09.55: Joy as Airbus deal finally goes ahead

The long awaited deal to sell off part of the Airbus factory at Filton to engineering giant GKN for £136 million was announced today and immediately hailed as vital for the future of the industry in the UK.

The British owned firm will take over the manufacturing operation at the site near Bristol which makes wing components for the aeroplane manufacturer and plans to invest another £125 in the plant over the next decade.

The Unite union hailed the deal as "fantastic news" and said it will help secure the region's aerospace industry for decades.

Airbus has been negotiating to sell Filton to GKN for months, and the two sides have been close to a deal for several weeks.

There was speculation that a deal has been delayed by haggling over the price and a commitment by Airbus to provide the factory with future work on its planned A350 aircraft.

The factory was put up for sale by Airbus's parent, EADS, as part of its Power 8 restructuring programme last year.

Business Secretary John Hutton is set to visit the factory later today when he will make an announcement of financial support from the Government.

GKN chief executive Sir Kevin Smith said: "The acquisition of the Filton wing components and assemblies manufacturing operation is a further exciting step in the development of GKN's aerospace business.

"The strategic logic is compelling. It brings a long-term partnership with Airbus and a strong order backlog which supports solid growth."

He added: "The position we have secured on the A350 XWB provides future growth at the leading edge of aerospace composites manufacturing technology.

"Filton is already a centre of excellence in metallic structures for Airbus and we intend to invest in the operation so that it also becomes a centre of excellence in composite wing structures serving the global aerospace market.

The Filton operation will cost £136 million, with an initial payment of £100 million on completion, with the balance of £36 million payable in annual instalments over the years 2010/15.

Unite national officer Bernie Hamilton said: "This is fantastic news for British manufacturing. This deal secures the UK aerospace industry for decades to come.

"GKN and the Government are making substantial investments into cutting edge composite technology, which will ensure that the UK retains its leading world-class position for designing, manufacturing and assembling wings for large aircraft.

"This announcement secures the UK's work-share for the manufacturing of wings for the new A350XWB and positions us at the forefront of the next generation of single aisle planes, the workhorses of the airline industry."

The Filton wing component and assemblies operation being acquired by GKN employs around 1,500 workers and has been developed by Airbus as a centre of excellence for wing structures.

It is a manufacturing and assembly specialist for wing components for the full range of Airbus aircraft including the A320 , A330/340, A380 and A400M.

GKN said it intended to invest £125 million over five years to further develop the Filton business as a global centre of excellence in composite wing structures as part of its participation on the new generation A350 XWB.

Ian Godden, chief executive of the Society of British Aerospace Companies, said: "We welcome the finalisation of this deal between two of the UK's leading aerospace companies. It is an encouraging example of the continuing progress of Airbus's Power8 programme as well as the commitment of GKN's aerospace business to the UK.

"Aerospace in the UK is a manufacturing success story and this deal will ensure that a site that plays a significant part in that success continues to do so.

"We look forward to working with both firms going forward as GKN further develop the wing component manufacturing and assembly unit at Filton while Airbus continues the A400M programme and their high-quality engineering work on the site."