The boss of one of the world’s biggest defence firms says the future of its Somerset helicopter factory is under threat if it does not secure a contract from the Ministry of Defence worth £1bn.
Roberto Cingolani, chief executive of Leonardo, told investors on a call last week the Italian-headquartered business could not “subsidise Yeovil forever”.
Last year, Leonardo’s AW149 super-medium-twin helicopter emerged as the remaining contender to replace Pumas, which have been used by the Royal Air Force for decades.
The company submitted a best and final offer in April, but is still waiting on a decision from the MoD. It is understood if the defence giant secures the contract the helicopters will be built in Yeovil.
Leonardo’s site in the West Country has been an aerospace hub for more than 100 years and employs thousands of people directly and in the supply chain.
The facility is the only place in Britain that still carries out the end-to-end design, development and manufacturing of helicopters.
Mr Cingolani said he recently visited the Ƶ and spoke to defence secretary John Healey about the need for more government support for the Yeovil site.
It is understood the pair are planning to meet in Naples later this month to continue negotiations.
“We are trying to boost collaboration with the Ƶ government,” said Mr Cingolani.
“We have a plant in Yeovil that is not getting industrial grants, or government grants, for 14 years. In order for this plant to stay subsidised by [Leonardo], we need to have more participation [from the Ƶ government] so we are negotiating… and I have faith there.”
Leonardo says it expects a decision to be made by the MoD on the contract before the end of the year.
“I think we can be positive but we have to see what happens in the end,” said Mr Cingolani. “These tenders are very complicated [and] there is lots of political influence behind them.”
A decision to withdraw from the historic Somerset site would have major implications for the local economy.
More than 3,100 staff are based on site, including contractors and 150 trainee graduates and apprentices, who work across departments including research and innovation, air traffic control and flight safety.
Although the site makes helicopters for civil use, such as search and rescue, the MoD is the company’s most important customer.
The MoD said in a statement that only Leonardo Ƶ was tendering for the helicopter competition and that it was “continuing with the established procurement process”.
“The MoD is working at pace to deliver equipment for our armed forces, back Ƶ companies and create jobs across the country”, it said.
A decision in principle is expected before the end of the year, it added.
