Burnham urged to award £2.4bn military satellite contract to Airbus over US rival

One of the Labour party’s biggest union backers has called for Andy Burnham to award a £2.4bn military satellite contract to the European manufacturer Airbus rather than a US rival, Lockheed Martin, amid concerns that as many as 600 jobs may be at risk.Sharon Graham, the general secretary of the Unite union, said it would be a “massive mistake” to go for a US company over Airbus, which is headquartered in France but designs and builds satellites in Stevenage in Hertfordshire and Portsmouth in Hampshire.The bid battle is likely to be seen as an early test of how Burnham’s pledge to use “public procurement to back British industry” will work. It will also be one of the first major spending decisions for the new defence secretary, Wes Streeting, as the UK tries to navigate the tricky relationship with the nationalistic US administration under Donald Trump, who wants other countries to buy more American kit.The Skynet 6 wideband satellite system (WSS) will be two geostationary satellites to carry the UK Ministry of Defence’s most sensitive data. However, the union, which represents workers making the satellites, and the Labour MP for Stevenage, Kevin Bonavia, are putting pressure on the government to opt for Airbus to preserve existing jobs rather than choosing the US deal.Lockheed Martin has promised to create about 500 direct jobs in north-east England, including an assembly facility in Durham, plus another 1,500 jobs in the broader supply chain. The potential for exports from the UK to other countries is thought to be a key part of its offer, as well as integration with the US military.Critics of the Lockheed bid said the US company would rely on American intellectual property rather than using technology developed in Britain. Lockheed has pledged to keep any intellectual property it develops in the UK, and has already invested in a research partnership with Northumbria University in Newcastle.Sharon Graham, centre, the general secretary of Unite, warned against ‘handing the British space industry over to the Americans’. Photograph: Graeme Robertson/The GuardianGraham said: “Andy Burnham has said he is backing Britain and British jobs. The Skynet WSS contract could be the first test of this. These satellites have been designed and built in Britain for the last 20 years ensuring hundreds of skilled jobs in Stevenage and Portsmouth, as well as thousands more in the supply chain.“Handing the British space industry over to the Americans in the first days of the new government would be a massive mistake, industrially and politically.”Defence Eye, an industry publication, reported that the MoD was pushing to make a decision as soon as 1 August.Senior defence industry insiders have said awarding the contract to Lockheed could make Airbus more likely to move its satellite construction elsewhere. They argue that the choice of a US system would be a fatal blow to efforts to export the British technology. The contract could also secure the facility during a planned merger of the space businesses of Airbus, France’s Thales, and Italy’s Leonardo.Airbus and its predecessor companies have built the UK’s military satellites for decades, including the Skynet 5 system used by the UK’s armed forces. The first Skynet satellite was launched in 1969 (well before the use of the name for a hostile artificial intelligence in the 1984 film The Terminator).skip past newsletter promotionafter newsletter promotionLockheed Martin, which also makes parts for the F35 fighter jet in the UK, declined to comment on the satellite competition. However, Rod Drury, Lockheed Martin’s vice-president for global business, said: “All our initiatives in the UK are based around UK government contracts, with a UK company, delivered predominantly through UK-based staff, leveraging the best of US-based tech and capabilities.“We are always looking to leverage the best of local industry and academia, as evidenced through our Northumbria University relationship, as evidenced through the significant number of supply chain agreements we have utilising UK companies.”‘Design, manufacture and test of military satellites is one of the UK’s crown jewels of defence capability,’ said Kevin Bonavia, the Labour MP for Stevenage. Photograph: Sophia Evans/The ObserverBonavia said: “This is a big opportunity for our new prime minister to back British manufacturing and sovereign capabilities, right off the bat.“The defence investment plan is clear: we must back British industry. Design, manufacture and test of military satellites is one of the UK’s crown jewels of defence capability. Thousands of highly skilled workers in Stevenage and Portsmouth already have the expertise that keeps the UK at the forefront of satellite technology.”Airbus declined to comment.