Business

Airbus looks at stockpiling parts to beat Brexit bottleneck

Aircraft manufacturer also to announce job cuts on two major programmes

An employee selects a drill component on the Airbus A380 double-deck wide-body passenger jet assembly line. Airbus is considering job cuts on two of its major programmes, including the A380. Photograph: Krisztian Bocsi/Bloomberg

Mon Mar 5 2018 - 10:58

Airbus may need to stock up on the parts it needs to build wings at its UK plants to avoid the risk of delays to deliveries once Britain formally leaves the European Union.

The European plane maker has warned that it can only ensure its UK factories remain untouched if its operations can retain the same level of efficiency. Chief executive Tom Enders has been one of the most outspoken critics of Brexit, even after sending a letter to business secretary Greg Clark last month to reaffirm Airbus's long-term commitment to Britain, where it produces wings for all its commercial jets.

"If we think there's going to be a kind of a gumming up of the docks and the airports in March of next year and during a transition period then we're going to have to start ordering additional components now," Tom Williams, chief operating officer of Airbus's commercial aircraft arm, said in an internal video posted to employees. "And that's at a time when all of our suppliers are already pretty busy."

The video of Mr Williams’s comments were made after a meeting with government where ministers indicated they understood the issues facing the aerospace industry – including concerns about border controls for both parts and people – but little in the way of specifics.

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Airbus is in the midst of ramping up production to meet record backlogs in orders for its single-aisle and wide-body jets, an expansion that already has it pushing its suppliers to the brink.

The aircraft manufacturer is also preparing to announce jobs cuts at two troubled aircraft programs that have been weighing on earnings for years.

Management will meet its European Works Council on Wednesday to explain reductions in the manufacturing rates of the A380 superjumbo and A400M military-transport programmes and “discuss associated implications for the workforce”, it said in a statement Monday.

Some 3,600 jobs are likely to be affected, with plants in Bremen and Augsburg, in Germany, Seville in Spain and Filton, in England, worst hit.

Airbus said the reports may be “excessive” and that it deeply regrets leaks concerning the two programmes. The company added that it won’t comment further before sitting down with its social partners. This is required by some countries’ labour laws.

Airbus last month reached a deal with the A400M’s government buyers that it said would secure the future of the turboprop program, albeit at modified build rates. It later announced a €1.3 billion charge against the plane, taking total cost-overruns beyond €8 billion, while saying the sum would draw a line under losses.

While the company won a $16 billion order follow-on order for the A380 superjumbo from Dubai-based Emirates, the deal signed off last month will help sustain the program over coming years rather than lift production rates that are already being reduced. – Bloomberg

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