LONDON — General Dynamics is to switch assembly and testing of a fleet of new armored fighting vehicles destined for the British Army from Spain to the UK, Prime Minister David Cameron will announce Thursday (July 23) during a visit to Wales.
Moving assembly and other elements of the program to Britain is part of a deal that includes extending to 2024 an in-service support contract for the 589 vehicles the British government ordered last year. The new support contract is worth £390 million (US $607 million) to General Dynamics.
General Dynamics secured a £3.5 billion production contract to supply scout reconnaissance and protected mobility recce support vehicles, along with an initial support package, from the Ministry of Defence on the eve of September's NATO summit in Newport, Wales. Under the deal, all of the vehicles were to have been built at General Dynamics Santa Barbara Sistemas in Spain.
That move drew criticism from members of Parliament and others. In response, Defence Procurement Minister Philip Dunne last year ordered a review of the decision to see if moving assembly to Britain was economically viable.
In a response to a parliamentary question July 21, Dunne said the General Dynamics proposal had been unsolicited and the extended support contract would last until the end of the manufacturing period in 2024.
The British vehicles are an updated version of the ASCOD armored machines built for the Spanish armed forces by Santa Barbara Sistemas. General Dynamics has been working on the British vehicles since 2010 when the company signed a £500 million development contract with the MoD.
No details were immediately available on how many of the British vehicles will be moved from the Spanish assembly line to a General Dynamics site in South Wales under the revised arrangement.
The UK arm of US-based General Dynamics already has its headquarters at Oakdale, near Newport, where it does mostly armored vehicle and military communication development work.
Early in the program, General Dynamics proposed to have the first 100 or so vehicles assembled and tested in Spain with the remainder assembled in Britain from parts made in Spain and elsewhere.
At one time the company proposed that the then government-owned Defence Support Group (DSG) undertake assembly, integration and test work, but that deal fell through.
DSG, which maintains most of the British Army's fleet of armored vehicles, was sold to Babcock International last year.
Part of the supply chain includes the development and assembly of the turret for the scout version being undertaken by Lockheed Martin at its Ampthill plant in Bedford, England.
The scheme to involve British assembly of the vehicle was eventually dropped on cost grounds.
The deal, which will see assembly, integration and testing undertaken in South Wales, will make a contribution to the UK economy for the next 30 years, Dunne said in a statement.
"The decision from General Dynamics UK to create a facility in Wales to assemble and maintain this cutting-edge capability for the British Army will result in greater efficiency in maintaining vehicles, lower costs and create highly-skilled jobs in the process," he said.
Email: achuter@defensenews.com
Andrew Chuter is the United Kingdom correspondent for Defense News.
