Airbus boss warns UK risks losing European space role over Skynet contract

Airbus chief executive Guillaume Faury has warned Andy Burnham that awarding a £2.4bn military satellite contract to US rival Lockheed Martin could cost the UK a key role in the European space industry, in a late lobbying push over the deal.

Faury is understood to have written to the prime minister saying the choice of supplier for the Skynet system could affect the UK's strength in military satellites in Europe for decades. Airbus is headquartered in France, in Toulouse.

The Skynet 6 contract

The Skynet 6 satellites would carry the British armed forces' most sensitive communications until 2042, replacing the Skynet 5 system operated by Airbus. A decision had been expected in the summer but was delayed in part by Burnham's arrival in office. The final decision rests with Burnham and the chancellor, John Healey.

Several sources said they believed no final choice had been made, though some said they thought the Ministry of Defence preferred Lockheed Martin's bid. Politicians in north-east England have lobbied for that bid, which would include a new factory in Durham.

Luke Akehurst, the Labour MP for North Durham, said the Lockheed bid would mean a state-of-the-art manufacturing facility in the region and represented a major investment in the reindustrialisation of north-east England, building on its advanced manufacturing heritage. Kim McGuinness, the mayor for north-east England, said bringing satellite manufacturing there would be a "gamechanger" for the space and security sector, involving £100m of investment and 500 high-skilled jobs, with a wider supply chain impact.

Airbus warnings and the European tie-up

Senior industry figures have previously claimed that Airbus's UK satellite operations would not be viable without the next Skynet contract, meaning the company might close its sites at Stevenage and Portsmouth, which employ 3,000 people, including 600 working on Skynet. Faury is understood to have warned that if the British operation were no longer viable, the UK could miss the chance to be the European hub for military satellite communications once a planned merger was complete.

Airbus, Thales and Leonardo are working on a long-awaited merger of their space subsidiaries, known as Project Bromo, to build a single European champion with the scale to rival leading US companies.

Lockheed Martin, one of the largest US defence prime contractors, says its UK subsidiary will have full control over the satellites eventually built in the UK, and people close to the company strongly denied that the US government would control them. A spokesperson said the company could not comment on an ongoing procurement process, but said Lockheed Martin UK would set up facilities with regional partners in the north-east to provide a sovereign UK space capability, with a UK design authority and UK chief engineer, creating jobs, supply chain opportunities and the potential for exports.

Unite, one of Labour's biggest union backers, has warned against handing the British space industry to the Americans at a time of growing questions over whether the UK can rely on the US government. The decision follows complaints from Ukraine that its access to Elon Musk's Starlink network was restricted, apparently at the behest of the US government.

A government document for a related system said satellites had to contend with the proliferation of counterspace capabilities able to disrupt, deny, degrade or destroy space-based enablers, highlighting radio jamming, hacking and direct physical attacks. The first Skynet satellite was launched in 1969, well before the name was used for a hostile artificial intelligence in the 1984 film The Terminator.

Source: The Guardian.