Airbus CEO Lashes Out at U.K. Government Over Handling of Brexit

(Bloomberg) -- Airbus SE Chief Executive Officer Tom Enders ratcheted up his criticism of the U.K. government over its handling of Brexit talks as Prime Minister Theresa May prepares to hold a key meeting of ministers aimed at thrashing out a common position on the issue.

May’s administration has “no clue or consensus on how to execute Brexit without severe harm,” Enders said at a briefing in London Friday. The confusion has wasted months of negotiating time and created “a discomforting situation” for the planemaker, he added.

The broadside comes after Airbus last month delivered the starkest warning yet from a major company about the perils of Britain leaving the European Union’s single market and customs union without a transition deal. The group warned of “severe disruption” to U.K. production that would force it reconsider its investments and long-term presence in the country.

Enders said in his latest comments that the U.K. should at least stay in the customs union and various regulatory bodies and agree to abide by European Court of Justice decisions.

“This is the minimum I think to keep the business,” he said. “Not harmless, but to minimize the damage to business.” The CEO added that he was speaking out “not because we want to play politics” but because the company has a duty to stakeholders “to be truthful about the consequences.”

Grounded

Enders said a particular worry is that if the U.K. is no longer a member of the European Aviation Safety Agency the certification of thousands of parts in its supply chain could be jeopardized, something that may “eventually lead to a standstill in production.” He also echoed concerns from U.K. aerospace lobby group ADS that planes could even be grounded as safety approvals run out.

May’s top team of ministers will attempt to finalize the U.K. blueprint for its partnership with the EU at a crunch meeting at her Chequers country residence, but a group of seven pro-Brexit ministers are pushing for her to tear up her plans. Rebel cabinet members met in Foreign Secretary Boris Johnson’s offices late Thursday to coordinate their opposition to the premier’s policy on linking tariffs and goods regulations closely to those of the bloc.

Airbus employs 14,000 people at 25 sites in Britain and supports about 4,000 U.K. companies and more than 100,000 jobs in the supply chain, the Toulouse, France-based company said in a Brexit risk-assessment document last month.

A hard Brexit could force the group, which operates a “just in-time” manufacturing procedure, to stockpile around 1 billion euros ($1.2 billion) in parts to help circumvent snags caused by new customs rules, with each week of delay translating into 1 billion euros in lost revenue, it estimates.

Airbus commercial-aircraft chief Guillaume Faury said that in order to stockpile sufficient parts to last three months and provide the company with a suitable “buffer,” its suppliers need to increase production by more than one-third now. That’s a cause for concern as those companies are already stretched by production ramp-ups.

The manufacturer has repeatedly warned about a risk of Brexit sidelining the U.K. when it comes to future aerospace projects. Its German operation is working with French warplane specialist Dassault Aviation SA on a next generation of European fighter aircraft, rather than selecting its historic partner in combat jets, London-based BAE Systems Plc.

Enders had pledged in February that Airbus would retain its British operations “long into the future’’ in what seemed then to be a turnaround from previous attacks on the planned divorce.

To contact the reporters on this story: Benjamin Katz in London at bkatz38@bloomberg.net;Christopher Jasper in London at cjasper@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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