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Airbus hits the jackpot

News has broken that Airbus in Broughton has been awarded a £28 million grant from the Welsh Assembly Government to ensure the future of hi-tech wing production in Flintshire and to create a new centre to develop composite wing production.

Some will question why the Welsh Assembly Government is putting £28 million from its funds into one large business and which amounts to over 10 per cent of the entire business support package for Welsh business? Won't other large firms, such as Anglesey Aluminium and Corus now start asking for similar amounts to secure future jobs at their plants, thusreducing the funds available to Welsh business?

Others will ask why the Assembly Government had to pay for this and why Lord Mandelson didn't come up with the additional money from his new super department to support what is essentially a UK operation (especially when Broughton employs thousands of people from outside of Wales).

Finally, the more cynical will say that Airbus has played the Assembly Government perfectly and squeezed a massive grant from them by suggesting, at a time of recession, that the leading UK manufacturing plant which coincidentally is based in Wales, will shed hundreds of jobs.

While all of these arguments have merit, we mustn't forget that Airbus is the real jewel in the Welsh economy and if the investment secures the future of this plant for the next decade, then it is worth every penny. For once, the Assembly Government has done the right thing as I cannot even begin to contemplate what the alternative would have been to Airbus closing down.

However, I just hope that Rhodri, in giving such a large amount to Airbus, has ensured that some of this money will go to building up capacity within Welsh universities in the area of composite materials and that Airbus will have to support similar development within its supply chain of Welsh companies.

Comments

Anonymous said…
Air bus gets its composites from AIG in the Midlands
June 19, 2009 9:19 am
MH said…
I think the essence of the difference is that this money isn't just being put in to support the existing business in a time of recession, but to develop a new area of expertise in composites.

Therefore the other companies you mention (and others that you didn't) should not expect similar grants simply to keep their existing production technology going ... but if they were looking to develop in new ways, they probably could.

I don't think Corus and Anglesey Aluminium are looking at any radically different technologies. But I guess there might be a few dozen smaller firms that could claim they are trying to develop new cutting-edge technologies or manufacturing methods, and I hope there are adequate mechanisms in place for these to be able to present their cases to the Welsh government.
June 19, 2009 1:28 pm
Anonymous said…
you make a good point about WAG being held over a barrel in terms of the job losses threat from Airbus, this type of story further highlights the over reliance on big international employers and a very large public sector in Wales neither of which have been immune from the recession as some senior welsh politicians said they would be.

The need for a substantial home grown private sector in Wales that's so often talked about has never seemed so relevant or more needed, are WAG and the Civil Servants up to the job of delivering it, I doubt it.
June 19, 2009 4:41 pm
Anonymous said…
It's a lot of money to come out of the WAG budget only three months in. How will this affect the amount of money available to small firms in Wales?
June 19, 2009 6:00 pm
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