Lockheed Martin's proposed £85m satellite factory at NETPark in County Durham remains dependent on a Ministry of Defence decision over Britain's next military communications satellites, after The Times reported that a decision expected this week had been postponed.
Lockheed Martin and Airbus are competing for the Skynet 6 Enduring Capability Wideband Satellite System.
A Lockheed Martin win would bring satellite assembly and testing to its proposed facility at NETPark in Sedgefield.
Lockheed Martin said in April that the site could initially create around 500 jobs once it received government approval, citing an independent economic impact assessment commissioned by the company.
North Durham MP Luke Akehurst, writing in the Financial Times this week, said a successful bid would establish a County Durham manufacturing facility with 400 skilled jobs and further employment in the supply chain.
The Ministry of Defence began the Wideband Satellite System procurement in 2023. It said last year that the contract was valued at more than £1.5bn and covered the design and manufacture of up to three tranches of geostationary satellites, along with ground infrastructure and launch operations.
North Durham MP Luke Akehurst says a successful Lockheed Martin bid could bring 400 skilled jobs to County Durham. Image source: Wikipedia
The Financial Times reported this month that the current competition covers two geostationary satellites and could be worth up to £2bn.
Whichever company wins will have to maintain a UK-based design authority and provide domestic satellite assembly, integration and testing. The Ministry of Defence says the competition also prioritises sovereign access to critical space technologies.
Lockheed Martin puts its North East investment at more than £100m, including a £15m commitment to the North East Space Skills and Technology Centre at Northumbria University and the proposed factory.
Review North reported in September that the NETPark facility still needed government approval. It would add spacecraft assembly and testing to a regional space sector that already includes satellite communications businesses such as Filtronic and aXenic and research at Durham and Northumbria universities.
The competition has developed into a wider argument over the future of Britain's defence space industry.
Airbus is the incumbent Skynet satellite supplier and is already building the Skynet 6A spacecraft in the UK. Royal Aeronautical Society head of research Professor Keith Hayward argues that retaining Airbus would better protect Britain's existing sovereign capability.
Writing in the October edition of the society's Aerospace magazine, Hayward says there is a growing risk in depending on the US for core defence capabilities amid what he describes as a "volatile and inconsistent US administration".
He says Lockheed Martin could compete with Airbus on jobs and value for money but concludes that Airbus "looks like the better option for maintaining a key element of the nation's sovereign capability".
Lockheed Martin presents its proposal differently. The company says the County Durham facility would produce UK sovereign systems for domestic use and export.
Lockheed Martin UK chief executive Paul Livingston says: "There is such a long history in the region of manufacturing and that, combined with the technology we can bring, make for a very exciting future."
The Ministry of Defence has not announced a preferred bidder. The Financial Times reports that final offers submitted by the two companies expire in mid-November and that a decision is due within weeks.
