Bombardier’s vulnerability is a bad omen for post-Brexit Britain
For some, Monday’s weather felt like a depiction of a postBrexit UK: a wind-battered, dystopian hellscape lit by an eerie red sun, leaving confused citizens feeling for all the world as though they were trapped in a faded sepia photograph. The last few weeks in Belfast offer a less hyperbolic indication of what might befall the UK after Brexit. The announcement that Bombardier’s CSeries jets would be subject to a 300% import tax in the US (up from the eye-watering 220% duty already imposed by America’s department of commerce), looked set to collapse a sizeable chunk of the Canadian company’s Belfast operations, costing 1,000 jobs in the city.
This put justified pressure on Theresa May to make use of the special relationship she sought to cultivate on her trip to Washington earlier this year, and show off the trade clout that the electorate has been told will result in the UK becoming a global trader outside the European customs union.
Last month the government told journalists that it was “quietly confident” the American aircraft manufacturer Boeing would lose its anti-trust case in the US against its Canadian rival, and that the high tariff would be dropped. The rationale was that despite Boeing’s complaints that Bombardier’s jets were unfairly subsidised and dumped in the American market at below cost, imposing such strict import taxes would unfairly strain trade relations between Canada and the US. Instead, Bombardier lost, leaving May hitting out at the US with no impact whatsoever and thousands of workers in Belfast in limbo.
The firm is crucial to the city’s economy, employing 4,000 workers, of whom a quarter build the wings of the single-aisle jet – the section of the Belfast operation threatened. A sudden loss of jobs with no similar manufacturer able to take on that number of employees would be a huge blow.
So the intervention of Boeing’s European rival, Airbus, appears to be a work of genius. Airbus has negotiated a majority 50.1% stake in Bombardier’s C-series jet programme without having to pay anything for it. In doing so, the 300% import duty can be neatly sidestepped because the final stage of the construction of jets destined for the US market will take place in Alabama, rather than Belfast. In doing so, Airbus will not be importing completed planes but parts, bringing sorely needed jobs to a Republican state – a move that is unlikely to annoy US politicians.
If Airbus’s legal advice is firm, and the deal passes muster with the US government, it will have snatched the much-delayed C-Series from the abyss and hopefully secured a thousand jobs.
But while the US and Boeing are clearly the Goliaths in this parable, May cannot cast herself as the bold and canny David. For all the Conservatives’ insistence that Britain and Northern Ireland will be “open for business”, it was clear that the prime minister had no clout with Trump and Congress – yielding not a deal but only stern and plaintive public pronouncements on the import tax being a travesty.
Instead, Airbus has succeeded in outsmarting the larger Boeing. So as we near the Brexit deadline, a panEuropean project has come to the rescue of UK jobs. Boeing’s hardline protectionism means it has stumbled into a trap, with its European rival able to snap up a huge chunk of Bombardier for free, hurting Boeing in the process.
The irony of Europeans coming to the rescue after British ineffectiveness will have stung May deeply. But Bombardier’s nightmare may still not be over: it is difficult to predict how exports will fare outside the customs union and single market, and how Europe, Canada and the UK will work together to keep the plant operational and solvent post-Brexit.
Leaving the EU could affect Northern Ireland-based companies more harshly than those in any other part of the UK. The most difficult question raised by Brexit in Northern Ireland – that is, what will happen to the Irish border – has still not been answered.
The Democratic Unionist party has unequivocally said that it will reject special status for the north, while Sinn Féin opposes any return to the hard border that preceded the Good Friday Agreement. Repeated questions put to the government – will it lead to a semi-militarised border? Will the border end up being the Irish Sea? – haven’t yet been answered.
On BBC’s Question Time from Belfast last week, former Northern Ireland secretary Theresa Villiers flippantly dismissed the border question, quipping that there had been a border for two decades with no problems, steadfastly ignoring the fact that the entirety of Ireland is within the European Union at present, but won’t be for long. On Tuesday the Home Office permanent secretary told the home affairs select committee he was “unable to rule out” using troops to police the border in the event of a “no deal” Brexit.
What has happened with Belfast and Bombardier reveals the dangers facing the UK after Brexit – leaping into the unknown with no safety net. May showed us at the general election that she’s a remarkably weak leader with a knack for making terrible decisions – and that is now more evident than ever. Airbus’s rescue is a Machiavellian work of business genius – hence Boeing’s outrage – but the Conservative government cannot claim credit for the rescue of Bombardier jobs.
Instead, we are left with a frightening vision of our bold Brexit future: Theresa May shouting into the wind.
• Dawn Foster is a Guardian columnist
While the US and Boeing are clearly the Goliaths in this parable, May cannot cast herself as the bold and canny David