The head of defence giant Leonardo has warned that the company could halt all future investment in the UK after prolonged delays over a major military helicopter contract, putting thousands of British jobs at risk.
In a private letter to Defence Secretary John Healey, Leonardo chief executive Roberto Cingolani said uncertainty surrounding the New Medium Helicopter programme is threatening the future of the company’s UK operations.
Helicopter contract delay sparks warning
Leonardo has been the sole remaining bidder for the £1bn New Medium Helicopter contract since summer 2024, after rival firms withdrew from the competition.
Despite being the only contender, the company is still awaiting a final decision from the Ministry of Defence nearly 18 months later.
Industry leaders say the continued delay is undermining confidence at a time when ministers have pledged to strengthen Britain’s defence capability in response to growing threats from Russia.
Yeovil site faces closure risk
In his letter, Cingolani described the helicopter contract as a cornerstone of Leonardo’s long-term UK strategy.
He warned that failure to secure the work would put the company’s helicopter manufacturing site in Yeovil, Somerset, at risk, potentially leading to its closure.
The Yeovil plant employs around 3,000 people directly and supports a further 9,000 jobs across the UK supply chain.
Leonardo has previously warned it cannot continue to subsidise the loss-making site indefinitely.
Wider UK investment under threat
Cingolani said the impact would extend beyond helicopters, with potential knock-on effects for Leonardo’s radar, electronics, cyber security and electronic warfare operations across the UK.
Leonardo operates additional facilities in Edinburgh, Newcastle, Lincoln, Luton, Bristol, Basildon, London and Southampton, all of which could see investment reviewed if the helicopter programme stalls.
The company declined to comment publicly on the letter.
Last UK helicopter factory
The Yeovil site is the UK’s last remaining facility capable of designing and manufacturing military helicopters end-to-end.
It has not received a government order for a new aircraft in almost 20 years, despite repeated warnings from industry and defence leaders about the strategic importance of maintaining sovereign helicopter manufacturing capability.
As part of its NMH bid, Leonardo has pledged to bring production of the AW101 and AW149 helicopters to Yeovil, creating a long-term pipeline of work and export orders.
Industry accuses government of paralysis
Make UK, the manufacturing industry body, warned ministers they are close to making a historic mistake.
Its chief executive Stephen Phipson said the UK is falling behind European partners who are actively modernising their helicopter fleets, while Britain delays replacing its ageing army aircraft.
Defence insiders say the delay reflects a deadlock between the Treasury and the Ministry of Defence, with the latter facing multibillion-pound budget pressures.
Uncertainty after defence review
The warning comes after ministers stepped back from a pledge to publish a long-awaited Defence Investment Plan before the end of the year.
Executives say the lack of clarity over future procurement plans is making it difficult for companies to commit investment and retain skilled workers.
This uncertainty persists despite the government’s Strategic Defence Review, which promised increased defence spending later this decade.
Ministers point to export success
Government officials insist defence remains central to economic growth, highlighting recent export wins for UK defence firms.
These include a £10bn deal to sell Type 26 frigates to Norway and a £550m agreement to supply Typhoon jets to Turkey.
However, industry figures argue that while exports are strong, domestic orders from the UK government remain scarce.
Concerns over international confidence
Norway is reportedly monitoring the situation closely as it considers buying British-built submarine-hunting helicopters to operate alongside its new frigates.
Analysts say uncertainty over the UK’s commitment to domestic helicopter production could weaken Britain’s credibility as a defence manufacturing partner.
MoD response
A Ministry of Defence spokesperson said the New Medium Helicopter programme is ongoing and that no final procurement decisions have yet been made.
They said the outcome would be confirmed in due course.
