AMPTHILL, England — A leafy road on the edge of a picturesque small English town that wouldn't look out of place in a Dickens novel is not where you expect to find a company generating key technology for armored vehicles, ballistic missile defense, the nuclear deterrent and other systems.
You might also be a little surprised to find the 64-acres site sitting close by farm land just outside Ampthill in Bedfordshire, southern England, produces more revenue for Lockheed Martin than any other development and manufacturing site outside of the US.
Lockheed Martin acquired Ampthill in 2005 when it purchased a tiny British defense company called Insys as part of its effort to grab a larger share of the local market.
At the time, one aerospace analyst referred to the purchase as a "pimple on a coconut" compared with the rest of Lockheed.
It still is, but with annual revenues of around US $200 million — projected to grow to $400-$500 million in the next three to five years — it's starting to look a little more like a small beauty spot than a pimple as at a time when Lockheed pushes Martin is pushing overseas sales growth amid hard to help offset declining US defense budgets.
"Ampthill is the fastest growing and largest offshore business for Lockheed Martin. It also happens to be in our largest export market, so we are really well positioned to maximize the investment the corporation has made here," said Richard Muir, the Ampthill business development director.
That investment has seen Lockheed Martin expand the infrastructure and capabilities at a cost of $30 million to date, with a further $13 million earmarked for this year and about $10 million annually over the following three years, said Alan Lines, the vice president and managing director of Missiles and Fire Control UK for Lockheed.
Much of the investment is going towards establishing the capability to manufacture, integrate and test armoured vehicle turrets destined to be fitted to scout vehicle's being built for the British Army by General Dynamics.
Lockheed Martin has been leading the design and development effort on the turret and secured a production deal last September worth more than over $1 billion.
It's the main reason that the Ampthill business has about eight times its turnover in order backlog, although re-entry vehicle, target, nuclear deterrent and other secret work for customers like the US Missile Defense Agency and the UK Atomic Weapons Establishment have also grown, fast having doubled in turnover in the last five years, said Muir said.
Ampthill is also the site of a recently opened F-35 virtual analysis laboratory capable of conducting operational analysis, simulation and other tasks
It's the only one of its kind outside the US and Muir said that while the laboratory was initially for the use of the British military, it is hoped other F-35 buyers around the world will also use be able to utilize its capabilities.
"Long term, we think the business could be significant," said Muir said.
"The US has supported the site with substantial investment since 2005, so it's pay back time a little bit for them really," Lines told reporters during a briefing at the site on Jan 6.
Aside from the Scout vehicle work, Ampthill is also leading the capability sustainment effort for British Army Warrior infantry fighting vehicles. The most complex item of that work is the installation of a new turret with the same CTAI 40mm cannon being used in the Scout vehicle.
Lockheed Martin secured a £642 million (US $970 million) deal in 2011 to develop the sustainment capability as part of what could eventually be a £1 billion program.
Numbers of vehicles to be upgraded have come down over time, and of the 380 Warriors planned to get the sustainment package, only around three quarters are expected to get the turreted version.
Like the Scout vehicle, the turrets for the Warrior will be built, integrated and tested by Ampthill.
It's a Lockheed Martin business that five years ago didn't really exist in the UK. Now, Lines said, Lockheed Martin, along with General Dynamics, are the "dominant force in the British armoured fighting vehicle industry."
Longtime supplier BAE recently ended platform production in the UK, closing its once huge Newcastle factory with the final delivery of the Terrier combat engineering vehicle to the British Army.
The company retains an interest in the market here, predominantly seeking support and upgrade opportunities on vehicles like its Challenger II main battle tank.
Muir said Lockheed Martin is also interested in bidding for the Challenger II life extension work when it comes up, as well as chasing export opportunities for turrets in Qatar and a overhaul of Kuwait's Desert Warrior fleet.
"With General Dynamics currently [building the Scout vehicle order] offshore, Lockheed Martin is in effect the indigenous capability for the UK, the only significant onshore supplier," Lines said.
The production element of the Warrior contract is not expected to be exercised until after the strategic defense and security review due after the May general election later this year.
The money for the program is committed in the Defence Ministry's of Defence long-term budget, but like just about every program where the contract is not nailed down tightly, it could be threatened by the strategic review and potentially heavy budget cuts expected by a new government.
"The production option [for Warrior] is sitting there, but nothing is watertight," Lines conceded.
Despite that, the British executive said he thought it was upcoming vehicle programs, rather than Scout or Warrior, that would be impacted by the review.
"In the short to medium term, we don't feel [the review]
SDSR
will have any great impact, the question mark has to be on the future programs," Lines said. "It's going to affect Challenger II, Armoured Battlefield Support Vehicle, utility vehicle. Whatever is left we will be competing for it."
said Lines.
Howard Wheeldon, of Wheeldon Strategic Advisory, said Ampthill demonstrates how Lockheed Martin is advancing its international credentials.
"The acquisition of Ampthill was an excellent example of a strategy that looks outside of the box. The point is that while others have closed sites, LM has continued to invest in its facilities in order to enhance the ability to compete in international markets," he said.
Email: achuter@defensenews.com.
Andrew Chuter is the United Kingdom correspondent for Defense News.
