Airbus Outgrows Its European Home

There’s pressure to shift work away from its base to win political favor in new markets.

- Carol Matlack, Benjamin Katz, and Ania Nussbaum

Since it was cobbled together from a passel of national aerospace groups a half-century ago, Airbus SE has spread its operations across Europe in a delicate effort aimed at maximizing political expediency without sacrificing too much economic efficiency. There’s little industrial logic, after all, in shuttling airplane parts among 14 factories in a half-dozen countries, with some wing components crossing the English Channel nine times before being mounted on planes. Yet it makes perfect sense if you want the backing of governments seeking jobs for their workers. Today, as Brexit looms, the quid pro quo is poised to become more complicated as the plane maker faces growing pressure from countries that buy the bulk of its planes to shift some manufacturing onto their shores. “Airbus will set up production capacity where it sees the potential for orders,” says Agnès Blazy, an industry analyst with CM-CIC Market Solutions in Paris.

The company’s airliner business employs more than 53,000 people across Europe. And of the 11,000 passenger jets Airbus has built since it was founded in 1970, all but 400 have come out of the region’s factories. Europe, however, accounts for fewer than 1 in 5 planes in Airbus’s order book, and China, the U.S., and other countries are clamoring for a bigger share of production reflecting the size of their markets—an idea Airbus has hinted it might accept. “Our first commitment is not to any particular nation,” Chief Executive Officer Tom Enders said at a January aerospace industry dinner in London. “It is first and foremost to the global competitiveness of the company and our industry.”