Written evidence from Airbus
Airbus is a global company, and one of the world's
leading aircraft manufacturers, Airbus consistently captures approximately
half of all orders for airliners with more than 100 seats. Airbus
in the UK is world-renowned for its centres of excellence for
both wing design, integration and manufacture.
Airbus has two UK sites located at Filton near Bristol
and Broughton in North Wales, with a current workforce of more
than 10,000 people. These sites are responsible for wing research
and technology development, wing design, manufacture, management
of the wing supply chain and wing integration.
The Broughton plant is widely acknowledged to be
the world's leading manufacturer of large civil aircraft wings.
The principal focus at Broughton is on high value adding tasks
that include long-bed machining of large-scale components such
as wing skins and spars and the assembly and equipping of complete
wings.
Any audit of UK technological performance would rank
the Airbus wing technology developed over the last three decades
as among the country's most significant achievements. This has
given the UK and Europe a lead in wing technology that has played
a major role in the market success of Airbus.
Airbus works closely with the Department of Business,
Innovation and Skills and UKTI on trade and investment issues
and are happy to submit comments to the Committee's inquiry. We
also support the submission made by our trade association, ADS
to the Committee.
1. GENERAL BACKGROUND
TO AIRBUS'
CONTRIBUTION TO
UK
In the UK, Airbus currently has a workforce in excess
of 10,000 people. More than 400 companies are part of its UK supply
chain located across the length and breadth of the UK. Currently
Airbus programmes are supporting around 135,000 jobs in Airbus
in the UK, its UK supply chain companies and from induced employment
in the local economies.
Aerospace generates high quality, high value adding
jobs that require well-qualified people. Industry analysis shows
that 31% of UK aerospace industry employees held a university
degree or equivalent. Additionally, many of the "manual"
or "other" categories (which includes technicians and
draughtsmen) frequently have some form of specialized, non-university
training, either within the Aerospace industry or from external
bodies.
Training—Airbus
devotes considerable time and money to the training of its people
and has excellent apprenticeship and graduate training schemes.
Currently some 640 apprentices and 100 graduate trainees
are receiving training under these schemes. More than 6,000 apprentices
have been trained under the Airbus apprenticeship scheme over
the last three decades.
Infrastructure Development—Airbus
UK has invested more than £2 billion
in capital expenditure projects over the last
decade in upgrading the company's UK facilities in areas such
as new engineering design equipment, the latest production equipment
and jigs and tools.
R&D Investment—It
is widely recognised the important role that innovation and research
and development will play in improving productivity and supporting
economic growth. The UK Aerospace sector is one of the UK's biggest
investors in research and development and is making a significant
contribution towards the Government's R&D investment goals.
Airbus is one of the UK's biggest inward investors in R&D.
The company has been ranked in the top ten UK R&D investors
in the DTI's R&D Scoreboard for the last four years. Airbus
in the UK has a particularly good track record in terms of the
level of R&D investment per employee, with the R&D investment
intensity averaging over £30,000 per head in recent years.
2. ROLE OF
BIS IN PROVIDING
SUPPORT FOR
EXPORTS AND
INVESTMENT
It is clear that the role of BIS on this issue is
absolutely key in the current economic climate. Government support
for UK companies and the products they produce can make an important
difference to the success of sales campaigns. As a global company
with sites located in several other companies, Airbus has the
benefit of the support of other governments too. The UK Government
is a key player in this support as it has a strong reputation
for diplomatic relations and reliability.
Airbus regularly provides BIS and UKTI with update
on key sales campaigns around the world and on a regular basis
the Government shares with us information on sales missions they
are organising. Over the last few years this process has been
tightened up, Airbus is always keen to find when Minister are
on visits to other countries as far in advance as possible which
can therefore give Airbus the opportunity to provide a briefing
or facilitate events or visits. Other governments share the planning
of their Ministers more extensively.
There is a question as to whether the different government
departments are as joined up on this issue as they could be as
this would certainly allow the creation of a more coherent and
sophisticated messages around British business. These messages
could be formed and then advocated in the full knowledge of other
relevant foreign trips to potential partner countries and customers.
There is a concern that budget reductions within
UKTI will lead to a reduction in the trade advisers based not
only in the UK but also in the Embassies abroad. They play an
important role in briefing the Ambassador on industry issues.
3. ROLE OF
UKTI WITH REGARD
TO IDENTIFYING
OPPORTUNITIES
It is clear that UKTI have significant resources
in terms of expertise and people who undertake the role of export
promotion and inward investment. The aerospace and defence team
play an active role in keeping in touch with issues affecting
their sector and regularly provide opportunities for Airbus to
interact with potential suppliers and other important stakeholders.
Airbus has a sophisticated network of sales people across the
globe so they do not need to use most of the resources of the
advisory service provided. However, on occasions the British Ambassador
gets involved in promoting UK aerospace sales campaigns.
The UK -China Working Group is a good example of
activity undertaken by the UKTI when a number of useful meetings
have been arranged.
UKTI also consults with Airbus and other aerospace
companies on key strategic markets and then develops a programme
focused in that area. Airbus is happy to support this strategy
but appreciates that resources are stretched and priorities have
to be made.
4. ECGD
Over the last decades the support of export credit
agencies such as ECGD and US Eximbank support have allowed aviation
to grow and thus supported growth of global GDP. At the same time
airlines were therewith enabled to constantly modernise their
fleets with more eco-efficient aircraft driving down emissions
and environmental impact. All things considered, ECA funding has
been a win-win situation for airlines, manufacturers and governments
alike over many, many years.
In the many years of relatively strong commercial
financing available, many airlines chose not to utilise any ECA
or US Eximbank support. Even in 2010, only a minority of Airbus
customers made use of this instrument.
During the economic crisis, the support of ECA and
US Eximbank has brought stability to aviation, secured thousands
of jobs, avoided know-how losses and allowed for continued modernisation.
As the economy recovers Airbus sees absolutely no excess capacity
but rather growth and profitability returning
There are certain key priorities for Airbus in terms
of future partnership with the ECAs in Europe:
- To carry on the implementation of fronting between
the ECAs so that it becomes a common feature in Europe. This means
in essence that one of the 3 ECAs with whom Airbus works would
lead on a particular aircraft deal and thus save Airbus and its
customers from going to individual ECAs.
- Market allowing, to press for capital market
solutions that would put Airbus customers in the same situation
as they can have with US Eximbank.
- To press the commercial banks to provide financing
for airlines so that the percentage of ECAs support will be reduced.
It is clear that a very high percentage of ECGD's recent activity
has been directed towards aviation projects. Whilst this support
has been vital, other forms of financing support should become
available in an increasingly stable economy.
5. THE ROLE
OF THE
BRITISH BUSINESS
AMBASSADORS
It is clear that businesses considering investment
often seek the views of other business people so the strategy
is sensible. We will be interested in seeing how this new arrangement
works.
26 January 2011
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