The Right Hon Michael Fallon MP,
Secretary of State for Defence
Ministry of Defence,
Wednesday, 12 October 2016
I had hoped to see you to discuss the situation with Leonardo and GKN in Yeovil and its impact on Britain’s Aerospace industry. I understand that you cannot find time in your programme for an urgent meeting but have arranged a meeting tomorrow with the Minister for Defence Procurement Harriett Baldwin MP.
I am writing this letter to lay out the issues before that meeting.
I am extremely concerned that Britain’s stand alone capacity to manufacture helicopters, which has been for so long a vital part of our Aero-space industry, is in serious jeopardy, as a result of the events leading up to the recent Leonardo decision to ship back to Italy, all AW159 “Wild Cat” structure work, currently being carried out at GKN Yeovil.
It may be helpful if I briefly rehearse how we got here.
You will recall that, during the Coalition Government, the MoD wished to purchase some Apache helicopters for the Army. You, as Minister for Business and Enterprise agreed in 2014 that Westland should bid for this order on a commercial basis. Westland, were confident that they could easily compete with Boeing on price (you will be aware that their unit labour costs are significantly lower than those Boeing). But then, out of the blue MoD unilaterally insisted on (some say “engineered”) a new requirement which they knew could only be supplied by Boeing. This effectively ruled Westland out of the bidding, which MoD must have known when they insisted on this new requirement (the so-called wash-wipe system - which even the US Army does not have).
Vince Cable MP, as Minster for Business and Innovation and David Laws (the then MP for Yeovil), warned that the knock on consequence of this could be seriously to endanger the capacity for stand-alone helicopter production and assembly at Yeovil, the only British integrated site capable of doing this. They proposed that the order should not be awarded to the US until there was a full tendering process. The then Chief Secretary for the Treasury, Danny Alexander MP agreed and insisted that competitive tendering should take place before the order was awarded. You were at the time Minister for Business and Enterprise and, I understand, strongly supported this course of action. You made it clear at the time “that defence procurement should be seen as linked to industrial strategy” and not driven solely by the dictates of the MoD’s civil servants.
Despite all this the new Conservative Government, once elected, placed the order with Boeing – without further ado and without any tendering process. I am not sure what local political lobbying the Government received opposing this decision at the time. But if they did receive any, they clearly ignored it.
The Government’s decision to buy from Boeing instead of a potentially cheaper UK option was a bizarre and short sighted decision, even by the standards of the time.
But in the present post-Brexit climate it is even more inexplicable. We should surely now be doing all we can to boost exports? The message that was sent to the world when the Government insists that a competitive U.K. Company, who was a successful Prime Contractor on the Apache for many years including during wars, had been deselected as MoD's Prime Contractor, was devastating.
Many of us warned at the time that the current owners of the “Westland” site, Leonardo, an Italian firm would conclude that the UK Government was not committed to helicopter production in the UK and act accordingly.
This, I regret to say, is exactly what has now happened. In the absence of a clear commitment, spoken or tacit, from the UK Government to continued helicopter production in the UK, Leonardo has now, I am told, been under heavy pressure from the Government and political circles in Italy to move, all “Wild Cat” structure work back home.
The consequences of this decision, not just for the Yeovil site, but also for an essential part of Britain’s aero-space industry - and for our national capacity to create, build and assemble our own helicopters - are, I believe, very serious.
The Prime Minister has announced that she wishes to see a national industrial strategy. This is very welcome news. But now we have to make her words a reality. If the Government will not now act to make it clear that they regard the maintenance of a stand lone, helicopter design, manufacture and assembly capacity as a vital part of our national high tech and aerospace industrial base, then I fear many will conclude that the Prime Minister’s claim to have an industrial “Industrial Strategy” will seem no more than hollow words.
What we are facing here is much more than job-losses at Yeovil. The GKN workers are highly skilled and we are an enterprising community. With energetic work from the local Council and others we will be doing our best to ensure that those who have lost their jobs find new ones, preferably in Yeovil the area.
What is at risk here is, however much more than damage to the Yeovil and south Somerset community.
Without a clear Government statement that it is committed to maintaining a stand-alone UK capacity for helicopter design and production, I fear we may be placing in jeopardy a vital part of our national industrial and technological base, along with the ability to procure for our armed forces the vital equipment they need on the battlefield, from British sources.
They Yeovil “Westland” site and its workforce have loyally served the nation’s defence interests for more than a 100 years. Its aircraft and equipment have been used by our armed forces in every conflict we have fought in the last century (as I recall myself in the little conflicts in which I was involved in Aden and Borneo and in my service in Northern Ireland). We look to the Government now for a clear statement that it understands the importance of that contribution and will do whatever is necessary to support and preserve the nation’s helicopter industry.
I hope to receive assurances from you on this in the very near future.