A fierce battle between helicopters

The three-way battle to win the Army's pounds 2.5bn attack helicopter order has been one of the most closely fought campaigns anyone in the defence industry can remember. Financially, the order will be among the largest procurements of the decade. Strategically, it will determine the shape of the British aerospace industry. The Cabinet sits down today to consider such weighty matters, but if the rumours are true there is already a clear winner - Westland.

Westland has teamed up with America's McDonnell Douglas to offer the Apache helicopter, which on the face of it looks a worthy winner. The Army prefers the Apache, a tried and tested machine with no question marks over its ability to meet the 1998-99 delivery date. It is also the cheapest of the three.

The Tiger, produced by the Franco-German Eurocopter and fronted by British Aerospace in the UK, is the most expensive. Worse still, the Trigat missile system it is meant to carry has still to be matched with the Tiger. The third contender, the Cobra Venom, a Bell helicopter being kitted out with GEC electronics, still awaits substantial re-engineering work to turn it into a suitable product.

These are all good reasons for opting for Westland. No doubt there is an element of trans-Atlantic political payoff in the decision too. Even so, to reject BAe and GEC, Britain's two flag-carrying defence contractors, in favour of what is in essence Westland's screwdriver solution could have serious repercussions. Choosing Tiger would mean more than jobs. It would also secure BAe's place in a European tri-nation project that would have lasting industrial benefits. UK ministers increasingly accept that joint European defence procurement to cut costs is the way forward. The French have told Britain to choose Tiger or be ostracised from further European defence projects.

Furthermore, choosing the American option will almost certainly end BAe's involvement in the Trigat missile, highly skilled jobs will be lost, and the company's place at the very heart of defence technology threatened. Maybe the Government wants to promote Westland as a national champion for helicopters. But given that Westland's role will be to act as an assembly plant, even this argument is thin. It will be interesting to see what justifications are used if Westland wins.