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U.K. Ministry of Defence Awards Rolls-Royce $1.2 Billion in Sub Work

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Earlier this week, the United Kingdom Ministry of Defence awarded Rolls-Royce a 10-year contract worth $1.24 billion to produce and service nuclear propulsion systems for the Royal Navy's Astute-class fast-attack submarines and Successor-class ballistic missile submarines.

In exchange for giving Rolls the security of a 10-year contract for the work, the ministry hopes to cut as much as $310 million from the cost of its submarine enterprise performance program. It may also help save British jobs.

Minister for Defence Equipment, Support. and Technology Philip Dunne noted in a press release that the contract is expected to "help sustain around, 2,000 jobs while also providing a better deal for the taxpayer and ensuring our future plans remain affordable."

None of the seven Astute-class submarines, currently in various stages of construction, have yet entered operational service in the Royal Navy. The first of the line, HMS Astute, is expected to begin operational service this year. As for the Successor class, those subs are not expected to enter into service until 2028.

Both classes of submarines are being built by British defense contracting giant BAE Systems.

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Rich Smith

I like things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.

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