Failure to secure a Brexit deal that maintains the current strategic relationship with the EU will cause significant supply chain and investment problems for the UK aerospace industry warns a new report from the Institution of Mechanical Engineers.
The sector – which employs over 120,000 people – generated £35bn in turnover in 2017, with £30bn in revenue from exports, which grew 39 per cent between 2012 and 2017.
The industry, which is highly specialised and dominated by multinational companies, depends heavily on participation in European and global supply chains. The movement of skilled workers and the freedom to trade with customers, group companies and suppliers across the EU are key factors behind decisions to invest in the UK.
The report, UK Aerospace: The Impact of Brexit, warns that if the UK leaves the EU without an appropriate deal in place, then aerospace companies will face supply chain disruption and higher manufacturing costs if imports from the EU are subject to tariffs and restrictions.
It adds that if restrictions are placed on the movement of people and goods, these will create logistical problems for many companies due to a lack of readiness, as well as the cost and delay resulting from additional customs and immigration checks.
These factors will increase the time it takes to manufacture products, raise operating costs and hamper the UK sector’s global competitiveness, the study concludes.
“It is important that the UK aerospace industry is able to maintain its high value manufacturing, world-leading research and growing international trade without any disruption,” said Colin Brown, chief executive of the Institution.
The report calls on the government to negotiate a Brexit deal that maintains the strategic partnership with the EU and also to increase investment in the electrification of aircraft propulsion technology. It also recommends that the government increases the availability of funds for UK SMEs to invest in digital and automated manufacturing machinery and training.
IMechE’s comments echo warnings made elsewhere in the UK aerospace sector. Last year, Airbus commercial aircraft COO Tom Williams said: “Put Simply, a No Deal scenario directly threatens Airbus’ future in the UK.”
Meanwhile, earlier this week (9th January) the sector’s trade body ADS Group urged MPs to support Theresa May’s withdrawal agreement. “It is in the best interests of the UK’s aerospace, defence, security and space industries for the Withdrawal Agreement to be endorsed by Parliament,” said its chief executive Paul Everitt. “Further delay increases the risk of a no deal Brexit. This would be the worst possible outcome and would bring significant disruption to industry in the UK and Europe, damaging jobs and growth.”