Leonardo warns Yeovil helicopter factory at risk without Puma replacement deal

Leonardo has warned the UK government that it may be forced to shut down its helicopter manufacturing operations in Britain if it fails to secure a flagship £1 billion Ministry of Defence contract, a move that would threaten the future of the country’s last remaining helicopter factory.

In a letter to defence secretary John Healey, Roberto Cingolani, chief executive of the Italian defence group, said the contract to replace the long-serving Puma helicopter was central to Leonardo’s long-term commitment to the UK. Without it, the company would be compelled to reassess its entire British footprint, including its historic manufacturing base in Yeovil, Somerset, which employs around 3,300 people.

Leonardo’s AW149 helicopter is currently the sole remaining contender for the programme, after Airbus and Lockheed Martin withdrew from the competition last year. The company submitted its final bid in April, with a decision now resting with ministers.

Cingolani warned that any delay or cancellation of the programme would have serious consequences. In his letter, first reported by the Telegraph, he said the absence of new UK defence contracts would force Leonardo to reconsider further investment in areas such as electronics and cybersecurity, in addition to core helicopter manufacturing.

Leonardo, the successor to Westland Helicopters, has produced military aircraft in Yeovil for decades and currently builds and supports more than 100 helicopters for the British armed forces, including the Merlin and Wildcat fleets. The site also services export orders for customers in the Middle East and North Africa, but senior executives have made clear that overseas work alone cannot sustain the factory indefinitely.

Speaking to investors last month, Cingolani said Leonardo could not “subsidise Yeovil forever”, noting that the company had gone more than a decade without securing a major new helicopter manufacturing contract from the UK government. “At some point we should consider why we keep a plant there for 15 years and don’t get anything,” he said.

The Ministry of Defence has sought to downplay concerns, insisting that no final procurement decision has yet been made. A spokesperson said officials were continuing to assess the business case for the new medium helicopter programme, adding that the tender submitted by Leonardo was still under active evaluation.

Defence minister Luke Pollard reiterated that position in the House of Commons last week, saying that while Leonardo’s bid had been assessed, the process remained commercially sensitive and no details on aircraft numbers, delivery schedules or contract value could yet be disclosed.

The warning comes as Prime Minister Sir Keir Starmer has pledged to significantly increase UK defence spending, committing to raise it to 3 per cent of GDP in the next parliament and to 3.5 per cent by 2035 under Nato obligations. For Leonardo, the Puma replacement contract is seen as a test of whether that rhetoric will translate into sustained investment in Britain’s defence manufacturing base.

Industry figures say the outcome could define the future of sovereign helicopter production in the UK, with Yeovil’s fate hanging on a single decision that could either secure decades of skilled work — or mark the end of an era for British aerospace manufacturing.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.