Our industries are clear that the UK’s continued membership of the EU is good for companies, their employees and the future prosperity of the country.
A detailed economic assessment by KPMG has shown that the UK’s membership of the EU delivers key benefits for the UK’s Aerospace, Defence, Security and Space sectors.
The KPMG analysis, supported by in-depth interviews with industry, assesses the benefits to these sectors’ global competitiveness in terms of access to EU markets and supply chains; to skilled workers, and to EU funding for investment in the UK.
Our sectors gain significant economic benefits from the UK’s membership of the EU. A report published by ADS and KPMG identified these benefits include:
- Easy access to EU markets: EU membership makes doing business with Toulouse and Turin as easy as with Norwich and Newcastle.
- Access to EU R&D funding: Every year, the EU funds almost £100m in UK R&D, supporting UK jobs, innovation and exports.
- UK influence over EU regulations: Whether we’re in or out, the UK will have to meet EU regulations to trade with the EU. Staying in means delivering better EU regulations to benefit UK businesses.
A survey of ADS Members by GfK published in April 2016 found that 70% believe it would be better for their business if the UK remained in the EU.
Opinion across all sizes of company and all four sectors – Aerospace, Defence, Security and Space – is overwhelmingly in favour of the UK remaining part of the EU:
- 69% of SMEs say better to remain
- 73% of larger companies say better to remain
Only 10% believe it would be better for their business if the UK left the EU – and 20% responded ‘don’t know / makes no difference’.
As the national trade association for the UK’s Aerospace, Defence, Security and Space sectors, ADS represents the views of businesses of all sizes in these wealth producing industries. Our sectors generate £56bn a year for the UK economy and support almost 800,000 jobs right across the country.
Read the facts about Industry and the EU Referendum in our FAQs.
Locations: 32 locations in the UK including Broughton, Filton, Stevenage and Portsmouth
UK Turnover: £6bn
UK Jobs: 15,000
Airbus Group comprises Airbus, Airbus Defence and Space and Airbus Helicopters. The wings for all Airbus commercial aircraft are designed, tested and assembled in the UK.
Airbus Group has a fully integrated, global supply chain and a significant pan-European footprint. Our operations are spread across the EU’s largest aerospace industries with development, manufacturing and assembly facilities in the UK, Germany, France and Spain.
The UK is one of the Group’s home nations and is key to many of our wider activities. The Company has four major manufacturing centres in the UK, including Broughton, where we make the wings for our commercial aircraft. We have also made significant investments at Filton where wings, undercarriage and fuel systems are designed and tested, and as a Group we invest around £500 million annually on UK based R&D. Our Defence and Space business’ Stevenage and Portsmouth sites are centres for satellite design and manufacture, and Airbus Helicopters is the UK’s civil helicopter hub.
As a successful integrated European company, Airbus must work as efficiently as possible across the borders of the countries we operate in, and anything that could impact our competitiveness is a major concern for the Group.
Paul Kahn, the President of Airbus Group UK, says:
“The success of Airbus Group’s operations in the UK depends on European industrial organisation and integration. If the UK exits the EU, there are likely to be significant changes to the regulatory and economic environment with subsequent impacts on our competitiveness. Though Airbus Group remains fully committed to its operations in the UK and to its employees here, we certainly hope the UK will choose to retain its EU membership which helps to ensure the continued long-term success of Airbus Group’s European industrial model.”
Locations: Sites across the UK including Redditch, Bristol, Birmingham, Cowes, Portsmouth, Telford and Luton
Turnover: £7.7bn (2015 full year results)
UK Jobs: 6,300
GKN is a 250 year old British owned engineering multinational. They are a leading manufacturer of complex, high performance components used in the aerospace and automotive industry. GKN employs more than 55,000 people in 33 countries across the globe.
GKN Aerospace is a division of GKN. In this division alone we employ more than five thousand people in the UK, manufacturing products such as metallic wing ribs, composite wing spars, components for engines, and cockpit and cabin windows, as well as hundreds of other products that can be found throughout an aircraft.
As a tier 1 supplier it is critical to both our customers and ourselves that we are not only geographically close, but also that our products can be delivered unimpeded by import controls and tariffs. We are proud to be a British company with a strong UK manufacturing base; but we are only able to support that base because the EU remains a world leader in the manufacture of civil aircraft. Last year for example, of the nearly £670m of sales made by our UK plants, over £450m ended up elsewhere in the EU either directly or indirectly.
Being part of the world’s largest single market has enabled GKN Aerospace to thrive and to support growth in the UK. Any disruption to the free movement of goods that is likely to result from leaving the EU will call into question future investment in the UK by the world’s leading plane and auto manufactures. Any let up in investment would be bad for Britain’s future economy.
Locations: Sites across the UK including Derby, Bristol, Barnoldswick, Inchinnan, Rotherham and Washington Tyne & Wear
Turnover: £13.4bn (2015 full year results)
UK Jobs: 24,000
Rolls-Royce is one of the world’s leading producers of aero engines for large civil aircraft and corporate jets. They are the second largest provider of defence aero engines and services in the world.
Rolls-Royce is a leader in the EU’s Clean Sky programme; a pan-European programme of some 600 participants to improve the performance and sustainability of aircraft.
The Advanced Low-Pressure System (ALPS) programme, which has received €45m of EU funding, has helped develop new technologies including the ALPS engine. The ALPS engine completed a series of ground and flight demonstrations to test the new Rolls-Royce composite fan blade made from carbon and titanium and associated composite engine casings. These new composite technologies, developed with support from Innovate UK, deliver a weight saving of over 680kg on a twin engine aircraft, and in turn a reduction in CO2 emissions.
This is just one technology that will help future Rolls-Royce engines deliver a 20% fuel efficiency improvement. This will be stretched to 25% with UltraFan™, which is also being funded by the EU as part of the Clean Sky 2 programme.
EU-funded research collaborations such as these make it possible for the UK aerospace sector to continue to grow in a more sustainable way. With innovative, tangible results such as ALPS, Clean Sky places Europe and the UK – a leading partner in many of its programmes – at the forefront of the greening of aviation.
SIGMA PRECISION COMPONENTS
Locations: Hinckley, Buckingham, Cheltenham, Farnborough, Nottingham, Swadlincote
UK Jobs: 360
Sigma Precision Components supplies a range of components including rigid pipes, ducts, fabrications, fasteners and composite parts to global aerospace markets.
Sigma is one of many UK manufacturers that has developed exciting new technology as a result of EU R&D funding. With the growing need for lightweight, greener, more fuel-efficient aircraft, Sigma developed new technologies to improve both weight and cost of a range of conventional engine and airframe components. This led to the creation of the Sigma Lite range, a portfolio of hi-tech products made possible through a series of ongoing R&D programmes.
The star of the Sigma Lite range is COMPipe, a composite aero-engine pipe that delivers weight savings of 50% over traditionally-manufactured pipes whilst still being able to withstand high operating temperatures and pressures. This innovation was made possible by funding from the EU’s Horizon 2020 through Clean Sky, a successful partnership between the European Commission and industry to improve the environmental and economic performance of aircraft.
Sigma have identified approximately 150 suitable applications for COMPipe, also leading to further spin-off technology development for other applications. Sigma’s COMPipe program will lead to significant economic and environmental benefits to the UK and global aerospace industry.
HYBRID AIR VEHICLES
Development expenditure: £6.4m
UK Jobs: 113
Hybrid Air Vehicles is the company behind the innovative Airlander range of hybrid aircraft. They utilise new aerospace technology that combines the best of the characteristics of fixed wing aircraft and helicopters with lighter-than-air technology to create a new breed of hyper-efficient aircraft, with a significantly lower carbon footprint and operating cost than other forms of air transport.
Hybrid Air Vehicles has been awarded €2.5m in funding from the EU’s research and innovation programme, Horizon 2020. The Airlander project was selected for funding through a dedicated SME Instrument of Horizon 2020, which the European Commission uses to invest in and support high growth and highly innovative small businesses.
Stephen McGlennan, Chief Executive of Hybrid Air Vehicles, says:
“Being in the EU has been and will continue to be vital for our business. Having access to significant R&D grants, such as the €2.5 million Horizon 2020 grant we’ve received, having access to a wider talent pool of engineers that are in short supply in the UK is critical to our expansion plans and even with regards to access to equity funding – we have a crowdfunding round open now – it is enormously helpful to easily raise this from anywhere in the EU.”
UK Jobs: 50
AVPE is a privately owned SME CNC machining business based in Bristol supplying directly into Airbus both in the UK and in Germany.
AVPE’s Tier1 supplier status with Airbus is based on the high service levels that AVPE gives both Airbus and other partners in the Airbus supply chain. AVPE has developed a very flexible manufacturing system to meet Airbus’s maintenance, repair and overhaul requirements in an Aircraft on Ground service scenario. Access to the EU barrier-free market has contributed to the success of this “fast shop” programme. Over the past five years AVPE revenues have grown four fold and productivity, as measured by revenue per employee, has doubled on the back of its Airbus relationship, creating high-value, high-skill jobs in the Bristol area.
AVPE plans to access European Clean Sky 2 funding to support the commercialisation of its Additive Layer (AL) manufacturing strategy in 2017/18, as this technology becomes certified by Airbus and other Aerospace Primes. Without access to Clean Sky 2 funding AVPE would not be able to justify the financial investment in an AL Cell and this supply chain capability would move elsewhere in Europe, which would put at risk AVPE’s existing relationship with Airbus in the medium term with the resultant risk to high skilled jobs in Bristol.
The growth in the commercial aerospace build programme over the next five years will create significant opportunities for companies like AVPE – any uncertainty arising from the UK’s membership of the EU will materially damage these opportunities.
Chris Steel, Chairman of AVPE, says: “Free access to the European market for trade and movement of skilled employees is crucial to AVPE being able to maintain its position as a Tier1 supplier in Airbus. Any uncertainty following a vote to leave the EU on the 23rd June will damage medium to long term employment prospects in AVPE.”
Location: Swaffham, Norfolk
UK Jobs: 40+
STG Aerospace is a UK based SME, developing innovative and cost effective aircraft cabin lighting solutions, with a global customer base ranging from Tier 1 for the largest OEMs to the smallest airlines in the aftermarket.
As a key technological innovator, STG Aerospace leads the field in photoluminescent aircraft cabin lighting and continues to push boundaries in other specialist aircraft lighting applications, including LED lighting, with a clear vision to be ‘innovators in light’.
Nigel Duncan, Chief Executive Officer of STG Aerospace, says:
“STG Aerospace has benefited from the EU and the formation of EASA (since its inception in 2004) within it as a single regulatory entity, providing STG Aerospace a level playing field across Europe. This unified European level organisation has improved our controls, guaranteed competitive equality with all of our EU colleagues and reduced our operating costs.
“As the years have passed, we have also seen additional benefits from this single European entity on a global scale, such as more international cooperation between the EU and overseas regulators. We are now moving into a phase of strong bilateral arrangements that will benefit all aerospace businesses within Europe. Utilising that unified stance and strong negotiating position SMEs like STG Aerospace are seeing the benefits. Would we get the same deal if we were negotiating alone? We don’t think so.
“In the aerospace industry, we do spend much of our time talking about risk and ways to mitigate those risks. A UK exit is clearly a risk to the Aerospace Community due to it being such an unknown and any supposed benefits of leaving cannot be quantified. Therefore, the obvious way to mitigate that risk is to stay in the EU and avoid it.”
Locations: Lancashire and Surrey
UK Jobs: 21
Valuechain.com has developed a digital ecosystem to improve the competitiveness of global aerospace and defence companies through productivity improvement solutions, multi-tier collaboration and supply chain intelligence.
As a UK SME Valuechain.com has been a successful applicant of EU R&D funding designed to help innovative businesses grow, which has enabled the company to fund the development of their software. The R&D funding has allowed their DISCO project (Data Integrated Supply Chain Optimisation) to focus on commercialising cloud-based technologies that will enable manufacturing businesses to improve their supply chain performance.
Valuechain.com has a combined client base of over 250 aerospace and defence SMEs. The funding for the DISCO project will enable Valuechain.com to integrate these companies and other European SMEs so that companies can access innovative productivity and collaboration applications to improve individual and supply chain competitiveness. Valuechain.com will also provide supply chain intelligence and collaboration solutions to European aerospace and defence organisations to streamline the delivery of regional, national and global supply chain development programmes.
The European Aviation Safety Agency (EASA) is the EU agency responsible for regulating and overseeing the safe operation of civil aviation across Europe. EASA’s duties include certifying aviation products for use, overseeing approved organisations, and developing regulations and requirements for technical and non-technical aspects of European aviation.
As an active EU member state and voting member of EASA’s Management Board, the UK has had a prominent role and significant input into the European Commission’s recent proposals to update and revise EASA’s ‘basic regulation’; the legislation which underpins its roles and responsibilities.
Working with industry, the UK has already helped shaped the initial proposals to ensure EASA is able to respond to future safety challenges, new technology and increased demand from industry. This influence includes leading on the agreed view that EASA should have a legal responsibility to engage with the European Chemicals Agency (ECHA) over the REACH regulation – ensuring the safety critical nature of materials used in the aviation sector are fully taken into consideration. The UK’s strong position and engagement on this issue and various others relating to EASA will be even more important as detailed negotiations continue over the next 12 months.
However, if the UK were to leave the EU, its prominent position and strong level of influence over the future development of EASA, as well as the day to day direction of European aviation safety standards, could be diminished. This could mean that UK companies across the Aerospace and aviation sectors may be in a position where they have to comply with European regulations, requirements and standards, but do not have the ability to significantly influence their development.