Burnham urged to award £2.4bn military satellite contract to Airbus over US rival

Background

Unite, one of the Labour party's biggest union backers, has called on Andy Burnham to award a £2.4bn military satellite contract to Airbus rather than US rival Lockheed Martin, citing concerns that up to 600 jobs may be at risk. The bid battle is seen as an early test of Burnham's pledge to use "public procurement to back British industry" and one of the first major spending decisions for new defence secretary Wes Streeting, as the UK navigates relations with the Trump administration.

Contract Details

The Skynet 6 wideband satellite system (WSS) will consist of two geostationary satellites to carry the UK Ministry of Defence's most sensitive data. The MoD is reportedly pushing to make a decision as soon as 1 August.

Airbus Position

• Headquartered in France but designs and builds satellites in Stevenage, Hertfordshire and Portsmouth, Hampshire
• Airbus and its predecessor companies have built UK military satellites for decades, including the Skynet 5 system
• The first Skynet satellite was launched in 1969
• Union and MP pressure to opt for Airbus to preserve existing jobs
• Senior defence industry insiders warn awarding to Lockheed could make Airbus more likely to move satellite construction elsewhere and would be a fatal blow to efforts to export British technology
• The contract could also secure the facility during a planned merger of the space businesses of Airbus, France's Thales, and Italy's Leonardo
• Airbus declined to comment

Lockheed Martin Position

• Promises to create about 500 direct jobs in north-east England, including an assembly facility in Durham, plus another 1,500 jobs in the broader supply chain
• Potential for exports from the UK to other countries is thought to be a key part of its offer, as well as integration with the US military
• Has pledged to keep any intellectual property it develops in the UK
• Already invested in a research partnership with Northumbria University in Newcastle
• Makes parts for the F35 fighter jet in the UK
• Rod Drury, Lockheed Martin's vice-president for global business, stated: "All our initiatives in the UK are based around UK government contracts, with a UK company, delivered predominantly through UK-based staff, leveraging the best of US-based tech and capabilities. We are always looking to leverage the best of local industry and academia, as evidenced through our Northumbria University relationship, as evidenced through the significant number of supply chain agreements we have utilising UK companies."
• Declined to comment on the satellite competition

Statements

Sharon Graham, Unite general secretary: "Andy Burnham has said he is backing Britain and British jobs. The Skynet WSS contract could be the first test of this. These satellites have been designed and built in Britain for the last 20 years ensuring hundreds of skilled jobs in Stevenage and Portsmouth, as well as thousands more in the supply chain. Handing the British space industry over to the Americans in the first days of the new government would be a massive mistake, industrially and politically."

Kevin Bonavia, Labour MP for Stevenage: "This is a big opportunity for our new prime minister to back British manufacturing and sovereign capabilities, right off the bat. The defence investment plan is clear: we must back British industry. Design, manufacture and test of military satellites is one of the UK's crown jewels of defence capability. Thousands of highly skilled workers in Stevenage and Portsmouth already have the expertise that keeps the UK at the forefront of satellite technology."