Bombardier row is a cautionary lesson in the folly of Brexit
US threats to firm’s survival expose UK’s vulnerability without collective EU muscle
A worker inspects a C-series plane wing in the Bombardier factory in Belfast. Photograph: Clodagh Kilcoyne/Reuters
During the second World War, Short’s Northern Ireland plants built military aircraft – notably the Short Sunderland flying boat which, along with American PBYs, British Catalinas and Canadian Cansos (three different names for locally manufactured versions of the same plane), hunted submarines in the Atlantic, where the three allied navies operated almost as one.
So when Canadian-born Bombardier sought a bridgehead in Europe, Shorts must have seemed a good buy not only financially, but symbolically too.
That was back in 1989. But recent events in the US and Britain have badly shaken the Atlantic relationships on which Bombardier’s presence in Belfast is based.
This week’s decision by the protectionist Trump administration to aggressively back US aircraft manufacturer Boeing in a trade dispute with Bombardier may, unless swiftly reversed, threaten the survival of the Quebec-based company.
None of the parties most in need of the EU’s help are in a position to call for it
The US department of commerce has accepted claims by Boeing that UK and Canadian government investments in its Canadian rival’s new C-series jet are illegal state subsidies, and has set import tariffs at 219 per cent.
Even the mere threat of these tariffs could kill off the C-series, which depends on a seed order for 75 planes from US Delta Airlines to get its assembly lines rolling. If the C-series is stillborn, Bombardier itself may not long survive it.
Workforce of 4,200
The Belfast plant, which is to build the wings for the new plane, would in turn be gravely threatened; it is one of the biggest private manufacturing concerns in Northern Ireland, employing 4,200 mainly skilled workers. At least another 16 local engineering firms feed into its supply chain.
The collapse of Bombardier would be a desperate loss for Northern Ireland and the United Kingdom. Stormont’s first minister, Arlene Foster, has asked US vice-president Mike Pence to intercede on Belfast’s behalf. Prime minister Theresa May has said she is “bitterly disappointed” at the US action, and called Donald Trump to explain the threat to Northern Ireland’s economy.
The Trump administration’s decision to back Boeing is, or ought to be, a stinging wake-up for Britain, which voted to leave the EU on the assumption that it would be able to make up for lost European trade by striking sweetheart deals with other countries – first and foremost the United States.
Instead, America now shows itself willing to trash its neighbours’ industries in pursuit of its own short-term and relatively trivial gain – the Delta deal to buy C-series jets is worth only about $1.5 billion (€1.27 billion); in the EU, Ryanair alone recently ordered 100 new Boeing 737s for an estimated $10 billion, on top of the 400 it already operates.
Canadian prime minister Justin Trudeau sought some leverage this week by threatening to back out of a commitment to buy Boeing-manufactured F18 fighter-bombers for the Canadian Air Force (thereby throwing into reverse the warplane co-operation of the second World War). Theresa May has made similar, but less specific threats.
Their warnings may yet have some effect on the Americans; the US Trade Commission will have to rule on this week’s decision early next year. But anything less than a climbdown by Boeing or the US government – and any significant delay in either – could stifle the C-series project at birth.
There is, of course, another potential player in this game, but one that has so far been keeping quiet. The European Union, to which Northern Ireland still belongs, has a long and robust history of going to the mat with the Americans on behalf of Airbus, the EU-wide conglomerate which is Boeing’s only major rival in the worldwide market for passenger jets.
Boeing and Airbus
For decades, both America and the EU have accused each other of improperly subsidising their aerospace champions – Boeing itself benefits massively from US defence spending and research grants, as well as export guarantees. Yet today, all three of the biggest American airlines operate both Boeing and Airbus aircraft, as do most of their European counterparts. In order to operate in all global markets, the two rival manufacturers – too big to destroy each other – had to learn how to coexist.
Here we come to the most excruciating part of the present crisis; in a perfect farce of irony, incompetence and poetic justice, none of the parties most in need of the EU’s help are in a position to call for it.
The good news for Belfast and Ireland is that Brussels can interest itself in such matters without being asked
Canada, of course, is not an EU member. But the UK is, for the time being at least, and many thousands of UK/EU jobs are threatened by the American démarche. Yet for reasons that remain somewhat murky, Arlene Foster’s Democratic Unionist Party campaigned in favour of the Brexit referendum last year, against the wish of the majority in her region and in apparent opposition to Northern Ireland’s social and economic self-interest.
Meanwhile May, who has staked what little is left of her reputation on leading the UK out of both the EU and the single market, can hardly turn around now and ask Brussels to save all those lovely British jobs.
The principal trade union at Bombardier, Unite, is also badly compromised on Europe. As a leading sponsor of Labour leader Jeremy Corbyn, Unite general secretary Len McCluskey is an enthusiastic backer of Labour’s present Eurosceptic policy, including its refusal to campaign for the UK to remain under the protection of the single market. Tragically – or absurdly, if you prefer – none of these actors can invoke desperately needed European aid without losing what face they have left.
The good news for Belfast and Ireland is that Brussels can interest itself in such matters without being asked. Simon Tilford, chief economist at the Centre for European Reform, believes the EU will wait until the US Trade Commission rules on last week’s decision, probably early next year, before showing its hand: “But the EU will also have a choice. It could see this as an opportunity to step in and demonstrate to the British the benefits of being members of a big market and a strong trade policy, and to expose the Brexiteers and their inability to act. On the other hand, they might decide this is a good opportunity to hang the British out to dry and teach them a lesson, exposing how vulnerable Britain is going to be in a post-Brexit world.”
However they themselves voted on Brexit, the 4,200 workers in Bombardier Belfast, and many more in the wider community, will doubtless now be hoping that Brussels takes the former, more generous path.
Ed O’Loughlin is a journalist and author