Britain’s last remaining helicopter factory is facing an existential threat, and with it, thousands of skilled jobs, as defence giant Leonardo warns it may walk away from the UK altogether after years of government delay on a crucial £1 billion military contract.
In a stark ultimatum that has sent shockwaves through Westminster and the defence industry, Leonardo’s chief executive Roberto Cingolani has warned that continued uncertainty over the New Medium Helicopter (NMH) programme could force the company to reconsider its entire UK presence.
At the heart of the crisis is Yeovil, Somerset, home to Britain’s only helicopter manufacturing facility and a cornerstone of the country’s aerospace heritage. The site employs around 3,300 people directly, with thousands more jobs tied to contractors and supply chains across the UK.
Industry figures estimate that as many as 12,000 jobs could ultimately be at risk if Leonardo withdraws.
A ‘last-ditch’ warning to ministers
In a private letter to Defence Secretary John Healey, first reported by The Telegraph, Cingolani described the long-delayed NMH programme, worth approximately £1 billion, as a “cornerstone” of Leonardo’s future in Britain.
Further delays, he warned, would “force a reevaluation of Leonardo’s UK presence”.
The Italian-owned defence group has been waiting 14 years for a major UK helicopter contract. Speaking to investors in November, Cingolani was blunt: “It has been 14 years since Yeovil didn’t get any contract from the UK government. It is getting difficult to keep this large plant alive without institutional collaboration.”
Leonardo is now the sole bidder for the NMH programme after Airbus and Lockheed Martin withdrew last year. The company submitted its best and final offer in April, but ministers have repeatedly pushed back a decision, with sources citing wider pressures on defence spending and ongoing problems with other programmes, including Ajax.
Jobs, contractors and supply chains under strain
The scale of what is at stake is significant. Unite the Union says Yeovil supports around 2,800 permanent staff alongside thousands of contractors, with an estimated 9,000 additional jobs in the wider supply chain. Leonardo’s broader UK operations support around 31,700 jobs and contribute roughly £2.5 billion to the economy each year.
The uncertainty has been particularly unsettling for contractors and recruitment agencies. Reviews from former agency workers describe difficulties transitioning to permanent roles and tensions between long-term staff and contractors. One former contractor said:
“Long-term employees seem to sit and watch the contractors do the work.”
Another agency worker described fair entry-level pay, but said it did not reflect the stress involved or match the benefits offered to permanent staff.
Leonardo, however, says its recruitment model is tightly controlled, working only with agencies on its preferred supplier list. The company invests around £3.5 million a year in training and development and is one of the UK’s largest employers of engineering apprentices and graduates.
Military capability falling behind Europe
The standoff has wider implications for Britain’s military readiness. The NMH programme is intended to replace the RAF’s Puma HC2 transport helicopters, which have already been retired, leaving a capability gap as European allies modernise their fleets.
While nations across Europe have upgraded their rotary-wing aircraft, Britain’s replacement programme has stalled. Defence analysts warn this risks undermining the UK’s ability to operate effectively alongside NATO partners.
If Yeovil were to close, it would mark the end of helicopter production in the UK. Manufacturing at the site dates back to 1948, when Westland Aircraft began producing Sikorsky helicopters. Over the decades, Yeovil has built iconic aircraft including the Lynx, Sea King, Merlin and Wildcat.
Beyond helicopters: wider UK operations at risk
Leonardo employs more than 8,500 people across nine UK sites, working on radar, communications, electronic warfare, infrared sensors and cyber security. In his letter, Cingolani warned that continued delays could also affect future investment in these areas.
That could place programmes such as BriteCloud, an electronic warfare decoy now being purchased by the US to protect F-35 jets, at risk. Leonardo’s UK research and development spending has doubled since 2018 to around £500 million a year, supporting work on artificial intelligence, data fusion and uncrewed systems.
The company also plays a central role in UK combat air programmes, including Tornado, Typhoon and the future Tempest fighter, which together account for more than 80% of Britain’s defence exports.
Political assurances, industry frustration
The Ministry of Defence has sought to reassure industry, saying it is following an established procurement process and working “at pace” to equip the Armed Forces while supporting UK jobs. Defence minister Luke Pollard has said Leonardo’s bid has been assessed, but stressed that details remain commercially sensitive.
Yet frustration has grown since the publication of the Strategic Defence Review in June 2025, which explicitly encouraged investment in UK industry. Defence firms say there is a growing disconnect between government rhetoric and procurement reality.
Lewis Bailey, founder and chair of Labour Tech, warned the loss of sovereign defence capability would carry serious risks.“If our companies are no longer sovereign, the task of defending Great Britain becomes much more difficult,” he said, warning of reliance on foreign-controlled systems.
A make-or-break moment
With a decision on the NMH programme expected before the end of the year, many see this as a defining test of Britain’s defence industrial strategy.
For Leonardo, it is a question of whether the UK still offers a viable future for large-scale defence manufacturing. For Yeovil’s engineers, technicians and contractors, the stakes are more personal, and the wait for clarity increasingly urgent.
