PM bullish in face of fears that collapse of BAE Systems/EADS merger will lead to Airbus contracts moving outside UK
The collapse of the proposed £25bn merger between BAE Systems and Airbus owner EADS will not lead to a “downgrading” of the British aerospace industry, the prime minister has pledged.
David Cameron said Downing Street’s willingness to sanction a transaction involving Britain’s largest defence contractor and the Franco-German company behind the A380 was a “sign of how positively engaged and committed” the UK government is to Airbus.
The deal would have created an industrial group with around 50,000 UK jobs, but the failure to reach agreement, in the face of opposition from the German government that rendered the UK’s backing futile, has left open the prospect that Airbus will move UK-based work elsewhere. Airbus wings are made in Broughton, north Wales.
Referring to a forthcoming overhaul of EADS’s shareholder structure that will give the French and German governments stakes of 12% each in the company, Cameron added: “This is becoming more and more an open and commercial company driven by open and commercial decisions. Given the great performance of the workforce I do not see any reason why we should see a downgrading of what is done here in the UK. The company has been very bullish about the performance of the UK.”
Cameron was speaking at an event at the Broughton site to mark a $9.4bn order of Airbus A320 aircraft by AirAsia, the Kuala Lumpur-based airline founded by Tony Fernandes, the owner of QPR football club.
Fabrice Bregier, the Airbus chief executive, said the UK remained a key hub for the company’s manufacturing setup. “We consider that the UK … is really the centre of excellence in the world for the development and production of wings and we don’t intend to change that.”
However, the most senior British Airbus executive, Tom Williams, warned that the UK had to continue investing in the aerospace industry, in the wake of a slew of investments announced by George Osborne, the chancellor, and Vince Cable, the business secretary. “No one is guaranteed a job any more. The only guarantee of a job is that you continue to be competitive, continue to have a high standard of quality and deliver on time, as well as continuing to do the research and development.”