$5 billion Algerian helicopter deal for UK plant

BRITAIN’s last helicopter maker is in advanced talks with the Algerian government over a $5 billion (£3.1 billion) order that would safeguard more than 4,000 jobs in Somerset.

• The order, which defence industry sources say could be signed off in the next few months, is expected to be for more than 80 aircraft, including 40 Merlin helicopters, which are made at the Westland factory in Yeovil.
• The plant is now owned by Agusta Westland, the helicopter arm of Finmeccanica, the Italian defence contractor. Pier Guarguaglini, Finmeccanica’s chairman and chief executive, masterminded the takeover of the UK plant in 2004, buying out GKN, the quoted engineering group.
• Agusta Westland yesterday declined to comment on the talks. It has never confirmed the Algerian order, yet it is understood to already be under contract for 10 helicopters.
• The Algerian government, which has been fighting radical Muslim groups for more than a decade, is understood to have requested no public comment be made on the deal. The Anglo-Italian helicopters will become the mainstay of the Algerian armed forces, which have previously relied on Russian and French equipment.
• Part of the deal is an undertaking by Agusta Westland to help set up an assembly plant and training and support facilities in Algeria.
• Some of the helicopters will be put together in the new plant, including about 25 of the Merlins.
• Once the deal is completed, Algeria will have the second-largest fleet of Merlins in the world, behind the UK, which has 70.
• The other helicopters to be bought by Algeria are understood to be the AW109 and AW139 models, smaller than the Merlin and made in Italy.
• The Algerian work will be a welcome boost to Yeovil, which has been busy recently refurbishing helicopters for the British armed forces in Afghanistan, and developing the new “Future Lynx”. It received a contract for 62 Future Lynx helicopters last year after a lobbying campaign saw the deal escape defence cuts.