By Sankha Ganguli, Aerospace MBA Delegates (LongHaul)
On Friday, 25th January we had the opportunity to listen to a very lively talk hosted by Mark Walker, Head of Procurement Strategy & Governance at Airbus on “The perils of Brexit for European Company and how to overcome them”.
Mr. Walker started off by reminding us of some key dates in Britain’s march to Brexit and what’s at stake for Airbus in this tug of war. He highlighted the fact that this uncertainty has been in place for quite some time now but it’s only until recently that people have woken up to its perils. With only about two months left for the proverbial “Cliff Edge” scenario, he stressed on seeing the big picture and how a “No deal” Brexit is going to affect not only Airbus and its principal suppliers but all parties doing business across the Channel.
Mark informed us about the special cell that has been created inside Airbus to deal with the situation and how this team is working round the clock in crisis planning and finding ways and means to make life easier, as far as possible, for the innumerable suppliers. He elaborated on the specific requirements from the EASA & Customs Department and the preparation of a robust IT and data collection system within Airbus, on which the suppliers can count on in these desperate times. Moreover, he laid down the importance of building buffer stock and why he thinks the smooth carriage of various small parts, rather than the bigger and more complex ones, hold the key for Airbus in managing Brexit efficiently. He concluded his speech by advising all the stakeholders to be creative, vigilant and agile.
The key challenge to facing Brexit is that it has no precedence and while it will be a giant leap of faith to the unknown for the British, Mr Mark Walker cautioned all to take a close hard look at the surroundings before the decision to take that leap is made, simply because the collateral damage can be immense in case of any slippage.
By Haibo Hu, Aerospace MBA Delegates (Hub)
Mark reiterated the uncertainty of Brexit still to be addressed and called for actions from different players urgently to avoid chaos. He described the matter as “Brexit brings up new problems or confusing scenarios each morning when people wake up”. It turns out that Brexit is much more complicated than what people have been believing in.
He said in Airbus, Brexit concerns not only commercial aircraft, but also the Defense and Space, as well as the Helicopter businesses. Specifically for procurement activities, Airbus is preparing its suppliers for Brexit by putting in place a mitigation plan after supporting them for self-assessment and risk identifying. Mark saw the main risks for Airbus of a no-deal Brexit lying on long delivery process due to increased export administration, delayed deliveries and increased supplier costs. A Buffer Stock has been created to address the no-deal scenario which will be burnt along 2019 meaning at 0 level in the year end.
Airbus strongly opposes a no-deal Brexit but has to prepare itself for the worst possibility, according to Mark. He asked everybody in the conference to be realistic and be prepared for that.