Even as Sikorsky Aircraft Corp. awaits word on a coveted contract with Turkey for as much as $8 billion, the swooning economy appeared to have finally caught up with the helicopter manufacturer”™s commercial business with multiple customers deferring planned purchases.
As reported by the Fairfield County Business Journal last month, Sikorsky now has more than 9,200 employees at its Stratford headquarters and surrounding facilities, up from previous reports of 8,300 workers and cementing its status as the largest employer in Fairfield County. Hartford-based United Technologies Corp. is the largest employer in Connecticut.
Sikorsky has been growing elsewhere as well ”“ the company reportedly added more than 350 workers in South Florida last year, bringing its headcount there to nearly 900. And Sikorsky has been expanding in Poland, where it is manufacturing a version of its Black Hawk military helicopter for sale to foreign governments.
As part of a contract for some 115 helicopters, Turkey wants the winning bidder to build production capacity in that country. Sikorsky and AgustaWestland are the two finalists for the contract, which could provide a boon even as the U.S. government considers cuts in its own military spending. AgustaWestland last month unveiled a mock-up of its candidate helicopter at the International Defense Industry Fair in Istanbul.
Last month, Bethesda, Md.-based Lockheed Martin Corp. announced it is cutting 225 jobs in Owego, N.Y. after the Pentagon announced plans to kill the $13 billion VH-71 presidential helicopter program, for which Lockheed Martin beat out Sikorsky only to fall behind schedule and budget. Lockheed Martin provides some subcontract services for Sikorsky at the Owego plant.
In the first quarter, Sikorsky earned $116 million on $1.3 billion in revenue, with sales up more than $300 million from a year earlier. The company shipped 38 military helicopters during the quarter and 11 for commercial use. Sikorsky contractor LMI Aerospace told investors it expects Sikorsky volumes to increase 20 percent in each of the next two years.
The manufacturer”™s profits included $20 million in bonus payments for union members, after Sikorsky reached a five-year labor agreement.
UTC revenue, meanwhile, dropped by $1.7 billion to $12.3 million total, with none of UTC”™s five other divisions posting a year-over-year increase.
Despite Sikorsky”™s continued stellar results in a down economy, UTC”™s chief financial officer Gregory Hayes and strategy chief Akhil Johri told investors in a conference call that the company is beginning to see evidence of weakness in Sikorsky”™s commercial business.
“We ”¦ saw a significantly lower level of customer advances due to lower commercial order intake at Sikorsky,” Hayes said. “We had a couple of contracts that were deferred on the commercial side, but no cancellations.”
Johri said Sikorsky did not record any orders from commercial customers during the quarter, but said that could have been a blip on the radar. Last week, Sikorsky announced it delivered six of its S-300CBi training helicopters to Bristow Academy, a flight-training school in Titusville, Fla. The school now has more than 50 of the helicopters, which trace their lineage to Schweizer Aircraft Corp., a Horseheads, N.Y. company which Sikorsky acquired in 2005.
“I think as things stabilize and things change, hopefully, that will start to see some recovery,” Johri said.
