£3 billion defence contract hope for Shropshire
A £3 billion defence contract for a new armoured vehicle for the British Army will see parts made in Telford.
The move, awarded to a German consortium, is a boost to around 300 workers employed at BAE Systems' factory at Hadley Castle.
The BAE combat vehicles plant will provide parts for the eight-wheeled Boxer multi-role vehicle. It is also being considered by Munich-based Artec for production and assembly line work.
The aim is to have the first vehicle in service with the Army in 2023.
The decision by the Ministry of Defence to hand the contract to Artec is controversial because the work has been given to non-British company.
But Artec had already signed deals with British supply firms, including BAE, for sub-systems and engines in anticipation of a deal being struck.
The MoD says Artec will create 1,000 UK jobs by setting up a production line in the UK with locations including Telford, Glasgow, Newcastle, Sheffield, Stockport and Wales being considered. Hundreds more jobs are expected to be created in the supply chain.
The British Army has selected Boxer for its mechanised infantry vehicle requirement. It features a removable mission module which allows it to be rapidly changed to meet different operational requirements.
Agreements
The MoD said that the UK was re-joining the Boxer programme on which it played a major role in the original design, development and testing.
Artec has also signed partnership agreements with Pearson Engineering and Thales UK, in anticipation of a deal being struck.
As part of the proposed deal, the UK is also expected to see substantial inward investment from Rheinmetall, one of Artec’s parent companies, which signalled its intention to launch a production and integration centre for armoured vehicles in the UK as part of the programme.
The news is a boost to the BAE System plant in Telford, which specialises in armoured vehicle maintenance and sits alongside the GKN plant currently at the centre of a controversial takeover by rival Melrose.
It was revealed in December that the productivity at BAE Systems has risen by 35 per cent in the last three years.
The report by Oxford Economics shows that investment in skills and technology has increased year on year leading to labour productivity rates of £128,000 per employee at BAE. That is about 80 per cent higher than the UK average.
The report also showed that BAE's operations put about £11.1 billion into the UK economy, including direct, supply chain and workforce spending contributions.
Experts at Oxford Economics praised the Telford factory, saying: "The site is well integrated into the local supply chain, and consequently its indirect impact can be expected to be substantial."
