Lockheed Martin UK – Another Great Business Win

Confirmation yesterday (21/10/2014) of a £1bn design, manufacture, integration and test contract award placed by General Dynamics UK to Lockheed Martin UK covering 245 turrets for the SCOUT SV programme is more great news for the company and for UK jobs and skills. The turrets will built at LM’s Ampthill, Bedfordshire plant and the contract is expected to sustain around 880 jobs over the next few years together with many more employed through in small and medium sized companies that make up an interesting supply chain developed over many years.

Having only received the main contract award from the MOD at the beginning of September, GD UK has been quick to award one of the most important large components in the programme to LM UK. For GD UK the overall contract is based on delivery of 589 SCOUT Specialist Vehicle (SV) platforms for the British Army over the next ten years.

Delayed by defence cuts and indecision, the much needed SCOUT SV armoured vehicle capability development has been a long time in the making. The new vehicle is planned to replace ageing CVR Scimitar light tanks currently in service with the British Army. Scout SV will be delivered in six variants – Scout Reconnaissance, Protected Mobility Reconnaissance Support (PMRS), Command and Control, Engineering Reconnaissance, Repair and Recovery vehicles. Each SCOUT SV platform variant will be a highly-agile, tracked, medium-weight armoured fighting vehicle that will provide the Army with state-of-the-art best-in-class protection. Each of the different platform variants will have extensive capabilities including acoustic detectors, a laser warning system, a local situational awareness system, an electronic countermeasure system, a route marking system, an advanced electronic architecture and a high performance power pack.

With delivery to the British Army planned between 2017 and 2024 the total contract award is worth £3.5bn to GD UK and is the largest single MOD contract award placed for British Army vehicles for over 30 years. Its importance in terms of land based defence capability and the future role that it would play cannot be underestimated.

GD UK has stated that the contract will directly safeguard or create 1,300 jobs across the programme’s UK supply chain of which 300 will be at the company’s Oakdale factory in Gwent, South Wales although at this stage, it remains unclear whether final assembly is planned to take place in the UK or in Spain.

For LM UK this is another very large contract win for the company and follows in from large scale work such as Warrior upgrade and Merlin Capability Sustainment. LM UK is now very heavily invested in Britain and the skills that have been grown and developed here are hugely important in its ability to win deals. Scout SV turrets will all be built here in Britain, and while it is too early at this stage to predict whether the vehicle has export potential, the hope is that it will.

Coming off the back of the huge British Army Warrior Capability Sustainment Programme that had been placed with LM UK by the MOD back in October 2011, the award the SCOUT SV is further proof, if it were needed, that the company delivers on time and on budget. Meanwhile, work on the Warrior armoured fighting vehicle upgrade programme is proceeding apace with the next milestone expected to be live firing of the new turret system later this year. The company is also using its UK IPR to compete for export business in the Middle East and Europe, notably the Kuwaiti Desert Warrior upgrade programme together with an armoured vehicle procurement planned in Qatar.

Merlin and Warrior upgrade and the award of the Scout SV turret are excellent examples that underline the growing footprint that LM UK has established in what is now one if not the most important ‘home market’ that the Bethesda, Maryland based parent company has outside the US. The UK business continues to mature and grow not only in its home market but also in export markets too. The noticeable expansion of the company in recent years is a combination of business development and acquisition, but the bottom line is that it is also confirmation of what can be achieved when a company invests in people, product, and plant and supply chain.

This has been a good year for Lockheed Martin UK and I can see no reason why the average 15% rate of growth seen in recent years would not be sustainable in future years. Another interesting area of Lockheed Martin UK activities and development to highlight is that of cyber security. In addition, recent confirmation of a plan to establish a Space business in the UK together with the forthcoming launch of a new F-35 related facility at a location yet to be announced give further clues to where LM UK growth may come from. They are both also particularly interesting in that they demonstrate that all five of the global corporation’s businesses will soon have an active presence in the UK market. Worth noting too that the Glasgow-based information systems business that was acquired in September 2013 continues to go from strength to strength, particularly in areas of airport logistics and management plus air traffic management.

Back to Scout SV and the important turret award. Having spent years in the design process Scout SV will provide excellent capability unmatched by anything that the Army has had before. Not only is the vehicle an important addition to best-in-class protection, survivability, reliability and mobility but it is worth noting that the Reconnaissance variant will be the first all-weather intelligence, surveillance, target acquisition and reconnaissance (ISTAR) capability in service with the British Army.

The Ampthill plant that will build the turrets for the Scout SV is just one of a total 21 sites that LM UK has now established across the UK. Based in London LM UK now employs more than 3,000 people specialising in what it calls development, integration and sustainment of advanced technology based systems, products, concepts and services. Great product, great company.

CHW (London 22nd October 2014)

Howard Wheeldon FRAeS

hwheeldon@wheeldonstrategic.com

Tel: 077710 779785

Comments are closed.