Bombardier exit shows the risks of continued Brexit uncertainty

The Canadian planemaker Bombardier has announced that it intends to sell its Belfast operation, currently employing some 4,000 highly-skilled workers, to a suitable buyer.

In a statement, the company said: “Our sites in Belfast [and Morocco] have seen a significant increase in work from other global customers in recent years.  We are recognised as a global leader in aerostructures, with unique end-to-end capabilities – through design and development, testing and manufacture, to after-market support.

“Bombardier is committed to finding the right buyer – one that will operate responsibly and help us achieve our full growth potential.”

The obvious question is, if the Belfast plant is a global leader in its field and has seen a significant increase in orders in recent years, why is Bombardier getting rid of it?

The answer, in one form or another, has to be Brexit, or at any rate the European Union.

Last year, in the wake of its ongoing spat with the Boeing Corporation, which resulted in the Trump Administration threatening tariffs of nearly 300 per cent on its CSeries jets, Bombardier sold a controlling stake in the CSeries to Airbus. At the time, the acquisition by the French-based giant was seen as a lifeline for the Belfast operation, which makes the wings for the aircraft – renamed the A220 – keeping it as the largest private sector employer in Northern Ireland.

Since then, however, Airbus has warned on several occasions that its corporate presence in the UK cannot be guaranteed should Britain pursue a hard Brexit, or indeed any form of departure from the EU that entailed leaving the Single Market. Up to now, the major concern in this regard has been the future of the Airbus plants in Bristol and South Wales, which between them employ some 13,000 workers.

But it now turns out that the Airbus/Bombardier plant in Belfast could be the first casualty, with or without Brexit. Its particular specialism, the design and fabrication of aircraft wings, could easily transfer to France or Spain, both of which would welcome the jobs. If the world’s largest planemaker, with its headquarters in Toulouse, is unwilling to commit itself to two wholly-owned UK subsidiaries, how likely is it to show fidelity to a companyt in Northern Ireland that is merely part of a wider tieup with Bombardier in French-speaking Montreal?

The story might yet end differently if the Northern Ireland backstop were to be endorsed by Westminster. In that event, NI would remain, uniquely, in the Single Market, with guaranteed tariff-free access to Europe. But the British Government, backed by the DUP in Belfast, has rejected that possibility, leading to the likelihood of some kind of hard border between the UK and the EU on the island of Ireland.

Moreover, having achieved a hard-fought comprehensive trade deal with the EU, Canada is likely in the near future to have at least as much access to the Single Market as the UK, meaning that Bombardier can sell into Europe directly without need of a British base.

Those who look to Canada to favour the UK over Europe when it comes to trade should probably think again. The prime minister of Canada, Justin Trudea, is French-Canadian, as are several members of his Cabinet, as is the Bombardier corporation.

(In the same way, when Australia decided to build a new submarine fleet for its navy, it turned to France, not the UK. The order, worth £26 billion, is one of the biggest in naval history. Pro-British sentiment in the former Dominions went out the window in 1972 when the UK announced that it was abandoning Commonwealth Preference in favour of the Common Market.)

But if Bombardier goes ahead with the sale, who might the purchaser possibly be? Not Boeing, surely, which spits blood at the name of its Canadian rival and is in any case mightily preoccupied with the scandal surrounding its troubled Max 8 aircraft. And hardly McDonnell-Douglas, unless, for some bizarre reason, it was looking for an overseas base outside the EU from which to sell its own range of medium-distance jets into Europe.

Which leaves who or what exactly? Russia? Hardly. Brazil? Unlikely. The list is a short one, with few obvious takers.

But maybe a white knight will emerge. Stranger things have happened. Perhaps BAE Systems could switch Bombardier Belfast back to missile production (in which, as Short Brothers, it used to be a world leader) or provide it with a role in the warplane sector. Or the Chinese or Indians might welcome the chance to move into aircraft manufacturing with a pre-skilled workforce from which to learn the ropes. There are certainly possibilities.

But if Bombardier cannot find a buyer, what then? Will it keep the Belfast plant open, adding hundreds more workers to the list of upcoming redundancies it announced last year, or will it simply close it down, ending Northern Ireland’s century-long involvement in planemaking?

Who knows?

All that can be said for certain is that Brexit is at least part of the reason why the decision to sell was taken. Bombardier looks like being the first thoroughbred to be put down in Britain’s Airbus stable. In the event of a no deal Brexit, it is unlikely to be the last.