Airbus chief warns UK risks losing European space role to Lockheed Martin

Lockheed Martin offers 500 jobs in north-east factory rival to Airbus

Guillaume Faury, the chief executive of Toulouse-based Airbus, is understood to have sent a personal letter to the British prime minister in an effort to steer the Skynet 6 military satellite contract toward his company. The intervention, which arrives amid heightened scrutiny of US government reliability after Ukraine complained of restrictions on its access to Elon Musk’s Starlink network, argues that the choice of manufacturer could shape the UK’s standing in European space for decades.

The Skynet 6 satellites will carry the British armed forces’ most sensitive communications through 2042, replacing the Skynet 5 system currently operated by Airbus. Several sources said they believed no final decision had been made but indicated that Lockheed Martin’s bid was favoured by the Ministry of Defence. The final choice rests with Burnham and the chancellor, John Healey. A decision had been expected over the summer but was delayed in part by Burnham’s arrival in office, with the prime minister and Healey weighing the two bids on both financial terms and the capabilities each company can offer.

Faury is understood to have warned Burnham that if Airbus’s British satellite operations were no longer viable, the UK could miss the chance to host the European hub for military satellite communications once a long-awaited merger of the space subsidiaries of Airbus, Thales and Leonardo — referred to internally as Project Bromo — was completed. Senior industry figures have previously claimed that Airbus’s UK satellite operations would not be viable without the Skynet contract, meaning the company might close its sites at Stevenage and Portsmouth, which employ 600 people.

Lockheed Martin’s rival bid centres on a new factory in County Durham in north-east England, with the company pledging £100m of investment and around 500 high-skilled jobs in a region that has historically been a centre of advanced manufacturing. The mayor for north-east England, Kim McGuinness, said bringing satellite manufacturing to the north-east would be “a gamechanger for the space and security sector, bringing £100m of investment and creating 500 high-skilled jobs as well as a much greater impact through the supply chain”. Luke Akehurst, the Labour MP for North Durham, said the bid would mean “a state-of-the-art new manufacturing facility” in the region that “represents a massive investment in the reindustrialisation of the north-east of England, building on our region’s proud heritage of advanced manufacturing”.

Lockheed Martin is one of the largest US defence “prime” contractors, but the company argues its UK subsidiary will exercise full control over any satellites built in Britain. A spokesperson said Lockheed Martin UK, “a British company, will establish facilities to develop an ecosystem alongside our regional partners in the north-east of England to provide the UK with a sovereign space capability”. The spokesperson added that the operation “will create jobs, supply chain opportunities and the potential for exports” and “will have a UK design authority and a UK chief engineer”. People close to Lockheed Martin have strongly denied that the US government would have control over the satellites. The company declined further comment on what it called the “ongoing procurement process”.

Airbus declined to comment on the letter. Unite, one of the Labour party’s biggest union backers, had separately warned against “handing the British space industry over to the Americans” at a time when there are increased questions over whether the UK can rely on the US government. The political pressure is unfolding against a wider backdrop: Ukraine has complained that its access to Starlink, the satellite network operated by Musk’s SpaceX, was restricted, reportedly at the behest of the US government.

A UK government document related to the system noted that satellites must be able to withstand a “proliferation of counterspace capabilities to disrupt, deny, degrade or destroy space-based enablers”, highlighting radio jamming, hacking and direct physical attacks as possible threats. The Skynet programme dates back to 1969, when its first satellite was launched, well before the name was repurposed for a hostile artificial intelligence in the 1984 film The Terminator.

The three-way merger Faury cited, known internally as Project Bromo, is intended to combine the space subsidiaries of Airbus, Thales and Leonardo into a single European group with the scale to rival the leading US space companies. Airbus’s pitch to Burnham is that losing Skynet 6 could leave the UK on the outside of that merged entity at the moment Europe’s fragmented national champions are being consolidated.