Airbus Group’s UK president has warned that a UK exit from the European Union would pose “huge” economic risks and stressed that thorough consideration of the long-term impact is essential.
Paul Kahn urged companies to declare their support for the UK’s remaining within the EU, telling delegates at a Welsh-oriented event in London on 20 May that the debate about its membership had been “dominated by negative and often emotional rhetoric”.
“It’s clear that the long-term economic risks presented by a potential British exit are huge,” he said, pointing out that Airbus would “absolutely” rethink future investment in the UK – where it builds wings for its entire aircraft range – if economic conditions became less favourable than elsewhere in Europe.
He cited a German study which suggested that the UK economy stood to lose £200 billion ($310 billion) by 2030, in a worst-case post-exit scenario.
“I don’t believe that there is anyone who has run a global business who can truly, and clearly, argue that there will be greater value and economic benefit outside of the EU, as opposed to in it,” he said.
Kahn told the audience that other senior Airbus executives, including group chief Tom Enders, are “deeply concerned” over a possible UK withdrawal.
While Airbus could not immediately shift its Welsh-based wing-production organisation, Kahn says there would be an “impact” on the UK’s competitiveness. “And remember, there are other nations out there who want to steal our lunch – who are thinking strategically and long-term,” he warns.
Referring to his experience in conducting business with the EU from Canada, he says that operating outside of the union, rather than within it, was “a hell of a lot more difficult, more bureaucratic and more costly”.
He acknowledges that EU can struggle with bureaucracy – stating that he is not “naively ignoring its flaws” – and he supports the UK’s efforts to implement reform.
But he cautions against believing that the UK, as a standalone entity, would hold the necessary influence to negotiate better terms with trading partners inside and outside of the remaining EU.
“Now is not the time for industry to be mealy-mouthed about the EU,” Kahn stresses, adding that UK membership of the single market has enhance trade with its fellow European countries. “And there is little evidence that trade overall has been diverted away from other major trading partners.”
Kahn says that the UK-built wings are Airbus’s “crown jewels”, but points out: “We are their custodians, not their owners.”
“Our customers aren’t buying Welsh wings. They are buying a globally competitive European aircraft, the wings for which happen to be made in Wales, and designed in England,” he adds. “The investment Airbus has made to manufacture wings in Broughton, and design them in Bristol, reflects the competitive economic conditions and free movement of resources facilitated by membership of the EU.”