Sale of 20% shareholding in European airframer will not affect country’s status as wing centre of excellence
The likely effect on UK jobs of BAE Systems’ decision to sell its 20% stake in Airbus to EADS is being hotly debated, with the Franco-German giant insisting that becoming 100% owner of Airbus will strengthen its hand as the UK’s biggest aerospace employer.
Despite warnings from unions and politicians that the long-anticipated move could hit UK workshare in future Airbus programmes, EADS, BAE, government ministers and the Society of British Aerospace Companies (SBAC) are all insisting that the UK will retain its status as the leader in wing technology in the four-country operation. Airbus employs 13,000 people at plants in Bristol and Broughton.
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Although EADS valued BAE’s stake at €3.5 billion ($4.2 billion) in its annual report, analysts have said EADS could pay up to £4.5 billion ($6.4 billion). A team of investment bankers appointed by both sides will thrash out a market valuation over the next weeks. Although EADS is not obliged to buy the stake, it is inconceivable BAE would sell to an outside investor instead.
UK trade and industry secretary Alan Johnson says BAE’s move will not change its decision to offer launch aid for the A350. The right of European governments to fund the development of the twinjet with loans is currently the subject of a World Trade Organisation dispute with the USA. “We are keen to do launch investment for the A350, as we did for the A380,” says Johnson.
SBAC director general Sally Howes says the decision was “long anticipated” and “is an opportunity for further investment in the UK aerospace industry. It also reaffirms EADS’s long-term commitment to the UK.”
The society adds that it has “no reason to believe that any of these high-value jobs would go overseas” and that it expects there to be “no impact on the UK supply chain, because Airbus operates a centralised procurement policy”.
The move ends more than 35 years of involvement in Airbus by BAE and its predecessors. In 2005, Airbus accounted for almost 20% of BAE’s £15.4 billion revenues and 23% of its pre-tax profits of £1.18 billion. The European airframer became a single company in 2001.
MURDO MORRISON / LONDON
Source: Flight International
