BAE Systems secures UK order to boost production of battlefield munitions

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BAE Systems has won new orders from the UK to boost production of war material as Western governments seek to address a global shortage that is hampering Ukraine’s fight against Russia.

The £280mn agreement, which could be worth more than £400mn, will enable Britain’s biggest defense contractor to increase its production capacity of the key 155mm artillery shell eightfold.

The 155mm ammunition is the standard for most NATO howitzers – long-range artillery launchers – including the US’s M777 and France’s César, both of which have been sent to Ukraine. The Ukrainian armed forces’ high demand for ammunition and explosives has depleted Western government stockpiles and has become a test for Europe’s industrial production capacity.

Defense officials have repeatedly warned that they need concrete contracts from governments to be able to invest the significant sums needed to expand production facilities. The ramp-up plans have also been delayed due to supply chain constraints arising out of the COVID pandemic.

BAE chief executive Charles Woodburne said the investment would enable the company to “significantly increase production and retain the vital sovereign capability to deliver state-of-the-art weapons, as well as create and retain highly skilled jobs across the UK”. .

The announcement comes as NATO allies are expected to agree on a blueprint for multinational cooperation on procurement when they meet in the Lithuanian capital Vilnius this week. The so-called “Defence Production Action Plan” is also expected to urge the streamlining of standards to ensure interoperability between different countries’ weapon systems.

Britain’s Prime Minister Rishi Sunak will use his trip to the summit on Tuesday to urge NATO members to spend a minimum of 2 percent of their GDP on defense, an aspiration that was set nearly two decades ago but which has Last year the feat of 30 members was achieved out of only nine.

He would call for the goal to be a “ceiling not a floor”, which he would argue is vital to Russia’s defense against Putin.

Sunak will also highlight Britain’s role in supporting Ukraine. The Prime Minister earlier this year announced £5 billion of extra funding for the UK’s defense which will be used to replenish ammunition stockpiles.

The new contract, which has been under discussion for months, builds on an existing £2.4bn 15-year partnership agreement between BAE and the Ministry of Defence, which came into force in January this year. It would also enable BAE to increase production of other munitions.

BAE said the orders, which could add up to more than £400mn over time, would create more than 200 new jobs at its sites in the north of England and south Wales. The company said it is already investing in an additional 155mm machining line in Washington, Tyne & Wear, as well as a new explosives filling facility in Glascoed, South Wales.