LONDON -- Britain's economy may be in shock and its currency tanking against the dollar after the decision to exit the European Union, but there was little sign of that as the government here used the opening of the Farnborough air show July 11 to announce over $5 billion of orders for Boeing Apache helicopters and P-8 maritime patrol aircraft.
The sales were the main attraction of a series of announcements that sought to head off criticism that the government had failed to squeeze sufficient work for local industry out of the two foreign military sales deals at a time when jobs in the sector are under threat from a weak domestic market.
Included in the partnership pledge to the British government is a Boeing commitment to create an additional 2,000 jobs in the UK in part by making the country its European base for training, maintenance, repair and overhaul across its military fixed-wing and rotary platforms.
Additionally, government officials said in their announcement that they intend to work with Boeing to build a new $130 million P-8A operational-support and training base at RAF Lossiemouth in Scotland.
British production work on the P-8 to date is pretty much limited to auxiliary fuel tanks made by Marshall Defence and Aerospace.
That may change, though. US government officials over the weekend confirmed there were ongoing discussions about the possibility of fitting a British airborne sensor to the aircraft, and Philip Dunne, the UK's defense-procurement minister, said in Parliament recently that the defense ministry was studying plans for improving the P-8's limited overland capability.
The Apache deal offers British sub-contractors access to bidding for work on the program but appears to leave Leonardo Helicopters' production and design facility in Yeovil, England, out in the cold.
Britain's only helicopter manufacturer has been given maintenance and repair work on the existing British Army fleet of Apaches until they go out of service in 2024. But there is no commitment beyond that for the new machines, although Defense Secretary Michael Fallon said he wants Leonardo to be among the companies involved in the work.
"There is still plenty of work for Leonardo on the Wild Cat and upgrading the Merlin and I hope on the future maintenance of Apache," said Fallon.
Dunne said the MoD was not "announcing today the enduring support arrangement for Apache subsequent to getting the aircraft on contract and delivered." But, he added, "I'm pleased that [Leonardo] and Boeing are talking to each other about future relationships.
"We are providing some £3 billion of spend for support to put through that company [Leonardo] in the next 10 years, and we'll also be looking to work with them for innovative solutions in the future," said Dunne.
That innovative work could possibly lead to the development of a rotary unmanned air vehicle. Leonardo has already done some test work with a Polish helicopter adapted for the role.
The UK arm of the business has also extended a strategic partnering agreement, government officials said today. The arrangement, which focuses principally on increasing cost effectiveness, has been in play since 2006.
Defense ministers here signaled the two orders announced today may not be the end of the defense contract announcements set to be unveiled at Farnborough this week, although that may be influenced by government changes in the next few days.
Leonardo has been selected as the preferred bidder for a big Mode 5 blue-force-tracking system, which is due to be formally announced on July 13.
The Boeing production deal and the industry initiatives were part of a wider effort by the British Government here today to try and reassure business leaders that the aerospace industry remains a key element in its drive for economic prosperity in the wake of the Brexit vote.
Included in that move is an additional $474 million to be invested in a jointly funded government-industry aerospace growth plan, said government officials.
"Whatever uncertainties our country faces, I want the message to go out loud and clear: the UK will continue to lead the world in civil and defense aerospace. We aren't just open for investment; we are a place the global aerospace industry wants to do business – as Boeing's long term partnership with the UK proves," said Prime Minister David Cameron as he opened the show.
As it turned out, Farnborough may have been the final public appearance for Cameron as prime minister as the Conservative Party unexpectedly found itself with a new leader later in the day after one of the two contenders suddenly withdrew, leaving Home Secretary Theresa May set to take over the reins.
She is expected to start forming a new government later this week leaving open the prospect that Fallon and Dunne may no longer be in their jobs by the end of the week.
What impact the steep fall in the value of the Pound against the dollar will have on deals like Boeing's P-8 and Apache is unclear.
A significant part of British defense procurement is paid for in US dollars, but the defense secretary said it was "too early to judge where Sterling is going to settle" to make any judgement about impact.
Andrew Chuter is the United Kingdom correspondent for Defense News.
