Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The head of Spirit AeroSystems UK has warned the potential break-up of its Northern Ireland operations in the event of a sale would be “extremely detrimental” to their future and the region’s aerospace industry.
The fate of Spirit’s Belfast operations is unknown after Boeing said in March it was in talks to buy the troubled US aerospace supplier it spun off nearly 20 years ago.
Sir Michael Ryan, who chairs Spirit’s UK subsidiary, wrote to local stakeholders that “any dismantling of the business would be extremely detrimental to the long-term future of the Belfast business, and by extension, the region’s aerospace industry”.
“We firmly believe maintaining the Northern Ireland operations as a single entity is the best option in any proposed acquisition,” Ryan added in the letter, which was sent at the end of April, a copy of which has been seen by the Financial Times.
Boeing is under pressure to shift more of its production in-house after the fuselage section of one of its aircraft blew out in mid-air. Spirit supplies Boeing with the fuselages for its 737 Max aircraft and both manufacturers are undergoing an audit by America’s aviation safety regulator.
The talks have become complicated, however, as Spirit seeks to offload the work it does for Boeing’s European rival Airbus, notably at Belfast but also at a site in Scotland and in the US.
Guillaume Faury, Airbus chief executive, said last month the company was in early-stage talks with Spirit about the work it does for the plane maker.
“We would not want our important work packages to be procured from our main and almost sole competitor,” said Faury.
Spirit’s Belfast operations — which span six sites — build the wings and mid-fuselage sessions for the Airbus A220 aircraft programme. But they also manufacture fuselage sections and other critical components for a range of business jets built by Canada’s Bombardier.
The operations, which employ more than 3,000 people, are integral to the region’s thriving aerospace industry. The Belfast facilities, which are part of the historic Short Brothers factory, also do maintenance and repair work for other aviation customers.
Talks between Spirit and Airbus are progressing in the right direction, according to people familiar with the situation. Analysts have said the European group will be focused on ringfencing the work for the A220 at Belfast and securing the associated jobs.
However, in his letter, Ryan stated that while the separation of physical buildings was possible, the company’s structure and ecosystem is “integrally linked” and gave it “economies of scale, providing technological synergies, skills and flexibility”.
He warned that Northern Ireland’s ability to compete in a global environment would be put at risk if the operations were dismantled for the “optimisation of particular customers or other buyers”. By comparison, taking on the entire operation would be a “much less risky and complex exercise, particularly for an experienced and proficient strategic owner”.
Union representatives echoed his concerns. Alan Perry, a senior organiser at the GMB union, said the “main concern for GMB is that the Belfast sites remain as a single entity and they don’t get broken up”.
“Given the history of the site and the fact they employ nearly 3,000 employees any sale could have huge implications on the local economy.”
Spirit in Belfast declined to comment on the letter but said: “As commercial negotiations continue many options remain possible.”
A spokesperson for Northern Ireland’s economy ministry said: “The potential acquisition of Spirit AeroSystems is a commercial discussion between two companies. The economy minister is being kept informed of the ongoing discussions. It would not be appropriate to comment as these discussions continue.”
Airbus said it was “in early-stage discussions on a variety of options, including acquiring from Spirit AeroSystems some of the activities that they carry out for us”.
Bombardier said it would “not comment on Spirit’s activities” but added “we expect our supply contracts to be maintained to the highest standards of quality and performance in any outcome”.
Credit: Source link
