French electronics giant Thales has signed ten-year contract with the Ministry of Defence worth up to £600 million in a deal which secures at least 50 high-tech Scottish jobs.
The maintenance and repair contract will see Thales’ UK sites provide support to the “eyes and ears” of the Royal Navy’s submarine fleet including periscopes, as well as sonar and electronic warfare systems for warships.
A joint Ministry of Defence and Thales team based in Bristol will manage the contract, which will involve staff from Thales sites in Glasgow, Somerset, Stockport and Crawley.
Thales’ engineers at the Royal Navy’s three naval bases at Faslane, Plymouth and Portsmouth will also provide specialist technical advice and support on sensor systems both at home and overseas.
The contract secures employment for 230 Thales employees – including around 50 in Glasgow – and a further 300 people within the extended supply chain across the UK.
Major suppliers to Thales who will benefit under the contract include marine engineers MacTaggart Scott of Loanhead.
The contract – called the “sensors support optimisation project” (SSOP) – builds on an existing agreement with Thales which has provided support to the Royal Navy’s sonar and electronic warfare systems for the past ten years.
Under the terms of SSOP, the contract has now been extended to include all of the Royal Navy’s submarine visual systems, including periscopes for the Vanguard and Trafalgar class submarines and optronic masts for the Astute class submarines.
The submarine visual systems were previously supported under separate contract arrangements with Thales’ optronics business in Glasgow.
Philip Dunne, the UK’s minister for defence equipment, support and technology, said the contract was “good news for the Ministry of Defence and for UK industry”.
The contract, which brings together a number of support contracts under one agreement, is estimated to save the MoD save about £140m over the ten year period.
“Not only will it secure a number of jobs across the UK whilst delivering savings but will also provide essential support for the combat equipment that helps give the Royal Navy’s fleet of ships and submarines a vital technological edge wherever they are based in the world,” said Dunne.
Victor Chavez, chief executive of Thales UK, said: “This contract recognises the value that can be achieved and the savings that can be delivered through a long-term services agreement.
“It also reflects the successful way in which Thales UK has delivered the required outputs over the past ten years. This project refines that approach to optimise performance over the next ten years, and reinforces our positive, well-established relationship with the Royal Navy.”
Thales UK employs 7,500 staff based at 35 locations with revenues last year of around £1.3 billion.
Its Glasgow optronics site employs around 700 staff working on contracts in the defence sector and also for industries such as transport where it develops systems used for rail signalling.