With Brexit Tumult Roiling Business, Boeing Plans U.K. Expansion
With Brexit Tumult Roiling Business, Boeing Plans U.K. Expansion
(Bloomberg) -- U.S. planemaker Boeing Co. is evaluating steps to expand its British business, even as banks and other manufacturers pull back from the U.K. ahead of a potentially messy Brexit.
Speaking hours after Prime Minister Theresa May’s Brexit accord with the European Union was rocked by government resignations, Boeing Europe President Michael Arthur said the company is looking at two or three options for expansion after opening its first European factory in England last month.
The highly automated 40 million-pound ($51 million) plant has higher productivity than a Mexican operation that once performed the work, requiring only about 50 staff rather than hundreds, Arthur said in an interview. And Britain’s policy of outsourcing warplane maintenance delivers lucrative revenue streams that even the U.S. can’t match, he said.
Most overseas companies have been more cautious on Brexit. Among banks, JPMorgan, Goldman Sachs and Morgan Stanley plan to move their EU hubs to Frankfurt, while in the auto industry Nissan Motor Co. has delayed wage talks at Britain’s biggest car plant and PSA Group’s Vauxhall is said to be looking at closing one of two U.K. sites.
Boeing’s global rival Airbus SE, which has 14,000 U.K. workers, has warned that a no-deal split would make its British wings business less efficient by slowing the movement of parts. The Toulouse, France-based company says that could lead it to divert investment and jobs elsewhere.
Boeing, which employs 2,200 people at 65 locations across Britain, says its new Sheffield plant sends all of its components to U.S. assembly lines, something Brexit won’t affect. The factory produces systems that move wing flaps on planes including the best-selling 737 jet.
In the military arena, Boeing supports British Chinook and Apache helicopters and C-17 transporters. The U.K. has also ordered more Apaches and the 737-based Poseidon maritime patrol plane, and plans to buy extra Chinooks and the Wedgetail early-warning model.
New business opportunities might include work on Boeing jets returned by Irish-based leasing firms, Arthur said.
To contact the reporter on this story: Christopher Jasper in London at cjasper@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Andrew Noël
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