Bombardier

Tuesday 7th May 2019 Commons Chamber

16:19

[Tony Lloyd (Rochdale) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the decision by Bombardier to sell its operations in Northern Ireland.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Stephenson)]

Last Thursday, Bombardier Inc. announced its plans to sell its Belfast aerostructures and engineering services operations. The Secretary of State for Business, Energy and Industrial Strategy has spoken to Alain Bellemare, Bombardier’s chief executive, and Michael Ryan, the head of its Belfast operations, about this decision.

The decision is a change of strategy for Bombardier, and we have asked the company to explain it. Bombardier has told us it is a strategic decision so that the company can focus on its transportation division, which includes trains and business jets. The company will be consolidating its aerospace assets into a single business unit with core operations in Canada, the USA and Mexico, while selling its Northern Ireland and Morocco units. Bombardier has said it will continue to be committed to rail transportation in the United Kingdom.

I recognise this is unwelcome news for the Northern Irish workforce across the company’s sites in Belfast, Dunmurry, Newtownards and Newtownabbey and for their families. It is deeply regrettable that they face further uncertainty about their future. We have been assured by Bombardier that it is committed to finding the right buyer and will not rush to sell at any price. Bombardier has said it will secure a buyer that will operate responsibly and will help the buyer to achieve its full growth potential.

The Belfast plant, its expertise and its highly skilled and dedicated staff will be highly sought after, and we will be working with potential buyers to take this successful and ambitious business forward. Bombardier has committed to no further job losses at the Short Brothers factory in Belfast and has paused the redundancy process from its November 2018 restructuring announcement. The management team will still continue to drive ongoing transformation initiatives to improve productivity and increase competitiveness.

The Short Brothers factory employs around 3,600 skilled workers, with a large number of them working on the A220 aircraft joint venture programme with Airbus. It also supports a supply chain of hundreds of companies and many more jobs in the UK. Bombardier’s commitment to the Short Brothers factory has transformed the business, changing it to a state-of-the-art wing factory with a healthy order book. The Belfast plant is a vital asset to the UK’s world-leading aerospace sector and is a centre of excellence in advanced composites and in the design and manufacture of some of the most high-value components in aerospace manufacturing.

We are committed to helping ensure that the Belfast facility continues to be successful. Last year, when the A220 aircraft joint venture was launched, both Bombardier and Airbus made a number of important commitments to the Business Secretary, including that wing manufacturing will continue in Belfast, that the treatment of UK sites and suppliers will be equal to that of other Bombardier and Airbus suppliers and that the strategy will be one of building on existing capabilities. I expect those commitments to be respected.

We will continue to work closely with the company, the unions and the Northern Ireland Departments while this process is under way.

[Tony Lloyd]

I welcome the Minister to the Front Bench. He is right to describe Bombardier as a company of vital importance. The workforce, of course, are both dedicated and highly skilled, but that of itself does not express the importance of Bombardier to the Northern Ireland economy. This is a world-class operation and an icon of Northern Ireland’s capacity to deliver world-class manufacturing and production. The company represents some 10% of Northern Ireland’s manufacturing output, and, as he says, it employs some 3,600 people across its different sites in Northern Ireland, but that only partially tells the story of a company with a supply chain that employs many, many more—some in Northern Ireland and some in other parts of the United Kingdom. Bombardier’s decision comes as a genuine shock and will lead to potential dismay. The Minister tells us that Bombardier has made commitments to try to maintain the site’s viability.

I would like to draw the House’s attention to comments made by the Moroccan Industry Minister, because Morocco is in the same position as Northern Ireland in this context. Moulay Hafid Elalamy has confirmed that Bombardier’s Casablanca factory operations will continue after Bombardier sells it plants. We look to the Minister to give the same kind of assurance to the people of Northern Ireland, the UK and beyond that Bombardier will make sure that the current workforce, skills base and production will continue unscathed.

In that context, the Minister has told us that conversations have taken place between the Secretary of State and Bombardier’s management. Will the Minister tell us whether there are plans to meet the representatives of the workforce—the trade unions involved? They are particularly keen—I agree with them on this—that the Secretary of State should hold a summit involving all the key partners, not simply the company and the workforce, but other stakeholders, including Members of this House and others elsewhere. It is important that a combined effort across Northern Ireland is made to ensure that we salvage what is proper from this announcement. Can the Minister, once again, establish that Bombardier will be sold as a total going concern? It matters enormously that we do not see a vulture company coming in, stripping its assets and its workforce and denuding both Northern Ireland and the UK of the Bombardier capacity.

Those with a good memory will recall that when Short Brothers, the predecessor company, was in public ownership, public money went into this site. What is the legacy of that public money? Can the Minister give assurances that Bombardier is committed to making sure that there is proper legacy for its workforce in Northern Ireland? Will consideration be given by his colleagues, probably those in the Treasury, as to whether enhanced funding should be provided for the Belfast city deal? Obviously, this announcement will create pressures on the Belfast city region and the people who live there.

The final point I wish to make to the Minister is a simple one. The Secretary of State for Northern Ireland cannot be with us today, for perfectly valid reasons—she is hosting five-party talks in Northern Ireland—but it is important that this Government do everything they can to see the Northern Ireland Executive back in operation. Were the Executive in place today, this would make both the Minister’s task and the future of Bombardier much less complicated.

[Andrew Stephenson]

I thank the shadow Secretary of State for the tone of his remarks, and I agree with him completely on the importance of Bombardier. Indeed, I would go as far as to say that it is a jewel in the crown of not only Northern Irish manufacturing, but the whole UK aerospace sector. It is therefore vital that we all work together to do everything we can to ensure the future of this site and its workforce.

The hon. Gentleman posed a range of questions that I wish to touch on. I am more than happy to meet the unions and workers’ representatives to talk about this issue, and to visit Northern Ireland to see what we can do. It is important that we find the right buyer for this company, which has a good order book and is profitable. Like other companies in the aerospace sector, it has huge growth potential in the coming years. I will not rehearse the statistics now, but they show huge growth potential in the aerospace sector, and Bombardier is well positioned to capitalise on it.

The Government continue to work to support the wider Northern Irish economy. A heads of terms agreement for the Belfast city deal was agreed by the UK Government, Northern Irish government and Belfast regional partners in March 2019. The Belfast region city deal will see the UK Government invest £350 million into the Belfast region over the next 15 years. In addition, work is ongoing between the UK Government and local partners on a funding announcement for a Londonderry/Derry regional city deal. As has been said, the Secretary of State for Northern Ireland is not here—obviously, she is doing good work in Northern Ireland at the moment—but I stand ready to work with her and other Ministers to ensure that all necessary support is given to the workers at this site going forward.

[Mark Pawsey (Rugby) (Con)]

The Business, Energy and Industrial Strategy Committee paid a visit to the Belfast plant of Bombardier last November during which we saw a highly skilled workforce carrying out fantastic work in the manufacture of aircraft wings with a high level of expertise. We also saw the benefits of the £2.7 billion investment that has been made in the plant since 1989. Does the Minister agree that it is important to reassure not only customers of Bombardier, which provides for the families of aircraft that Bombardier itself produces, but external customers such as Airbus with its A220 programme?

[Andrew Stephenson]

I agree that this site is very much a going concern. Bombardier has made it clear that it will look for the right buyer for this site. It does not intend to close it. As part of a strategic overview of its business, it has decided that this site, along with the Morocco site, should go up for sale. The Government have worked consistently with the site, and, since 2017, more than £20 million has been invested in research and development activity at the Belfast plant to develop new products and to improve efficiency.

[Carol Monaghan (Glasgow North West) (SNP)]

I had the privilege of visiting Bombardier last year as part of an Industry and Parliament Trust delegation. I was blown away both by the scale of the plant and by the highly specialised processes that were being undertaken there. Three thousand six hundred jobs is a massive figure. To put that in context, that represents 4.5% of the entire workforce in Northern Ireland, and when we take into account the supply chain, the figure becomes even greater.

According to Bombardier, Brexit is not a factor in the decision to sell the business, but when we were there on that visit, concerns were raised about Brexit and the impact of the removal of the UK from the single market and customs union. Whether or not Brexit had a role to play in this decision, the current situation will affect the search for a new owner. Airbus wings are built by Bombardier, and Tom Enders, the chief executive of Airbus, has said that the UK’s aerospace sector now stands at the precipice and that Brexit uncertainty is a disgrace. Is the Minister listening to the message from the site’s key customer and is he doing everything in his power to ensure that the UK does remain within the single market and customs union? Is he aware of any firm willing to purchase the site?

Finally, what steps is he taking to protect this highly skilled workforce, and how will he ensure that these skilled workers remain in Northern Ireland?

[Andrew Stephenson]

I have been assured that Bombardier is committed to finding the right buyer for the site. It has said that it will find one that will operate responsibly and help the company to achieve its full growth potential. The Belfast plant, its expertise and highly skilled and dedicated staff will be highly sought after and the Government will work with potential buyers to take this successful and ambitious business forward. Bombardier is a global business that operates in 28 sites across the world and it has made it clear that Brexit was not a factor in this decision.

[Mr Philip Hollobone (Kettering) (Con)]

Given the world-class technical skills of the Northern Ireland workforce, is the Minister optimistic that the right buyer can be found? Given the continued railway expansion in this country and the need for more rolling stock, does he welcome Bombardier’s continued commitment to the railway sector?

[Andrew Stephenson]

I thank my hon. Friend for his question. This will be a highly sought after company, and I imagine that there will be a range of people interested in buying the site. Bombardier has made it very clear that, in terms of its other divisions in the UK, particularly in rolling stock, it intends to stay firmly involved in the provision of new rolling stock, and I look forward to visiting Bombardier’s facility on Thursday.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I am co-chair of the all-party manufacturing group and very heavily involved in air safety. Is not the news today about Bombardier a disaster for British industry and British aerospace? This is a prime globally known company and a prime contractor of Airbus, and the news today is a sign of what is happening in high-tech industries and the car industry: they are moving out of Britain and taking out their investment. This is a disaster. Every Minister should be aware that this is not a canary singing, but a canary falling off its perch.

[Andrew Stephenson]

Like other companies in the growing aerospace sector, Bombardier is transforming itself. In 2015—way before Brexit—the company announced a five-year plan to transform the business to reduce costs and to improve profitability and competitiveness, while also launching commercial and business jet programmes. Bombardier has been very clear that the decision to sell off the Northern Irish site and the Morocco site—definitely nothing to do with Brexit—has nothing to do with Brexit.

[Jeremy Lefroy (Stafford) (Con)]

Does my hon. Friend agree that this is an opportunity for UK-owned and UK-based companies to re-enter the major civilian aerospace sector, and that this is not just an opportunity to see it sold to some foreign-based buyer? It is our second biggest manufacturing sector after the automotive sector, and we now have the opportunity to see it come back into British hands.

[Andrew Stephenson]

My hon. Friend makes an excellent point. This is a golden opportunity for a number of businesses in the sector and for businesses that want to expand into the sector. It is a growing, profitable business that would make a sensible investment for anyone.

[Gavin Robinson (Belfast East) (DUP)]

I thank the hon. Member for Rochdale (Tony Lloyd) for raising this question and pay tribute to Members across the House who have shown support over the last number of years for Bombardier in my constituency and the constituencies of the hon. Member for Watford (Richard Harrington) and the right hon. Member for Broxtowe (Anna Soubry); I particularly thank them for their commitment over many years.

I also thank the Minister for taking an interest in this case. I was very grateful to the Secretary of State for his phone call on Thursday and recognise the commitment that he has shown to this key part of our industry in Northern Ireland—and, indeed, to the UK aviation sector—over the last period.

The Minister knows the importance of Bombardier and its significance to our economy. Can he therefore assure us that he will maintain the jobs in Belfast and surrounding areas, the industry, the innovation and the skill that we are benefiting from and that the whole world will?

[Andrew Stephenson]

I thank the hon. Gentleman for his point. He is a huge champion for his constituents and all the workers at the site. My constituency of Pendle is dominated by the aerospace sector and is home to a large Rolls-Royce fan blade factory, so I know the importance of these highly skilled and well-paid aerospace jobs. I will do everything I can, working with the hon. Gentleman and his hon. Friends, to ensure that we secure all the jobs at the Bombardier Belfast site.

[Joseph Johnson (Orpington) (Con)]

Will my hon. Friend join me in welcoming the substantial investment that Bombardier has recently made in Biggin Hill, where its new business aircraft service centre is creating many opportunities for young people in the London Borough of Bromley?

[Andrew Stephenson]

My hon. Friend is correct to point out that Bombardier is a growing company that is investing in different sectors; it is just strategically realigning itself. I look forward to visiting a different Bombardier site on Thursday—not the one my hon. Friend mentioned—to talk about other investments within the UK. The decision to sell its operations in Northern Ireland is regrettable, but we will work with the company to ensure that the right buyer is found.

[Mr Jim Cunningham (Coventry South) (Lab)]

Members will recall that the American Government took legal action against Bombardier about 18 months ago, so how big a part did the United States play in this decision? The hon. Member for Glasgow North West (Carol Monaghan) said that this affects 4.5% of the workforce in Northern Ireland, but we can multiply that figure by two or three if we include the supply chain as well, so the problem is much bigger than people realise. We had a similar statement on GKN a couple of weeks ago; is the Minister being conned on this?

[Andrew Stephenson]

Bombardier has told us that this is a strategic decision so that the company can focus on its transportation division, which includes trains and business jets. We have been told that it has not been influenced by any other factors. This is a strategic decision by the company so that it can focus on certain key parts of its core operation.

[Toby Perkins (Chesterfield) (Lab)]

The Minister described the strategic realignment that Bombardier has spoken about, but he has also no doubt spoken to ADS—on behalf of the aerospace industry—and heard about the huge concern that exists in aerospace manufacturing about the fact that the Government are unable to come up with a permanent customs arrangement or even to get a deal through this Parliament. Given all the discussions he has had, what impact will the Government’s current Brexit position have on the likelihood of these Bombardier jobs being secured and a new buyer found?

[Andrew Stephenson]

The large aerospace businesses I have talked to—including Rolls-Royce, which has a plant in my constituency—have been very clear that MPs should vote for the deal, and I am proud that I voted for it three times.

[Tom Brake (Carshalton and Wallington) (LD)]

I accept that there is not very much the Government can do, but will the Minister set out what it might be possible to do in identifying or facilitating the identification of any new buyer? On retraining, although hopefully that will not be necessary, what sort of package might the Government be willing to put in place if it does prove necessary in future?

[Andrew Stephenson]

At the current time, we are going to be focused on finding the right buyer. We will work across government to ensure that the right buyer is found. If there are already existing purchasers involved, that is commercially sensitive and something for the company.

I very much hope that we never have to look at any sort of retraining package for the site. Obviously, if we did I would come back to the House on it. However, this is a growing, profitable business—one of the jewels in the crown of UK aerospace—and I would imagine that buyers for this site are lining up to invest in the jobs and skills in Northern Ireland.

[Anna Soubry (Broxtowe) (Change UK)]

One of the finest visits I had the honour of making when I was a business Minister was to this remarkable factory in Belfast. I went with the hon. Member for Belfast East (Gavin Robinson). They are indeed a highly skilled workforce making a world-class product. It was remarkable to see those wings being made. Does the Minister not agree, though, that British aerospace has basically been built on the fact that we are a member of the European Union, that any potential buyer will surely not be attracted even to the brilliant workforce with this outstanding product when we leave—if we leave—the European Union, and that the truth and reality is now dawning on many people that the best deal with the European Union is the deal that we currently have?

[Andrew Stephenson]

No, I would respectfully disagree. I think we need to provide certainty for all sectors of our economy. We have seen a range of recent investments in the aerospace sector across the United Kingdom, but we have also seen businesses restructure, as in this business with huge growth potential, as the sector looks to realign itself for the growth potentials in future.

[Jim Shannon (Strangford) (DUP)]

rose—

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Mr Speaker]

What a difficult choice—Strangford against East Antrim. I call Jim Shannon.

[Jim Shannon]

Thank you, Mr Speaker.

I thank the Minister for his reply to these questions. I represent Strangford, as Mr Speaker said and others here will know as well. The factory in Newtownards is part of the Bombardier business, and I want to speak on its behalf. Last year, I had an opportunity to visit the Belfast site in the constituency of my hon. Friend the Member for Belfast East (Gavin Robinson), and to understand its importance and the experience of its skilled workforce. It seems that there are three companies interested in Bombardier. Has the Minister had time to discuss the possibility of a partnership with Airbus, with Airbus owning 50.1% of the shares, thereby cementing the wing technology in the United Kingdom, and 49.9% owned by Bombardier, with voting shares retained by Bombardier? That is very similar to the partnership in the Airbus C Series, now the Airbus A320.

[Mr Speaker]

I do hope that the hon. Gentleman now feels that he has fully ventilated his concerns, at least for now.

[Andrew Stephenson]

Any discussions that are ongoing between Bombardier and potential buyers are of course commercially sensitive. However, one would imagine that a company like Airbus, which is so reliant on this excellent company providing so many components to it, would be taking an active interest in the company and how it goes forward.

[Sammy Wilson]

I bet you wish you had chosen me the first time, Mr Speaker.

The people of Northern Ireland appreciate the political and financial commitments that Governments of all shades in this House have given over the years to keeping aircraft manufacturing alive in Northern Ireland. Bombardier’s lease was due to be renewed this year. When it was privatised, a peppercorn rent was made available for the site—it is a very land-intensive industry—which is a fraction of a per cent. of what the commercial rent would be. That could be a deal breaker when it comes to the sale of the site. What discussions has the Minister had, or will he have, with the Belfast Harbour Commissioners about setting a level of rent that ensures that operations can continue on the site?

[Mr Speaker]

The right hon. Gentleman was not to be outdone by his hon. Friend.

[Andrew Stephenson]

I thank the right hon. Gentleman for his question. Three weeks into the job, I have not had any conversations with them yet, but I look forward to doing so because, as he says, that could be very worthwhile as we look to secure the future of this company and all those whose livelihoods depend on it.