Written evidence from Boeing (BRS0001)

Boeing is the world’s largest aerospace and defence business. The company is a growing business in the UK and a significant part of the national aerospace ecosystem. Since 2011, Boeing has doubled its direct UK employment and tripled its tier one supply chain spend. Boeing now employs 2,200 people and in 2016 it spent £2.1 billion with UK suppliers, supporting a further 16,500 UK jobs. In September of this year, Boeing broke ground on its first European manufacturing facility in Sheffield. The company has announced significant further investment plans including: support facilities for the RAF’s fleet of P-8A maritime patrol aircraft at RAF Lossiemouth; a new maintenance hangar at Gatwick Airport; an expansion of its Crawley flight training business, which will become Boeing’s largest training centre outside of the US; and the development of a defence “centre of excellence”, based on its fixed-wing business, at MOD Boscombe Down. Boeing is on course to further double its direct employment in the coming years and now undertakes engineering, maintenance, training, design, manufacturing, support and supply chain activity in the UK. At the Paris Airshow, Boeing’s Chairman, President and CEO, Dennis Muilenburg, reiterated our commitment to the UK regardless of the outcome of Brexit. Likewise the company is expanding elsewhere in the EU and this too will continue.

Boeing believes that the key fundamentals that make the UK an attractive aerospace economy will remain largely unchanged:

• The UK is likely to retain its position as one of the top defence nations in Europe with arguably the world’s most innovative Ministry of Defence in terms of the procurement of defence equipment and services.

• UK industry will continue to possess world-leading capabilities in a number of areas backed by a skills, academic and technology ecosystem that have developed over more than a century.

• UK airlines and the UK air transport system will continue to be globally significant in terms of scale, connectivity and innovation.

Over the past 40 years, the European aerospace sector has become increasingly integrated and interconnected. This has resulted in efficiencies and innovation that might otherwise not have been possible. The aerospace industry is growing rapidly across the globe; Boeing believes that the competitiveness of the UK and EU aerospace sectors is best served by the UK continuing to connect into the broader European aerospace community. We would suggest a number of key areas of focus:

1. Regulation. The development of a single European safety regulator, EASA, is good for industry and consumers. The UK makes a significant contribution to EASA’s work and UK businesses in turn rely upon EASA certification to operate. It is possible for non-EU members to retain EASA membership and we would encourage both the EU and UK to retain UK membership of EASA post 2019.

2. Movement of Goods. Aerospace, like other sectors, relies on just in time production methods. Airlines also rely on the ability to move parts to aircraft requiring servicing anywhere in Europe within a matter of hours. Given the integrated nature of European industry, any non-tariff barriers would be to the detriment of UK and EU businesses.

3. Market Access. Aviation enables broader economic and societal activity. Boeing supports the continuation and extension of liberalised markets for airlines to operate in.

4. Skilled labour and mobility. Aerospace and aviation are global industries and mobility of skilled people is crucial to that ongoing success.  Ensuring that the UK facilitates the movement of skilled workers into this country to perform vital and specialised tasks for business here and supports this movement around the world will help support the ongoing success of British industry in this sector.

Boeing notes the Committee’s question around transition periods and the Prime Minister’s recent speech in Florence. Boeing would observe that businesses are able to operate most effectively in an environment of certainty. The regulated nature of the aerospace industry means that Brexit contingency plans typically have a 12 month lead time associated with them. Boeing has observed some airlines already executing contingency options. Boeing would welcome clarity from the UK and the Commission on the future aerospace business environment in the first quarter of next year at the latest; the company feels that this is in the best interests of UK and EU businesses and consumers.

In summary, Boeing welcomes the attention the Committee is placing on the aerospace industry. Boeing believes that the UK and EU aerospace industries have a bright future ahead of them. The company would however note that the interests of both the UK and EU are best served by the UK remaining connected to the European aerospace ecosystem and that clarity on this would be welcome in the first quarter of 2018.

6 October 2017