Bombardier

Tony Lloyd Excerpts

Tuesday 7th May 2019 Commons Chamber

[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.