Brexit, the economy and house prices part 5

Zero_Gravitas

Luckily for the engineers who used to make planes fruit picking is more fun than they would think...

https://ichef.bbci.co.uk/news/660/cpsprodpb/040B/production/_102153010_tim-001-1gm-22jun_front-_ne.jpg

spadoosh

Herzlos wrote: »

Airbus preparing to leave the UK if we don't get customs union access:
https://www.theguardian.com/politics/2018/jun/22/airbus-plans-uk-cuts-amid-fears-of-hard-brexit-impact


Because they are one of the thousands of companies that rely on parts moving between sites at a reasonable place (just-in-time). No customs union means either: stockpile enough parts to buffer against the delays (at huge cost for both the parts and the warehousing effort), or move the factories into the CU where the problems don't happen.


It's "just another company, not a big deal" will be the first Brexiteer response, but this one generates £1.7bn in tax every year. That's going to take a lot of replacing (unless they clamp down on tax evasion by the rich, in which case it's peanuts).

A quick google took me to the airbus financial results page. In that it says they pay 1.7bn euro in taxes each year (well 2017). The majority of which will be paid where most of the work is done, ie in france, germany, spain and china. The largest shareholders in the company are the french, german and spanish governments. Im not sure if those results include airbus uk (the subsidiary) but they turnover £2bn per year, they dont pay remotely close to 1.7bn anything in tax.

Aviation engineering is something we're pretty good at in the UK. Considering we dont have a national company as such that makes planes nor much in the way of an aerospace program we do considerably well in designing, making and selling products for the industry, all over the world.

Airbus are complaining about the lack of time etc they are being given but its all bluster. The figure bandied about was an additional £1bn in costs per year (Worst case). For a company that turnsover 66 billion euro its hardly a death sentence. Lets couple that with relocating 10,000+ jobs as well as getting the 100,000 jobs in the supply line set up. The logistics of moving all their euqipment and setting up the new factories. I can guarantee that will cost more. Then theyll still have the issue of things like not being able to move away from using rolls royce engines which obviously we could manipulate to further discourage such a relocation.


Its bluster. They want people to panic. It helps them get a stronger negotiating position. It seems to be working. I wish we had a strong government to call their bluff. They aint going anywhere, it will cost them more. Governments might work like that, multinational corporations do not. Its bad business.

Worst case scenario we end up on the same terms that the US have with the EU. Yet they employ 3000+ american people. Spent $600bn on a single 53 acre site (we have 2, one of which is on filton airfield which covers 350 acres, airbus wont be that big though) and have only been increasing there presence in america. Yet its not viable because of brexit? BS.

Graham_Devon

Herzlos wrote: »

Would you rather Airbus stayed quiet, and then just announced the move out of the UK once the deal is concluded, along with all the job losses. Or would you rather they tried to get the issue resolved before it was too late and ideally keep all the jobs?

That's how things normally work.

Going to the press simply shows their political stance in this. They want panic. They want, for their own reasons (and mainly because of the German infulence of ownership), brexit reversed. This was clear from their working with the remain campaign before the vote. They want to create panic, and have people lapping it up. You are.

Did you see BHS, Woolworths, Maplins etc going to the press? No, you heard about the outcome in the press.

Airbus have threatened enough times over brexit. If it's in their interests to leave, either econmically or politically, they would have done so by now....like they said they would...... but instead, they are still hear and still releasing panic stories in the press.

Filo25

Graham_Devon wrote: »

That's how things normally work.

Going to the press simply shows their political stance in this. They want panic. They want, for their own reasons (and mainly because of the German infulence of ownership), brexit reversed. This was clear from their working with the remain campaign before the vote. They want to create panic, and have people lapping it up. You are.

Did you see BHS, Woolworths, Maplins etc going to the press? No, you heard about the outcome in the press.

Sorry but that is s pretty spurious comparison.

If a company is in trading difficulties it clearly isn't going to tell the world, if it does do that suddenly credit dries up, suppliers start asking for greater guaranteees, etc. in short if the company is close to the edge, going public is quite likey to push it over.

Airbus aren't going to be going bankrupt anytime soon, they are just pointing out that if we make an entirely political decision of our own choice they may move some production, it is hardly the first time a company has made a similar comment and it isn't just in the UK.

Companies have actually kept remarkably quiet so far, given that by all accounts Downing Street hasn't really shown much interest in engaging with business interests.

It gets worrying reading the "reds under the bed" hysteria of EU conspiracy in any negative story about Brexit, if we genuinely get a proper Hard Brexit with disruption of supply chains, people are deluding themselves if they think that has no impact on manufacturing in particular (I'm also not saying some of that can't be offsert with competent management of the process).

Graham_Devon

Filo25 wrote: »

Sorry but that is s pretty spurious comparison.

If a company is in trading difficulties it clearly isn't going to tell the world, if it does do that suddenly credit dries up, suppliers start asking for greater guaranteees, etc. in short if the company is close to the edge, going public is quite likey to push it over.

Airbus aren't going to be going bankrupt anytime soon, they are just pointing out that if we make an entirely political decision of our own choice they may move some production, it is hardly the first time a company has made a similar comment and it isn't just in the UK.

Companies have actually kept remarkably quiet so far, given that by all accounts Downing Street hasn't really shown much interest in engaging with business interests.

It gets worrying reading the "reds under the bed" hysteria of EU conspiracy in any negative story about Brexit, if we genuinely get a proper Hard Brexit with disruption of supply chains, people are deluding themselves if they think that has no impact on manufacturing in particular (I'm also not saying some of that can't be offsert with competent management of the process).

Fair point on the differences - accepted.

There have been many companies that have left the UK though without making a song and dance in public. I can't think of them, probably because they haven't made the song and dance.

But the "reds under the bed thing". Airbus is partly owned by the Spanish, French and German governments. This isn't conspiracy, it's fact.

It doesn't take too much of a stretch to therefore understand why Airbus may have chosen this route, and chose the same route pre-vote, even taking a space with the government on the remain campaign.

And I can't say enough times. If they have followed through on any single one of their threats - Airbus would no longer be in the UK. Bu they are. Threat, threat, threat - but no action.

So sorry, for me, this is a boy who cried wolf story. All words, absolutely no action. Might be wrong this time, who knows. However, so far, we've had loads of panic creating statements from Airbus, but not a single bit of action.

Sure, I understand anyone on this forum arguing the remain side is going to make a lot of this story. Completely accepted. But the same people made a lot about Airbus before the vote (I remember the discussion and, particularly Hamish seeing Airbus as the next coming in relation to it's presence and threats). All I would suggest is to look at what they have said in the last 3 years. And then look at what they have done.

Search for posts by myself querying how airbus think it will be cheaper to re-employ their entire workforce and build new factories. We've had this argument around Airbus. it was just before the vote. I was saying then what I am now.

This time it could be different. But unfortunately, we're having to say "this time".

Graham_Devon

Infact here you go everyone.

2016.... Same argument. Same statements.

https://forums.moneysavingexpert.com/showpost.php?p=70536236&postcount=58

Filo25

Graham_Devon wrote: »

Fair point on the differences - accepted.

There have been many companies that have left the UK though without making a song and dance in public. I can't think of them, probably because they haven't made the song and dance.

But the "reds under the bed thing". Airbus is partly owned by the Spanish, French and German governments. This isn't conspiracy, it's fact.

It doesn't take too much of a stretch to therefore understand why Airbus may have chosen this route, and chose the same route pre-vote.

And I can't say enough times. If they have followed through on any single one of their threats - Airbus would no longer be in the UK.

So sorry, for me, this is a boy who cried wolf story. All words, absolutely no action. Might be wrong this time, who knows. However, so far, we've had loads of panic creating statements from Airbus, but not a single bit of action.

I personally know people working at a couple of companies who are making contingency plans for all eventualities in terms of Brexit modelling, they might not be going public about it but for a couple of people I have spoken to you won't be surpised to know that less access in the final deal generally means moving activity to the continent for their organisations at least.

These are businesses for whom at least part of their activity is B2C and a big part of the reason they aren't going public at this stage is that they don't want a political backlash at this stage from elements of the media seeing only the sunny uplands of Brexit, and deriding anyone else as EU stooges/traitors etc., easiest to just quietly get on with planning at this stage and hope that a better outcome can be achieved by government.

Airbus on the other hand as a B2B business, combined with its ownership doesn't really care about any UK political backlash, I doubt many Daily Mail readers are suddenly postponing plans to buy an Airbus plane and picking up a Boeing instead, I agree its intended to put pressure on the government but both "sides" have been doing that since the Brexit process began, hardly surprising its a political process.

None of this is a surprise, people have known since this process started that the longer it went on without much progress towards a deal the more concerned business interests would become.

Herzlos

Graham_Devon wrote: »

Infact here you go everyone.

2016.... Same argument. Same statements.

https://forums.moneysavingexpert.com/showpost.php?p=70536236&postcount=58

So Airbus are being consistent; No single market means no Airbus. That they haven't left already doesn't mean anything; we've no idea if we'll leave the single market.


Isn't there some sort of regulation/compliance thing that may prevent them from using 3rd country suppliers too, or is that to do with Galileo?

buglawton

Airbus's stance is predictable. Big industry lobbies have always leaned on governments to get what they want. Airbus's 'Press release' is just this. That's mainly how EU policy in many areas gets developed.

Countries that have never been in the EU deal with customs by having a free port or special economic area where the usual import/export rules don't apply.

Back in Blighty the equation goes:
Customs Union or Norway Solution = No change to immigration policy.
UK needs to manage it's immigration locally = Exit the customs union and go to WTO.

May's and Parliament's blowing of hot air ever since the referendum has been just a procrastination exercise while refusing to face the outright dilemma above.

Herzlos

I've never heard of a free port where the rules don't apply. Countries outside the EU deal with the customs stuff either by prior arrangement, or sending stuff in plenty of time. The former means a bit more paperwork, the latter meaning expecting to have huge amounts of capital just sitting about in a dock for a few weeks until it gets sorted.