Brexit and the British Aerospace industry

[SoloD]

Aerospace is a big business for the UK. We have giants in our own right such as Rolls Royce (23,000 UK employees), BAe Systems, GKN, Martin Baker and dozens of other companies. In addition, there are numerous foreign companies who had manufacturing and R&D facilities in the UK.

In all the UK exports around £30 billion worth of Aerospace equipment and it supports nearly 1 million jobs. www.bbc.co.uk/news/business-44840954

Currently, all the parts made by UK based companies are certified by EASA (the European Aerospace Safety Agency). After Brexit EASA will no longer have authority in the UK and it will be up to the Civil Aviation Authority to handle all aspects of air safety including certifying all parts and equipment.

Now here comes the problem. The CAA does not have the staff, nor experience to do what the EASA currently do.

ADS, the trade association for UK aerospace industry, estimates it could take approximately 5-10 years for the CAA to rebuild its safety regulation capability to fill in those responsibilities which EASA currently holds.

Rolls Royce have recently chosen Germany over the UK to expand it's R&D facilities. It is now looking to shift for work and jobs to Germany so that it's engines can still be certified by EASA.

The Royal Aerological Society pointed out that

"Far from diminishing UK influence in global aviation,
the EASA regime has provided a conduit for UK
influence on aviation safety and security within Europe
and beyond on behalf of the UK passengers flying on
airlines around the world; indeed, the UK has been a
major driver of ever-closer alignment on regulatory matters across Europe"

If we do see hard borders and slow customs checks then this will be highly disruptive to the "just-In-Time" manufacturing methods used in modern industry, but the inability to have our national regulators able to certify products will be further damaging to an industry which has so many high skill jobs.

Airbus have already warned it may need to cut investment in the UK.
www.bloomberg.com/news/articles/2018-07-18/airbus-condemns-u-k-s-unraveling-brexit-plan-echoing-rolls

European countries want us to stay
With six European countries polled, there were clear majorities in four expressing a desire for the UK to stay in the EU: Denmark (63%), Finland (59%), Germany (58%) and Sweden (58%).

Yet Theresa May expects to be able to stay in the EASA!

DH works for Airbus. We are very worried

@Rhinestone
NOT an attack on your DH but did he vote 'leave' and indeed at the time of the vote, way back, was the risk to anyones jobs even thought about among his colleagues? I am obvioulsly not expecting you to break confidentiality in any reply.

No we both voted Remain, as did most of his colleagues. Airbus management wrote to all staff before the referendum urging them to vote to remain, as they could see the implications for manufacturing.

DH was a test pilot, we saw this coming, he has worked for a university for the last 12 months. Yes, we voted for and are very strong remainers and not just because of his former job.

Academia is also suffering greatly but it is a safer bet.

Yet Theresa May expects to be able to stay in the EASA!

How can we be in an international agreement where there is no court to supervise the agreement? Its the same with the concept of the UK collecting duty on goods bound for the EU. The UK has miserably failed to collect correct VAT from Chinese goods (see www.ravas.org.uk for details) what makes the EU believe we would collect duty for them when we have left the EU?

It's very easy to stay in EASA, really, you just agree to continue the already agreed rules under a new name, because you know that the UK is already compliant. If the EU doesn't want tourism income, their tourism industry and all the staff employed in it will be sure to let them know pretty quickly.
International law doesn't requite a global court to oversee countries sticking to treaty obligations, the global system is all about finely balanced give and take of reputation and not crossing lines - and it is international, i.e. beyond the EU.

As someone familiar with the Royal Aeronautical Society, I've never heard of the "Royal Aerological Society"...
I work in the aerospace industry, and I'm not worried at all. In fact, leaving the EU is likely to increase exports and jobs in this industry, because it will no longer get stuck in endless committee glue - I mean I've sat through these meetings with people from the EU, and it take all day... to achieve almost nothing... if you could only experience it, you would not need persuading that leaving was a blessed relief - you can finally get on with things without the dead wood holding you back.

To those expressing worry about jobs, it does not seem rational for EU countries assembling aircraft to refuse the import of wings designed and manufactured for those aircraft, because aeroplanes without wings aren't likely to sell very well, and the staff in EU countries involved in the design and manufacture of the rest of the aircraft are likely to face unemployment if that manufacturing ceases simply because their country won't allow the import of wings specifically designed and manufactured for their aircraft made outside the EU. A more likely outcome is that WTO tariffs of between 5%-15% are applied to the wings, and that cost is added onto the final price of the aircraft, and everything carries on as normal.

I don't see any substance behind some of the alarmist information published by news providers who seem to invest the majority of their time in political activism rather than investigative journalism.
Whichever side of this almost religious debate you are on, journalists are doing everyone a disservice by not bothering to do journalism, and the internet - with more members of the public connected than ever before - simply amplifies misinformation and helps foment non-fact-based opinion.

The comment about whether voting leave was somehow selfish and not thinking about other people's jobs belies a fixed notion that voting remain wouldn't also be somehow selfish and not thinking about other people's jobs. Economic growth in the EU is very poor, and far below that of other parts of the world, particularly parts of Asia, which are a large customer base... in fact a lot of the finished aircraft are bought by companies in countries outside the EU...
If the EU lacks the capability to build parts of the aircraft as cheaply and well as the UK, then putting up obstacles that only serve to raise the price of the finished product doesn't help them at all. The EU (nor Airbus) can't just magically conjure up a large team of competent engineers and factories overnight - the capability is where it is, and a lot of it is in the UK.

When I see comments like that, it makes me think "If you thought you were rescuing someone from a bad situation, you would be quite confused if they fought you so they could stay in it". I understand that people who voted remain are afraid of the future, and sincere in wanting a good future for the country, but honestly, leave voters want that too, and are not afraid of the future at all, the UK is a talented country, and one with rights and capabilities that most countries around the world don't have. I wish everyone would stop reading and listening to the news, because all the media seem to be trying to do is wind everyone up and make them feel anxious and depressed just so they can sell more copy, and wish everyone would stop letting them do this to us all.

Very interesting Augury. Thank you.

Augury first you have to meet the membership terms of the EASA. The current terms do not include third country membership.

Yes, EASA may amend their terms, or not.

All of this is bounded in the legal structures and agreements in place. Just because the UK was a member on 29 March 2019, and nothing in terms of our aviation 'output' changes on 30 March 2019, does not mean that EASA can just waive their terms and accept third country UK aviation 'just because'.

I don't know if Augury is correct or not but the guy i spent quite a bit of time with this summer, who works for Airbus out of Toulouse, did not share his optimism nor did anyone else i met who also worked for Airbus, what they did suggest was that over the med to long term, AB would withdraw from the UK.

Its unlikely this story would receive so much coverage and credence by the media and by companies like RR, who only last month said they would start to stockpile parts in the event of no deal, if its such a non story.

RR is already the worlds 2nd biggest aircraft engine supplier and with its new engines will soon supply over 50% of the worlds airlines.... so its not as if being in the Eu has held it back!

I could imagine that other countries could take a pragmatic approach and keep their fingers crossed about breaking the law, and saying that if the parts were certified as OK yesterday, then they still will be OK next week. This falls apart as soon as there is some change in the spec - are the parts still compliant or not? Or it falls apart when something goes wrong; who will settle any disputes?

That's always been the problem with the whole "we'll just carry on as we were WITHOUT the paperwork and legal agreements" position. What happens when something goes wrong? And who will stick their hand up and take responsibility for being the person who waved through things "as they were before" without any legal basis?

As a handy thought exercise, for anyone who still thinks we can just carry on as before I suggest letting your car insurance lapse and then tell the police you still have a valid license, and a car, and you've paid for petrol, and you're only driving as you did before. See how it goes. (You may wish to add, "And I'm a Freeman on the Land" as well, just for the LOLs.)

@augury

We can not stay in EASA without remaining part of the ECJ. Which the Conservatives have ruled out.

You write very confidently but you don't cite any sources.

Airbus can make the wings elsewhere you know, if Brexit adds to the cost of producing them in the UK, they can and will move. There are any number of countries who would welcome Airbus and the jobs they bring.

If the CAA is unable to certify parts designed and made in the UK, they will have no choice but to move.

Where I am most hazy is why you think the UK will benefit from Brexit. We will have a regulator who can't properly regulate for years to come and no trade agreements. Already the American's are saying this is a "God-given opportunity to steal the UKs trade".

We lose the customs union, we lose all the EU free trade agreements. What sort of trade deals do you think we can do when we are that desperate.

Jesus...

But Turkey isn't under the jurisdiction of the ECJ and it is a member of EASA SoloD.

"Turkey is one of EASA’s Pan-European Partners (PANEP). This is a community of non-EASA European countries with which EASA cooperates on the implementation of the EU aviation safety rules - either in the framework of comprehensive aviation agreements already concluded with the EU or in anticipation of such agreements."

Source: EASA

So we could be a Pan European country then Misti.

either in the framework of comprehensive aviation agreements already concluded with the EU or in anticipation of such agreements."

Those agreements won't write themselves, someone has to sit down and do so. I don't doubt that we could, in the fullness of time. It's unlikely that it can be done within the next few months. Especially since the Tories have spent 26 months so far and have achieved nothing of any note, not even being able to agree among themselves.

PANEP members of EASA also accept that ECJ - and indeed, Mrs May did too in her Mansion House speech. She noted that if we could continue as EASA members acceding to the ECJ decisions in the limited field of EASA/aviation would be acceptable to the UK. So a slight blurring of that no ECJ red line.

However, not seeing any sign of any UK efforts to clarify our position re EASA come 29 March 2019. These legal agreements don't just get waved through'.

It'll be interesting to see what 'nothing' the government have been doing then when they produce the 70 sets of notes for industry with regard to a no deal. They should have so suggestions me thinks.

I actually said 'nothing of note' which is not the same as 'nothing'. As far as I can see, key questions have not been answered. The notes for industry should have been produced many months ago, not six months before the deadline. Let's just stick with aviation, various travel firms have already re-written their terms and conditions - if they had concrete information say 12 months ago, (assuming it was favourable), would they have bothered?

I for one, won't be booking flights unless I have some cast iron guarantees - having been caught out by one firm going bankrupt. Yes, I paid by credit card and got my money back with no problems from the card provider, but it was hassle with collecting money in from six others and rebooking, changing airports, cancelling pre-booked car parking, notifying the holiday let about changed arrival and departure times, which I could have done without.

DT99 why have they been working on no-deal scenario? I want to see the 70 benefits of leaving the EU.... not the negatives of no-deal!

No-deal was never ever mentioned at the time of the referendum.

when they produce the 70 sets of notes for industry with regard to a no deal

Will they be in the same excruciating detail as the impact assessments? The ones that turned out not to exist?

So we could be a Pan European country then Misti.

There would need to be a working agreement. It's not automatic.

Same is true of many brexit issues: they can be resolved by making deals, but that takes time and resources, and invariably involves a loss of sovereignty.