Airbus has warned that it may have to stockpile inventory in a bid to operate smoothly following Brexit.
The stockpiling is expected to help reduce costs and disruption once the UK leaves the European Union (EU).
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Airbus UK senior vice-president Katherine Bennett told the BBC that the company is required to decide very soon whether to go ahead with stockpiling.
According to Vendigital Aerospace head Paul Adams, the concerns expressed by Airbus have increased the stakes for the UK Government ahead of Brexit.
Adams said: “Despite stating it is committed to manufacturing in the UK, Airbus knows that substantial cost increases and delays could follow Britain’s exit from the EU.
“The company has recently invested in a new wing test facility in the UK, which could potentially provide the focus for a massive ongoing investment here. However, this announcement makes it clear that additional taxes and tariffs will need to be offset.”
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By GlobalDataAdams further noted that the time to start stockpiling has probably passed, as orders for forgings typically take 18 months to complete, so Airbus should have started stockpiling last year to have sufficient parts at its UK-based site from March next year.
The latest comment from Airbus is meant to unsettle the UK Government and persuade the government to review the use of subsidies, alleges Adams.
If Airbus decides to proceed with stockpiling now, additional pressure would be put on suppliers at a challenging time, Adams added.
In a separate announcement, Airbus said it will meet with the European Works Council members to discuss the possible impact on jobs from falling production rates of the A380 and A400M planes.
