Warrior production contract “could add £1bn to the UK economy”: KPMG report

Harry Lye 8 October 2020 (Last Updated October 8th, 2020 14:36)

A KPMG report commissioned by Lockheed Martin has said that a production contract for the Warrior Capability Sustainment Programme (CSP) could add up to £1bn to the UK economy.

Warrior production contract “could add £1bn to the UK economy”: KPMG report
Warrior CSP during trials at Bovington Armour Centre. Image: Lockheed Martin.

The £1bn in Gross Value Added (GVA) to the UK economy is based on an expected production contract covering the upgrade of 275 vehicles between 2021 and 2029. At this time, the exact number of vehicles set to be upgraded has yet to be confirmed as Warrior CSP is still under a development contract.

Under the Warrior CSP programme, Warrior Armoured Fighting Vehicles (AFVs), originally built in the 1980s, will receive a new turret based on the CTA International CT40 cannon as well as other upgrades to the vehicles electronics systems.

Lockheed Martin has said around 80% of the Warrior CSP solution is sourced from British Companies in its current state. Once awarded, production and integration of the new turret will be completed at Lockheed Martin’s site in Ampthill, Bedfordshire.

The KPMG report adds that a production contract for the vehicles could deliver 100 annual Full-Time Equivalent (FTE) jobs and up to 2,000 annual FTE jobs through the supply chain and direct employment at the peak of production.

An executive summary of the report seen by Army Technology says that based on an expected contract award in the last quarter of 2021, resultant vehicle deliveries would likely take place between 2023 and 2028.

The MOD told Lockheed Martin in August 2020 that it intends to upgrade up to 290 Warrior AFVs. Lockheed Martin was originally awarded a development contract for Warrior CSP in 2011.

Under this timeline, it would have been 12 years from development contract to delivery of the first Warrior CSP vehicles.

KPMG found that a production contract would generate £278.9m in direct GVA, £484.3m in indirect GVA from the supply chain and £280.4m in GVA created through Lockheed Martin employees spending Warrior CSP-related wages.

Lockheed Martin Ampthill vice president and managing director Lee Fellows said: “Since acquiring the Ampthill site, Lockheed Martin has invested significantly into the facility and our number of employees has grown too.

“We’ve created an advanced, state-of-the-art manufacturing facility with a modern and high-tech production line. Our vast 20,000mcentre of excellence is the only one of its kind for turret manufacturing in the UK.”

At Ampthill, Lockheed Martin is also manufacturing 245 turrets for the British Army’s AJAX reconnaissance variant. The AJAX turret uses the same CT40 cannon as Warrior CSP.

Lockheed Martin has estimated that the medium calibre turret market could be worth £16bn over the next decade.

Fellows added: “Our exponential growth over the years has promoted an investment of around £23 million into the Ampthill site – we’ve not only invested in the facility, but we’ve invested in our people too.

“The economic impacts of the Warrior Capability Sustainment Programme have been significant to the UK economy and a production contract will bring greater prosperity impacts to the UK.”

Warrior CSP is designed to extend the in-service life of the Warrior armoured fighting vehicle (AFV) beyond 2040. The programme is comprised of three parts; the Warrior Fightability Lethality Improvement Programme (WFLIP), Warrior Enhanced Electronic Architecture (WEEA), Warrior Modular Protection System (WMPS).