The boss of Airbus has told Andy Burnham that choosing its US rival Lockheed Martin to manufacture military satellites could cost the UK a key role in the European space industry, intensifying a last-minute lobbying effort for the £2.4bn contract. It is understood that Guillaume Faury, the chief executive of France-headquartered Airbus, has written to the prime minister suggesting that the choice of provider of the Skynet system could have effects for decades to come on the UK’s strength in military satellites in Europe, in an effort to tip the contract away from its US rival. Yet politicians in north-east England have lobbied in favour of the Lockheed Martin bid, which would include a new factory in Durham.
The military satellites under the Skynet 6 contract will carry the British armed forces’ most sensitive communications up to 2042, replacing the Skynet 5 system operated by Airbus. The delayed decision on which company will manufacture the UK’s sovereign satellites comes at a sensitive moment, after Ukraine complained that its access to Elon Musk’s Starlink satellite network was restricted, apparently at the behest of the US government. Several sources said they believed no final decision on the contract had been made.
However, some said they believed that Lockheed Martin’s bid was preferred by the Ministry of Defence. The final decision will rest with Burnham and the chancellor, John Healey. It is thought that Faury’s letter warned of longer-term consequences for the UK’s role in the European space sector if Airbus were to lose out.
Senior industry figures have previously claimed that Airbus’s UK satellite operations would not be viable without the next Skynet contract, meaning the company might close its sites at Stevenage and Portsmouth, which employ 600 people. The manufacturers Airbus, Thales and Leonardo are working on a long-awaited merger between their space subsidiaries, known as Project Bromo, in an effort to build a single European champion with the scale to rival the leading US companies. Faury is understood to have warned that if its British operation were no longer viable it could mean the UK missing out on the chance to be the European hub for military satellite communications once the merger was complete.
Lockheed Martin is one of the US’s largest defence “prime” contractors, but it says its UK subsidiary will have full control over the satellites eventually built in the UK. People close to Lockheed Martin have strongly denied that the US government would have control over the satellites. A Lockheed Martin spokesperson said the company was “unable to comment on the ongoing procurement process”, but added: “Lockheed Martin UK, a British company, will establish facilities to develop an ecosystem alongside our regional partners in the north-east of England to provide the UK with a sovereign space capability.
It will create jobs, supply chain opportunities and the potential for exports. It will have a UK design authority and a UK chief engineer.” Luke Akehurst, the Labour MP for North Durham, said Lockheed’s bid would mean a “state-of-the-art new manufacturing facility” in the region. A decision had been expected in the summer but it has been delayed in part by the arrival of Burnham in office.
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