Airbus may need to stockpile parts to beat Brexit customs delays

Brexit may mean Airbus will need to increase spending on parts to build up a buffer for its UK factories to offset any delays caused customs and border delays when Britain leaves the EU.
Katherine Bennett, the pan-European plane-maker’s UK chief, said the company may have to stockpile components to keep production at its plants at Filton, near Bristol, and Broughton, North Wales, running smoothly.
"We spend ?5bn a year on the UK supply chain,” Ms Bennett said in a BBC interview. “It is really important the parts don't get held up in warehouses."
Airbus may need to stockpile parts to beat Brexit customs delays

Airbus transports wings from Broughton on its specially enlarged 'Beluga' jets 

The Broughton site produces wings for almost all Airbus airliners, while Filton builds wings for the A400M military transport, along with engineering support and development.
The company uses “just in time” logistics, meaning it holds a very limited supply of parts, relying on steady deliveries from suppliers around Europe to keep production flowing.
Ms Bennett said even a few hours delay at docks could disrupt production, and become a “critical issue” for the Airbus operations in the UK.
"We need conditions right for us, we just don't need these burdens... which may make Airbus think differently [about its base]," she added.
Her comments echo a warning from chief operating officer Tom Williams, the most senior Briton at Airbus. In response to Prime Minister Theresa May’s speech last week sketching out possible customs arrangements when Britain leaves the EU in March 2019, he indicated that stockpiling parts would have to begin soon to avoid a “gumming up of docks and airports”.
Airbus may need to stockpile parts to beat Brexit customs delays

Prime Minister Theresa May set out how post-Brexit customs could work in a speech last week

Airbus suppliers are already under intense pressure as the company ramps up production rates of airliners to meet demand.
Analysts at Berenberg added: “The aerospace industry has continued to voice its concerns about the potential disruption that Brexit may bring, although under WTO rules (the worst case scenario for the UK after Brexit), aerospace components are exempt from duties.”
Despite the warnings, Airbus chief executive Tom Enders has promised to maintain its UK operations “long into the future”, protecting its 15,000 British employees’ jobs. Although a critic of Brexit in the past, Mr Enders is reported to have used a private letter to Business Secretary Greg Clark to say Airbus will continue to see Britain as a “competitive place to invest”.
Airbus may need to stockpile parts to beat Brexit customs delays

Airbus designs and develops landing gear and wings at its plant in Filton, near Bristol

Airbus is facing further turbulence, with the potential for job losses related to reducing the rate it builds its A380 “superjumbo” and A400M aircraft. A380 production is being slowed because of poor sales, with output dropping from 12 last year to eight this year and may fall as low as six. Airbus is slowing working on the A400M to give it time to iron out technical problems with the military transporter.
Management are due to meet the European union chiefs on March 7 to discuss the moves and what it called “associated implications for the workforce”.
Airbus may need to stockpile parts to beat Brexit customs delays

Airbus has slowed the build rate of its giant A380 'superjumbo'

In a statement, Airbus said it was “committed to managing any social implications in a responsible manner and has demonstrated its ability to find the best possible solutions for its workforce… in the past”.
In response to media reports that Airbus could cut 3,600 jobs across Europe as a consequence, it said that it was policy to discuss changes with the workforce before making public comments on them.
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