Leonardo has given the clearest warning yet that the future of its Yeovil factory in southwest England is under threat if it does not win an order from the UK through the ongoing New Medium Helicopter (NMH) competition.
Following a submission deadline last year, Leonardo is the sole remaining bidder for NMH with its AW149 super-medium-twin. If successful, the airframer has promised to build the helicopter at Yeovil.
Although the company submitted a best and final offer in April, the deadline for a decision from the UK Ministry of Defence has been repeatedly pushed back.
But speaking on a third-quarter investor briefing on 5 November, Leonardo chief executive Roberto Cingolani said it could not “subsidise Yeovil forever”.
Cingolani says he stressed that point in a recent meeting with UK defence secretary John Healey.
“It is 14 years that Yeovil didn’t get any contract from the UK government. It is getting difficult to keep this large plant alive without institutional collaboration,” he says.
Cingolani says the message received a “very collaborative and responsible answer” from Healey.
He expects a decision by year-end on whether to proceed with the acquisition, understood to be for around 24 airframes.
“I think we can be positive but we have to see what happens in the end. These tenders are very complicated [and] there is lots of political influence behind them.
“Of course, should this not happen we should seriously consider why we keep a plant there for 15 years not getting anything.
“This is part of the efficiency plan that we need to consider if things don’t run properly.”
Originally slated to replace multiple rotary-wing types in the UK inventory, the NMH would now only serve as a successor to the Royal Air Force’s already-retired Puma HC2 transports and the Airbus Helicopters AS365s operated by the Army Air Corps for domestic special forces missions.
Elsewhere, Leonardo’s helicopter division will absorb €125 million ($144 million) in costs related to a settlement agreed with Norway over its cancelled contract for 14 NH Industries NH90s. The figure is in line with Leonardo’s stake in the joint venture.
