(Bloomberg) -- Bombardier Inc., whose Belfast aircraft plant is Northern Ireland’s biggest manufacturer, said it’s against any moves toward a Brexit deal that would effectively redraw the U.K.-Ireland border in the Irish Sea.
Rather than benefit from a settlement keeping the province in a customs union with the Irish Republic to preserve boundary-free travel, the Belfast site, which employs 4,200 people, would find its day-to-day imports tied up in red tape and delays, the head of the operation said.
“Most of them come via the mainland, through the ports of Liverpool and Southampton, whether from U.K. suppliers, European suppliers or from North America and China,” Michael Ryan, Bombardier’s president of aerostructures and engineering services, said in an interview. Only a small number of items are flown in via Dublin airport, he said.
The prospect of Northern Ireland being treated differently after Brexit emerged as Prime Minister Theresa May sought to meet Ireland’s call for border-less travel be preserved to avoid upsetting a peace process brokered in the 1990s. The plan was shelved Monday as Ulster’s Democratic Unionists, on whom May’s Conservatives rely for a majority in Parliament, insisted that the province should leave the EU on the same terms as the rest of Britain.
Ryan said Bombardier wants to preserve the status quo as much as possible regardless of whether the customs boundary is drawn at the “Channel Tunnel or Stranraer” -- the Scottish port with the shortest crossing to Ireland -- but regards the latter option, amounting to an Irish Sea border, as more onerous.
Bombardier also has little to gain in terms of preserving border-free access to the Republic for its workforce, since it overwhelmingly recruits from Northern Ireland itself, where the next-biggest manufacturer, Caterpillar Inc., is far smaller, he said Tuesday.
“We’re not like Airbus, which wants to be able to move people between France, Germany, Spain and the U.K.,” Ryan said. “Most of our employees are local to Belfast. We have very few from the mainland and even fewer from the south.”
As a Canadian company with the bulk of its sales outside Europe, most of the people Bombardier brings to Belfast -- whether aircraft customers or working parties undertaking work on its wings and aerostructures -- already require visas, so that it is used to the “complexity and cost” involved, the executive said. Neither are tariffs an issue, given aerospace’s exemption from World Trade Organization rules.
Ryan said the relative optimism that the EU, Britain and Irish Prime Minister Leo Varadkar have demonstrated about a solution still being found suggests a “traditional Irish fudge” may be on the cards, citing earlier accords including the 1998 Good Friday Agreement that created Northern Ireland’s devolved government and a number of cross-border institutions.
“A certain constructive ambiguity has allowed us to move on and go to the next step before, and I expect that this will be much the same,” Ryan said. In the current situation that might mean a blurring of the customs and border issue to allow trade talks to begin. A final settlement might then be reached at a later date, when the DUP may not wield such clout, he said.
Ryan cited “regulatory convergence -- or non-divergence” as a possible way forward, alluding to Brexit Secretary David Davis’s comment Tuesday that the U.K. wants to remain closely linked to the EU on regulation of industries including financial services, seen as a bid to unlock the Irish border issue.
Ryan said Bombardier will seek “other opportunities” to work with Airbus in the wake of the October deal between the companies that will see the Toulouse, France-based manufacturer take control of the Canadian company’s C Series narrow-body jet program.
The plane’s composite wings, made in Belfast, are more advanced than those of the Airbus A350 in that they feature a one-piece skin, Ryan said, while adding that he couldn’t say if Airbus will want to adopt the design.
Ryan said Boeing’s claim that the C Series has been sold at an artificially low price with the support of Canadian state aid is unfounded, and that all commercial planes -- including new models from Russia, China and Japan -- are pitched more keenly at the launch stage.
“You can’t sell above cost at the start of the program but you recover your costs in the longer term,” he said.
©2017 Bloomberg L.P.