Chilling statements from bosses at both companies in the space of 24 hours raises the terrifying prospect that one of both of the plants in Deeside in Ellesmere Port may not survive Brexit. Tony McDonough reports
Since the EU Referendum in June 2016 those who supported Brexit derided what they described as “Project Fear”… false warnings of economic doom.
What then will they make of separate, and chilling, statements from senior executives at Vauxhall and Airbus in the past 24 hours – industrial giants who between them directly employ more than 7,000 people on the edge of Liverpool city region?
Ongoing uncertainty over Brexit, they said, cast doubt on the long-term viability of their operations in the region. Beyond those 7,000 employees are many thousands more in the North West supply chain.
First up was Katherine Bennett, senior vice-president for Airbus in the UK, who talked about the potential of “critical” delays caused by post-Brexit customs barriers and paperwork.
The aircraft manufacturer’s business model sees aircraft parts moving seamlessly to and from its UK wing-making plants in Deeside and Bristol and those in other EU countries. Airbus spends around £5bn every year in the UK supply chains. It is a costly and logistically complex operation.
“It’s critical for our business to ensure that the wings that we build in Broughton and in Filton can get to France and Germany for the final assembly line,” said Ms Bennett.
“It’s really important that the parts don’t get held up in warehouses. We have a very just-in-time delivery system.
“It would be very expensive for us and a burden we don’t want to be suffering. Our key preference is for the UK to remain a home nation for Airbus. But we really need the conditions for us to be effective.
“We don’t want extra costs on our UK business which may make Airbus think differently about us.”
If that wasn’t warning enough along came Carlos Tavares, chief executive of PSA, the french carmaker that owns the Vauxhall site in Ellesmere Port where the Astra model is assembled. The site will employ around 1,400 when its latest round of job cuts is complete.
Before Christmas the company had warned the plant needed to improve its efficiency if it wanted to secure the next generation Astra model.
This week Mr Tavares cast further doubt on the future of the site beyond 2021 saying that a lack of clarity over Brexit was a big worry for the company. He added: “We cannot invest in a world of uncertainty.
“No one is going to make huge investments without knowing what will be the final competitiveness of the Brexit outcome.”
All this comes amid a backdrop of uncertainty in the European car market. Sales of sports utility vehicles, of the type made at Jaguar Land Rover in Merseyside, have risen in recent times while the estates and saloons made at Ellesmere Port have become less popular.
The notion of a North West manufacturing sector with Airbus and Vauxhall seems almost unthinkable and their fate is far from sealed. The closure of either would be Project Fear made real and no one can predict which way events will turn.