Britain’s last remaining military helicopter factory and its 3,000 highly skilled manufacturing jobs are in jeopardy amid a cabinet row over a £1 billion defence contract.
In a spat with echoes of the Westland Affair under Margaret Thatcher 40 years ago, tensions are understood to have escalated as ministers missed their own deadline for a decision on whether to approve the deal.
Sharon Graham, the Unite union leader, said Sir Keir Starmer and John Healey, his defence secretary, had been supportive of awarding the contract to the Leonardo helicopter factory in Yeovil, Somerset.
But she said “something has changed” within the government in recent weeks, leading to further delays that jeopardise Britain’s sovereign capability to make military helicopters.
Whitehall sources said there was a view within the Treasury that rapid advances in drone warfare had rendered helicopters vulnerable on the battlefield and no longer necessarily worth their considerable cost.
Ministers had set the end of December as the deadline by which to decide on granting Leonardo a contract to build medium-lift helicopters, used for cargo and troops. Bosses at the Italian company have said they will shut the otherwise loss-making factory if they are not awarded the contract.
The deadline was pushed back to January 19 by Whitehall officials as the date by which a decision had to be made for terms to be finalised before Leonardo’s tender offer expires on March 1.
An MoD spokesman said: “The UK’s new medium helicopter programme is ongoing and no final procurement decisions have yet been made. That outcome will be confirmed in due course.”
The “Westland” works in Yeovil date to 1915 and has been described as the “home of British helicopters”.
It started as a base for fixed-wing aircraft and played an important role in the Second World War, producing Spitfire fighters.
The focus switched to helicopters after the war with a licensing agreement with the US firm Sikorsky. The factory is best known in recent times as being at the centre of the Westland Affair in 1986. With the works facing closure, Margaret Thatcher’s cabinet split over rival rescue plans from the US firm Sikorsky and a European-led consortium.
Michael Heseltine, defence secretary at the time, stormed out of No 10, saying that his views were being ignored. He resigned, saying that “trust between the prime minister and her defence secretary no longer exists”. Leon Brittan, the trade and industry secretary, resigned over the same matter two weeks later.
Michael Heseltine resigned as Thatcher’s defence secretary when they clashed over the factory’s future
JOHN MANNING FOR THE TIMES
Thatcher selected the American firm, which held control of Westland until the business was sold to GKN, a British engineering group, in 1994. In 2000, GKN merged its helicopter division with Finmeccanica, the predecessor of Leonardo. The Italian company took sole control of the business from 2016.
This weekend, Lord Heseltine said: “It’s a familiar story to me. Someone in government needs to get their show on the road. That’s why I wanted to create a European procurement policy, which would have involved Westland.”
Leonardo has been the sole bidder for the contract to replace the Royal Air Force’s ageing fleet of Puma transport helicopters since September 2024 after the European firm Airbus and America’s Lockheed Martin withdrew from the tendering process.
An AgustaWestland AW101 helicopter undergoes testing in Yeovil
ALAMY
Leonardo is a €33 billion (£29 billion) defence giant listed on the Milan stock exchange. The Italian state retains a stake in the company of about 30 per cent. Leonardo also has facilities in Bristol, Basildon, Edinburgh, Lincoln, Luton and Newcastle-upon-Tyne. It employs 8,500 people in the UK.
Its chief executive, Roberto Cingolani, has made little secret of his frustration with delays to the helicopter contract. “We cannot subsidise Yeovil forever. It is 14 years that we haven’t had any contract from the UK government,” he said in November last year.
“It’s getting difficult for us to keep this big plant alive without institutional collaboration.”
Leonardo declined to comment further this weekend.
Graham said she had Healey “on speed dial” over the situation as time runs out. “What’s really clear is that something has changed … in the first weeks of 2026,” she said.
She added that Healey understood the need for the new contract to be awarded to preserve the future of the works, which employs 3,000 people and supports a further 10,000 jobs in the supply chain.
“My understanding was that this was something No 10 was happy with,” Graham said. “This is something that, quite frankly, should have a tick in every box. The idea that they may come up with an excuse as to why they won’t do it, I don’t think that will wash. I don’t think they’ll be forgiven.”
Westminster has been in turmoil over defence spending since the start of the year. Senior military chiefs have warned the prime minister of a £28 billion shortfall. And it emerged in early January that the Defence Investment Plan, which had been scheduled for publication by the end of 2025, had been delayed until March.
Experts agreed with the need to replace the helicopters, pointing out that although fighting in Ukraine had exposed the shortcomings of using helicopters on the front line, they were still vital behind the lines. “The military needs to have a utility helicopter fleet that is not older than the people flying them,” said Nick Cunningham, an analyst at Agency Partners.
The MoD said: “We have signed over 1,100 major contracts since July 2024, boosted defence spending by £5 billion this year and will invest a record £270 billion in defence over this parliament.”