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Cont: Brexit: Now What? Part 5

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Aber

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Posted By: Darat
The Don said:
No doubt all of this was covered in excruciating detail in David Davis' industry sector impact analyses and various mitigating strategies identified. :rolleyes:
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From Airbus' own risk assessment:

No deal Brexit

In case of the UK leaving the EU without a deal on the 29th March 2019, there would be no Transition Phase, the UK would leave the Single Market, the Customs Union and the European Court of Justice jurisdiction. Therefore, WTO rules would kick in and numerous frictions would heavily impact our operations and that of our supply chain.

Airbus’ production is likely to be severely disrupted due to interruption to the flow of parts and/or discontinued airworthiness. Given today’s prevailing uncertainty, buffer stocks would be needed (estimated value circa €1B, not accounting for lead time and logistics disruptions).

Given Airbus’ steep ramp-up demands on the best-selling A320 and A350 families, our critical industrial capabilities are already running at full capacity. With no spare capacity left over years to come, every disruption to production would most likely turn into an unrecoverable delay.

Every week of unrecoverable delay would entail material working capital impact, re-allocation cost, cost for inefficient work, penalty payments to customers and up to €1B weekly loss of turnover. Despite the incremental stocks, the disruptions in a no deal Brexit situation are likely to add up to several weeks; potentially translating into a multi-billion impact on Airbus.
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Which is why they wrote to Michael Barnier asking why he was preventing contingency plans being discussed.

UK jobs are at risk in the longer term, but in the shorter term it is Airbus as a whole that is at risk.

EDIT: And of course if Airbus needs government support in the short term, Boeing will be running straight to the WTO.
 
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Farage Tweets

"Hardly surprising Airbus are threatening us today when they've taken billions in EU funding."

Bloody EU, subsidising companies to provide British jobs.
Personally, I can't wait till I'm fighting off the rats for the last packet of Super Noodles.
 
I suppose this is good news for businesses like mine, the government has woken up to the fact that there is a service industry (and that we have a trade surplus with the EU). The bad news is that the response is to demand that the EU drops trou and gives the UK frictionless access to the EEA without the UK having to meet any criteria the government doesn't want to meet.


In a speech at a business festival in Liverpool, Business Secretary Greg Clark today insisted that services must be part of any Brexit deal with the EU and issued a series of demands.

UK employees servicing EU customers must be allowed to travel just as frictionlessly as the goods that have dominated the negotiations so far.

Professional qualifications of UK workers must be recognised in the EU to allow companies to send qualified staff at short notice to perform business-critical functions including training or installing, servicing and repairing products sold to EU customers.

UK firms must also be able to send any profits generated by services delivered in the EU back to the UK.
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https://www.bbc.co.uk/news/business-44561987

IOW the usual combination of entitlement and special pleading from the UK.

The magical thinking continues regarding customs

First, the maximum facilitation (max fac) model which envisages using new (unspecified) technology to reduce friction at our ports, airports and, crucially, at the border between Northern Ireland and the Republic.

Second, a new "customs partnership" that would see the UK collecting EU tariffs on goods bound for European markets on the EU's behalf - and sending them on to Brussels - with the option of paying refunds on goods remaining in the UK.

The first option will cost UK business up to £10bn per annum - and £20bn in total for both sides - according to HMRC. It's a calculation not disputed by the business secretary.

The second has been dismissed as unworkable by the EU, which says it would essentially make the UK a border authority for a bloc of which it was no longer a member.
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Lucky we have £350m a week :rolleyes:
 
The Don said:
I suppose this is good news for businesses like mine, the government has woken up to the fact that there is a service industry (and that we have a trade surplus with the EU). The bad news is that the response is to demand that the EU drops trou and gives the UK frictionless access to the EEA without the UK having to meet any criteria the government doesn't want to meet.

https://www.bbc.co.uk/news/business-44561987

IOW the usual combination of entitlement and special pleading from the UK.
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Surely it's only special pleading if the UK wasn't offering reciprocity on all of these (which I assume it will be).
 
Aber said:
Surely it's only special pleading if the UK wasn't offering reciprocity on all of these (which I assume it will be).
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Good point :o

Though I query whether the UK is seeking a symmetrical relationship and hence having full reciprocity.


edited to add....

Actually it is special pleading IMO, expecting the EU to move on some or all of its "red lines" but being completely unwilling to move on any of the UK's red lines.
 
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One problem with unemployed UK Brits taking jobs like fruit-picking is the problems getting back on unemployment/JSA/whateverthehellitsrebrandednext. I know there are categories for seasonal work but the general incompetence of DWP, its hostility and now the threat of the period of no benefits under the Universal Credit scheme and the ease with which people are sanctioned would make me very wary of risking it.
 
Wudang said:
One problem with unemployed UK Brits taking jobs like fruit-picking is the problems getting back on unemployment/JSA/whateverthehellitsrebrandednext. I know there are categories for seasonal work but the general incompetence of DWP, its hostility and now the threat of the period of no benefits under the Universal Credit scheme and the ease with which people are sanctioned would make me very wary of risking it.
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The areas of highest employment round me voted to leave in large numbers. Seems that bussing them to east Anglia and Lincolnshire to work and live in temporary tin huts for the summer is the best reward they could get. Withdrawing their benefits if they refuse to take up meaningful employment is not unreasonable considering the situation is one of their own making.
 
The BBC documentary "The Day Migrants Left".


From the BBC
Evan Davis presents a programme exploring the effects of immigration in the UK by focusing on Wisbech, a town in Cambridgeshire.

Since 2004 this once prosperous market town has received up to 9,000 immigrants seeking work - the majority from Eastern Europe. But with nearly 2,000 locals unemployed and claiming benefits, many of them blame the foreign workers for their predicament.

To test if the town needs so many foreign workers, immigrant employees are temporarily removed from their jobs, and the work given to the local unemployed. Now the town's British workers have a chance to prove they can do it.

Eleven British unemployed workers are recruited to go into a range of different Wisbech workplaces including a potato company, an asparagus farm, an Indian restaurant and a building site run by a local landlord.

Moving beyond the workplace, Evan Davis investigates how the town's local public services, such as schools and the NHS, are coping with the demands of the new arrivals.

As the British unemployed workers get to grips with their new jobs, this documentary examines the facts and dispels the myths around the subject of immigration.
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The Don said:
edited to add....

Actually it is special pleading IMO, expecting the EU to move on some or all of its "red lines" but being completely unwilling to move on any of the UK's red lines.
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How are:
- recognition of qualifications
- repatriation of service income
- client visits

captured by the EU red lines?

IIRC mutual recognition of qualifications was in the list of things the EU requested; service income will also include stuff like Google advertising booked in Dublin and Netflix revenue booked in Belgium. Client visits is more arguable, but short-term working visas shouldn't be an issue.
 
"We can't sign off on the EU Withdrawal Agreement, or agree a Transition Period, unless there is a solution to the imperative to avoid a border in Ireland. If there is not, then no deal"

"Ah OK but no deal means a border in Ireland"

"Um . . . ."
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:rolleyes:
Right. The EU won't let the UK get away with any crap regarding it's departure from the EU and UK throws a snit.
 
Aber said:
How are:
- recognition of qualifications
- repatriation of service income
- client visits

captured by the EU red lines?

IIRC mutual recognition of qualifications was in the list of things the EU requested; service income will also include stuff like Google advertising booked in Dublin and Netflix revenue booked in Belgium. Client visits is more arguable, but short-term working visas shouldn't be an issue.
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You're looking at a single, narrow, point. I am considering the broader picture. The UK is hoping (expecting ?) that the EU will provide us with most of the benefits of EEA and/or customs union membership without having to do any of the things that we don't want to. Heck the whole "customs partnership" model is based on this kind of asymmetrical thinking.
 
The Don said:
You're looking at a single, narrow, point. I am considering the broader picture. The UK is hoping (expecting ?) that the EU will provide us with most of the benefits of EEA and/or customs union membership without having to do any of the things that we don't want to. Heck the whole "customs partnership" model is based on this kind of asymmetrical thinking.
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The obvious red lines for the UK are:
- no freedom of movement
- no ECJ jurisdiction

For the EU they are:
- indivisibility of the 4 freedoms

Beyond that everything is up for negotiation. In reality the best economic solution for both sides is as close a relationship as possible without breaching the red lines.

The perceived asymmetry comes from the theorists in the EU who want a clear division between deals with "third countries" and EU rules, even if that ignores previous deals the EU has done, and would harm EU economic interests. They are entitled to take that approach, but they too are cherry-picking.
 
Can I be the first person to say "floodgates"...?

BBC News: BMW joins Airbus in Brexit warning

"The car giant BMW has followed plane maker Airbus in warning of the adverse consequences of Brexit.

BMW UK boss Ian Robertson told the BBC it needed clarity by the end of the summer. It makes the Mini and Rolls Royce in the UK.

Earlier, Airbus warned it could leave the UK if it exits the European Union single market and customs union without a transition deal.

The UK government says it is confident of getting a good deal for industry.

The customs union brings together the EU's 28 members in a duty-free area, in which they pay the same rate of duty on non-EU goods."
 
Airbus has issued lots of warnings saying it's about to leave, but hasn't left yet. That's not to say it won't leave, of course, but it won't be as quick or as easy as they're implying.

Airbus spent about half a billion modernizing the wing-building plant. If they want to build a similar plant, say in Poland, then they'll have to spend the same again, and then also spend a lot of time moving / training and building up all the expertise necessary. In the meantime they'll still have to fulfil existing orders for airliners, and they won't want to pay tariffs on all the wings for them as those would come out of their profits.

Airbus is heavily dependent on EU grants - some of which have been ruled illegal by the WTO, and they've had to pay big fines as a result. I wonder how much influence has been bought to bear on Airbus by the EU.

Airbus has built new factories in China and the USA before Brexit was even a thing. It makes you wonder how they are able to give lavish press releases about the benefits to them of building new plants in those non-EU countries, but seemingly unable to continue working in a future non-EU UK.

So yes, perhaps they will eventually leave, or perhaps they're just crying wolf because they think it gives them some potential commercial benefit. Perhaps the UK government will give them what they want and negotiate a BRINO. Time will tell.
 
Aber said:
Posted By: Darat


From Airbus' own risk assessment:



Which is why they wrote to Michael Barnier asking why he was preventing contingency plans being discussed.

UK jobs are at risk in the longer term, but in the shorter term it is Airbus as a whole that is at risk.

EDIT: And of course if Airbus needs government support in the short term, Boeing will be running straight to the WTO.
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unicorn.jpg


from

https://twitter.com/how_apt/status/1010140078348357633
 
A no deal Brexit - and all that entails - is a distinct possibility :(

Senior Cabinet ministers have insisted the UK is prepared to walk away from Brexit talks without a deal, on the second anniversary of the vote.

Liam Fox said Theresa May was "not bluffing" over her threat to quit negotiations, while Boris Johnson called for a "full British Brexit".
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https://www.bbc.co.uk/news/uk-politics-44575929
 
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