Airbus not alone

Airbus has received £340m in government loans to help secure future A350 XWB activities in the south-west region.

The investment is expected to create and sustain 1,200 jobs within Airbus’s facilities in Filton, near Bristol, and Broughton in North Wales, as well as more than 3,800 jobs in the supply chain.

Business secretary Peter Mandelson said that the agreement was ‘excellent news’ for the UK aerospace industry and would allow the country’s aerospace-component manufacturers to improve their competitiveness in the global market.

‘This agreement is further evidence of this government’s long-term commitment to the UK aerospace industry and its future success,’ he said.

‘Aerospace is one of the UK manufacturing’s crown jewels and manufacturing is one of the UK economy’s crown jewels.’

The investment comes in the form of risk-sharing participation from the government’s £750m Strategic Investment Fund and follows an earlier £60m government loan to GKN for the design and development of the rear spar and trailing edge of the A350 XWB.

Tom Enders, Airbus president and chief executive, said: ‘This partnership with the UK government means that the UK taxpayer can expect a sound return on their investment and ensure the aviation industry continues to thrive in Europe and around the world.’

The news was welcomed by the aerospace industry, which received it as a vote of confidence in the UK’s manufacturing sector and a way of securing future skills.

Ian Godden, chief executive of the Society of British Aerospace Companies (SBAC), said: ‘The significant technological advances of the composite materials being used means that the importance of the A350 programme in developing the skills and technology for the future sustainability of the UK aerospace industry cannot be exaggerated.’

As well as securing skills jobs, Jane Henderson, chief executive of the South West Regional Development Agency (RDA) added that the composite materials would boost the UK’s efforts to reach its carbon-reduction goals.

‘We are especially pleased that the new aircraft will use light-weight carbon-composite materials, helping the sector achieve a significant reduction in carbon-dioxide emissions,’ she said.

‘The agency has played an important role in supporting research and development into composites that will be directly utilised in this project.’

The government’s support of the Filton and Broughton sites comes on the back of a survey by the South West RDA that revealed overall optimism of business performance over the coming year.

Around three-quarters of the businesses surveyed in May and June said they would survive continuing economic pressures over the next 12 months.

In addition, the figures indicated that manufacturing and service companies across the region felt an increase in confidence about their long-term prospects.

However, the RDA warned that manufacturers should remain cautious about a return to normal trading despite increased government support and a recent bout of restocking.

Nigel Jump, chief economist at the South West RDA, said: ‘There are a few short-term factors that could be seen as potential threats to the recovery within the south west, such as the levels of discretionary income and the effects of the swine-flu pandemic.’

Rupert Cox, interim chief executive of inward investment body, Into Somerset, said that while businesses in the region were cautiously optimistic, the government should take more direct action to improve their prospects.

‘Government is right in this scenario to try and secure jobs in a vital sector.

‘I think from a business perspective we will be better to see this level of loan directly into a business than into a banking system where no one is ever going to see it again.

‘Directly preserving jobs is what Peter Mandelson has been speaking about for the past six months but this is the first time he has been able to have a go at it.’