Cleared for take-off
Uproar as Minister ‘backing British industry’ is set to sign new multi-billion pound deal for US-made aircraft
DEFENCE Secretary Michael Fallon is set to run into further controversy over British jobs this week when he signs a key agreement to buy nine US-made Boeing P-8 Poseidon maritime patrol aircraft for $3.2 billion (£2.25 billion).
Fallon is already facing protests over an expected deal to buy 50 Apache helicopters, also made by Boeing, putting the future of 600 aeronautical jobs in the UK at risk.
Fallon visited the US naval base in Jacksonville, Florida, a few days ago where crew learn to handle the new aircraft. He is set to sign a ‘main gate’ agreement within days.
The P-8 will fill the gap left by the scrapping of the British-made Nimrod, which had been a stalwart of the UK’s early warning system since the 1970s. In 2010 the MoD decided to scrap a £4billion fleet of nine new Nimrods made by BAE Systems, in a move described as ‘vandalism’.
This week’s deal is the last step before a final agreement to acquire the aircraft is signed. This is expected to happen at the Farnborough air show in mid-July.
But Fallon faces a rough ride in the UK with the Unite union, which represents 70,000 defence workers, accusing him of failing to live up to the Government’s rhetoric of backing British industry.
Fallon is already under fire over an anticipated deal to acquire the 50 Apache helicopters at a knockdown price of £8.5million per helicopter from the US government. This could jeopardise jobs at rival helicopter maker AgustaWestland in Yeovil, Somerset, and elsewhere. Agusta, owned by Italian defence giant Leonardo-Finmeccanica, maintains the current Apache squadrons and is understood to have lobbied the Government to delay signing the contract until Ministers had considered its own proposals.
Unite raised concerns over the apparent lack of so-called ‘offset agreements’ in the proposed deal to buy the P-8s, which are a variant of the long-established 737 airliner.
The union’s assistant secretary general for manufacturing, Tony Burke, said: ‘The Government needs to ensure a substantial amount of production work is undertaken in the UK, with all the support work to maintain them in the years ahead. Apparently the P-8 will not be using UK weapons, which is a disgrace.’
At the moment barely 5 per cent of the P-8’s content by value is sourced in the UK. A rival proposal from Lockheed for a converted Hercules aircraft was said to involve a figure of 80 per cent, while Airbus reckoned it could offer 50 per cent. The P-8 was chosen without a competitive tendering process. But US defence industry sources suggest a sizeable portion of the $3.2billion total could come to the UK, with Boeing understood to be looking at British-sourced sonar sensors, for instance. A dozen Royal Air Force crew are already training at the multi-million pound facility at Jacksonville, which includes simulators for the aircraft.
Air crew undertake the bulk of their training in such simulators and defence sources suggest a similar, albeit smaller, facility could eventually be created in the UK. The facility could then also be used to train other nations’ crews, sources said.
The P-8 is designed to allow for considerable technical expansion and defence sources suggest this could allow for further British input in coming years. US sources suggest the UK might order more P-8s to replace lost capacity following the scrapping of the Nimrods.
The first three planes are expected to reach operational squadrons by 2020 but Fallon has spoken to the US government about providing a stopgap measure to cope with increased Russian naval activity. This could see US navy P-8s patrolling from the UK manned by British crews.
Some British manufacturers supply systems to the P-8, including Marshall’s of Cambridge, which supplies auxiliary fuel tanks; Martin Baker, which supplies seats; and a British subsidiary of GE, which supplies the weapon mounts.
The Ministry of Defence said: ‘The MoD has not yet committed to any specific figure for the P-8 Poseidon programme with the US Department of Defense under the Foreign Military Sales process, as it is still prior to its main gate approval and negotiations are ongoing.’