Airbus Preparing for ‘Worst’ Brexit Outcome

 - January 16, 2019, 1:58 PM
Airbus CEO Tom Enders. (Photo: Airbus)

Questions about Airbus’s strategy in the event of a so-called no-deal Brexit largely overshadowed Wednesday’s groundbreaking ceremony marking the start of construction of the Airbus A220 assembly site in Mobile, Alabama. The event followed the crushing defeat in the UK parliament of British prime minister Theresa May’s plan for a negotiated “soft” exit from the European Union. Speaking at a press briefing ahead of the event, Airbus CEO Tom Enders lamented recent trends toward protectionism and nationalism and referenced the development of Airbus’s presence in the U.S. as a hedge against such inclinations.

Closer to home, however, the Brexit vote stands to disrupt Airbus’s operations in a profound way, particularly given the location of its wing production plant in Broughton, in the UK.

“We will carry on preparation [for Brexit] and possibly accelerate them, planning for the worst and hoping for the best,” said Enders. “I think there is still a chance for an outcome that keeps Britain closer to the EU than many people think possible.”

Enders added that Airbus was “well represented” in a conference call among ministers on Tuesday and that they have expressed a certain degree of optimism that a no-deal Brexit won’t happen. Nevertheless, he explained, Airbus must prepare contingencies for any outcome. In fact, Airbus’s plans include stockpiling parts “for a number of weeks” in preparation for interruptions to supply from the UK, confirmed Airbus Commercial Aircraft president Guillaume Faury. “Even having said it’s a couple of weeks we are not in a position to be sure that all of our suppliers are appropriately prepared for let’s say a one-month shutdown,” he said. “We have done our very best; we are prepared to a certain extent.”

Still, Faury characterized a no-deal Brexit as a “potential disaster” that both sides must avoid by any means.

“A hard Brexit is a lot about uncertainty,” he said. “But we would be in uncharted territory [in the event of a no-deal Brexit] with a level of risk that is really hard to quantify.”