Fairfield County Business Journal On remote control
On remote control
Even as it announced a potentially huge contract with Taiwan and a new research focus on unmanned helicopters, Sikorsky Aircraft Corp. is zeroing in on a contract with Turkey that could push it to new heights.
Stratford-based Sikorsky expects to hear soon on whether Turkey will choose it or rival AgustaWestland to supply helicopters in what is expected to be a multibillion-dollar contract over several years – albeit one that could require Sikorsky to establish some assembly or maintenance capabilities within Turkey’s borders.
In seeking approval for a purchase of 60 Sikorsky Black Hawk helicopters in a contract worth $3.1 billion, Taiwan sought so-called offsets, a term used to describe the outsourcing of some non-sensitive work to companies within the borders of a country making such a purchase.
A Taiwan contract would also benefit Fairfield-based General Electric Co.’s GE Aviation plant in Lynn, Mass., which would build the engines.
“The key for us on the international Black Hawk is low-cost sourcing and low-cost manufacturing … in Poland,” said Greg Hayes, chief financial officer of Sikorsky parent United Technologies Corp., in a conference call with analysts late last month. “(Poland has) significantly lower costs obviously than Stratford, so we think there’s a huge market out there. The U.S. market, the European market is pretty well spoken for – but the international Black Hawk still (has) opportunities we think in Taiwan and Singapore.”
The Taiwan helicopter order is part of a larger, $6.4 billion defense purchase that includes Patriot antiballistic missiles from Massachusetts-based Raytheon Corp., and two Osprey-class mine-sweeping ships from Northrop Grumman Corp. In response, the government of China suspended military exchanges with the United States and promised other sanctions.
The proposed contract value is equal to nearly half of Sikorsky’s take for all 2009, a year in which it delivered 244 helicopters for $6.3 billion in revenue, up $1 billion from the year before. Even as many large Fairfield County employers made cuts in 2009, Sikorsky has mostly been maxing its Stratford work force of more than 9,000 employees.
In the fourth quarter, Sikorsky sales came up just short of the $2 billion sales mark, with its $1.95 billion up 22 percent from a year earlier and marking an all-time quarterly high for the Stratford-based manufacturer. Sikorsky shipped 87 helicopters between October and December, including 27 commercial helicopters.
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