UK risks future in aerospace if A400M canceled Britain will put up to 8,000 jobs in danger and risk losing its place as the world leader in aeroplane wing-making if the Government cancels its order of A400M military transport aircraft, the country's largest industry body has warned.
By Amy Wilson
Published: 7:32AM BST 10 Jun 2009
The A400M, built by Airbus, has been beset by delays of up to four years and its future is under intense scrutiny as European governments try to make savings after blowing a hole in their budgets with measures to alleviate the financial crisis.
If Britain pulls out of its order for 25 A400M planes, "the probability that in 15 years time the UK has a fully-fledged composite wing manufacturer will reduce substantially," said Ian Godden, chief executive of the Society of British Aerospace Companies (SBAC). "If the UK government does not fund [the work] then Germany and Spain will pick it up."
If the expertise in wing manufacturing is lost, Britain also risks missing out on its share of work in building the next generation of short-distance, or single-aisle, commerical planes. That market, for replacements to the Boeing 737 and Airbus A320, is estimated to be worth $1 trillion over twenty years.
"We're in a fragile position and any signal could be damaging," Mr Godden said. "The A400M is a military project but it will send a signal to the civil side" on how far the UK is willing to suport its aerospace industry.
The Ministry of Defence declined to comment on the A400M order, ahead of a deadline next month. The seven partner countries which have ordered a total of 180 A400M's agreed in March to postpone until July 1 the decision on whether to scrap the project.
Mr Godden of the SBAC forecast a wave of consolidation between defence companies in a year's time, as cuts in the US defence budget make earnings growth harder to come by. The largest players will need approval from their national governments before striking deals and that has not come yet, he said.
"The US defence budget is going to be cut no matter how optimisitic you are, and I would argue the cuts could be quite deep," he said. "Peter Mandelson [the Business Secretary] and his counterparts have asked us about it but there has been no clear signal yet to say consolidate away."
In the UK, aerospace sales rose very slightly in 2008, up to £20.6bn from £20.4bn the previous year, according to the SBAC. The problems hitting the global airline industry as a result of the recession squeezed orders, which fell 23pc to £35bn. The industry body forecast a "difficult period in the immediate future."
Source
http://www.telegraph.co.uk/finance/newsbysector/industry/defence/5492432/UK-risks-future-in-aerospace-if-A400M-cancelled.html
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