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LOCKHEED PULLS AHEAD IN HELICOPTER BATTLE

LOCKHEED TEAM PULLS AHEAD IN PRESIDENTIAL HELICOPTER BATTLE

19 Oct 04. The FT reported that John Kerry, the Democratic presidential nominee, regularly reminds voters that President George W. Bush has not done enough to protect US jobs from moving overseas. Should Mr Kerry be elected president, however, he may end up being flown around in a helicopter partly made by Europeans.

While Mr Kerry and Mr Bush frantically campaign in the final two weeks before the November 2 election, two defence companies are campaigning with equal intensity for a prestigious contract to build 23 new helicopters for the president. The competition to build Marine One – the name given to helicopters that fly the president – pits Sikorksy against Lockheed Martin and AgustaWestland, Lockheed’s European partner.

The Marine One competition mirrors some of the arguments made by the presidential candidates. In what could be a stock line on outsourcing from a Kerry stump speech, Sikorsky argues that awarding the contract to the Lockheed consortium would erode the US manufacturing base for helicopters.

The battle between Sikorsky and Lockheed/AgustaWestland has played out in the newspapers: Connecticut-based Sikorsky has taken out a series of advertisements in the Washington Post, touting the “All American” team for its VH-92 chopper. The battle has also hit Capitol Hill, where Congress debated its own “Buy America” legislation. Earlier this month, Senate negotiators defeated an attempt by Duncan Hunter, chairman of the House armed services committee, to pass legislation that would have prohibited US companies from buying defence equipment from companies in countries that demand so-called “offsetting” contracts in return for buying from the US.

Sikorksy, which built the existing fleet of Marine One helicopters, denies it is playing the patriotic card. Instead, it argues that allowing non-US companies to build vital components such as rotor blades compromises the president’s security.

“The way Sikorsky has emphasised national origin over price and performance kind of leads one to the conclusion that it doesn’t expect to prevail on the basis of merit,” says Loren Thompson, an analyst at the Lexington Institute think-tank. “It would be different if it was a French helicopter, it would be different if it was a Russian or Chinese helicopter, but we are talking about a helicopter that is a joint effort by the US and two of its closest allies,” he says.

Lockheed says 35 per cent of its US101 helicopter – which will be a modified version of AgustaWestland’s EH101 – will be built in Europe and brought to the US for assembly. The company also rejects Sikorksy’s assertion that it cannot meet the security requirements necessary for aircraft that fly the president. Steve Ramsey, US101 vice-president at Lockheed, points out that Air Force One – the Boeing 747 that flies the president – has many foreign components. Lockheed also says that even the General Electric engine that Sikorksy plans to use contains foreign-built components. Sikorsky, in return, argues that Lockheed/AgustaWestland are building “vital” components abroad.

“On the merits, the US101 prevails,” says Mr Thompson. “It has more internal volume, has more lift, has more safety margin, has more range, and it has more operational experience.

“The VH-92 is a relatively new aircraft with a relatively new engine and it will be some time before we can know whether it fully lives up to the promises of the people who make it.”

While Sikorksy emphasises the negative implications of awarding the Lockheed proposal – such as exporting jobs to the UK and Italy – Lockheed argues that the US will benefit in other ways.

“The US taxpayer is going to have a great advantage in getting this off-the-shelf helicopter already paid for and developed by Europe,” said Mr Ramsey.

“US taxpayers ar

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