have significant leeway to act as they see fit, they are custodians rather than owners have a duty to shareholders to obtain best value. Arbitrarily closing a large facility without even attempting to release the capital without an extremely good reason would go against that duty. If a sale were to happen, there are probably many other companies who could use that facility with similar levels of employment.

https://twitter.com/JimMFelton/status/1088355489627455488