UK must remain at heart of Europe's aerospace industry, warns ADS - The Guardian

Britain's most powerful aerospace, defence and security companies have joined the debate over Europe in the wake of David Cameron's pledge to hold an in-out referendum on Britain's EU membership, by warning that the government must ensure close co-operation with its biggest trading partner.

The head of ADS, the trade association for major manufacturing names such as BAE Systems, Babcock and GKN, will state that British companies are "at the heart" of Europe's aerospace industry. The comments by Robin Southwell, the ADS chairman, will be given extra credence by his day-to-day role as the chief executive of UK operations at EADS, the Franco-German industrial conglomerate that owns Airbus, one of Britain's biggest manufacturing employers.

In a speech at the ADS annual dinner on Tuesday night, Southwell will say: "As we debate Britain's role in Europe in the years to come, what we should not question is our role at the heart of the European aerospace sector. After all, if you look at both exports and imports, the eurozone does more business with the UK than with any other trading bloc. How many of you know that the UK recently overtook France and the US to become Germany's single largest trading partner?"

He adds: "If that doesn't place us at the heart of Europe, then nothing does. So whatever the outcome for Britain's role in Europe, we must ensure that we remain part of the European economic community in protecting opportunities for investment, partnership and growth in our sector."

The failure last year of the €35bn (£30bn) merger between EADS and BAE Systems, Britain's biggest defence contractor, has stoked fears within government and industrial circles that work on the next generation of Airbus aircraft, as well as other big aerospace and defence projects, will drift away from the UK. Airbus employs about 10,000 people in the UK, largely at its wing manufacturing plant in Broughton, north Wales, and at its design and testing facility in Filton, near Bristol.

Ministers and aerospace industry executives are drawing up a new strategy document that is likely to include plans for an aerospace research centre, in addition to the centre of excellence for aerodynamics announced by George Osborne last year. The strategic update is being co-ordinated by the Aerospace Growth Partnership, a body that brings together government ministers, officials and UK-based aerospace companies including Rolls-Royce, the aircraft engine maker; Bombardier, which makes plane wings in Belfast; GKN, the components supplier; and AgustaWestland, the Yeovil-based helicopter maker.

British business leaders, including the CBI and the WPP boss, Sir Martin Sorrell, have warned that the prime minister's promise of an in-out referendum on the European Union in 2017 will create an atmosphere of uncertainty that could jeopardise investment plans. ADS represents the aerospace, defence, security and space industries in the UK, which are among the biggest employers in the British economy. Aerospace and defence companies alone employ about 400,000 people in the UK and generate about £60bn for the British economy, according to ADS.