Can Sikorsky handle it? - Westfair Communications

Sikorsky Aircraft Corp. cleared $1 billion in revenue for the second straight quarter, sustaining a record-setting sales streak, even as the U.S. Air Force allows the company to submit a new bid on a $15 billion contract it lost to a rival.

In the first quarter of 2007, the company cleared the sales mark by $6 million, about the cost of one of its UH-60 Black Hawk helicopters used by the military to ferry troops, down slightly from the fourth quarter last year.

In a conference call with analysts, executives at parent company United Technologies Corp. indicated Sikorsky sold 36 helicopters in the first quarter, and would increase its pace of shipments as it continues to recover from a six-week strike more than a year ago.

Given production problems caused by the strike and increased sales, Sikorsky”™s loss of a $6.5 billion contract last year may have been a blessing in disguise.

Lockheed Martin Corp. won the U.S. Navy contract to furnish the White House with a new helicopter fleet. The Government Accountability Office (GOA) has already criticized the performance of Lockheed Martin”™s European partners, however, saying the first five VH-91 helicopters being built in Europe are heavier than advertised, and adding the program is showing early signs of running over budget.

The next five helicopters are scheduled to be manufactured in the United States.

Lockheed Martin spokesman Mike Drake referred a request for comment on the progress of the VH-71 program to the U.S. Navy, the contracting agency.

“Since (its) inception, the VH-71 program has encountered significant challenges attributable to the accelerated schedule,” said Stephanie Vendrasco, a Navy spokeswoman. “Lockheed Martin has made good progress over the past six months to overcome obstacles that naturally result from a program that was behind schedule before the ink was dry on the contract.”

The Lockheed Martin team”™s early problems apparently helped doom its initial bid for a $15 billion contract to provide the U.S. Air Force with 140 search-and-rescue helicopters.

After Boeing beat out Lockheed Martin and Sikorsky for the contract early this year, GAO upheld part of the losing bidders”™ subsequent protest, and recommended the Air Force rebid the contract. Last week, the Air Force said it would reopen the bidding process in May.

Of the initial award specifics made public by the Air Force, the Boeing bid was bested by the Sikorsky and Lockheed Martin versions only in the probable life-cycle costs of the aircraft, which the Air Force indicated did not provide a great deal of weight in its decision, and in product support.

The Air Force classified Boeing”™s helicopter as exceptional for performance, particularly in the areas of mission load and occupant protection; Sikorsky received acceptable grades.

The Air Force also had worries about the Lockheed Martin team due to a high risk rating on an unspecified performance issue.

At that point, Sikorsky was already putting out its own fires, after scathing criticism last winter from a Pentagon oversight group that warned Sikorsky to get its own production lines up to snuff.

Sikorsky did not make an executive available for an interview on how the company would accommodate the production demands of a big program like VH-71 or CSAR-X, and spokesman Paul Jackson had no comment.

Even as Sikorsky awaits word this summer on its protest, it may have emerged as the front-runner over Textron Corp.”™s Bell Helicopter unit to furnish Taiwan with 90 utility helicopters worth $4.2 billion, according to a report this month in China Times.

For U.S. military programs already under way, Sikorsky”™s next major milestone is a design review in two years of its CH-53K helicopter. The Navy is spending $15 billion on 156 choppers to ferry vehicles and equipment from ships to locations deep inland. Because of increased wear on existing helicopters caused by current war operations, the Navy has stepped up its initial procurement schedule, with a limited run of 29 helicopters scheduled to begin in 2012, with production lasting a decade.

Sikorsky is still developing three critical components of the project involving the rotors and main gearbox. The helicopter”™s rotor blades are 6 percent longer than normal, requiring adjustments to a mechanism that reduces vibrations.