I read this too:
Sikorsky Helped Engineer it's own defeat
Sikorsky Helped Engineer Its Defeat
February 6, 2005
As Sikorsky Aircraft reflects on its failed, all-American bid to keep the presidential helicopter contract, it may be haunted by events that happened 15 years ago, fully known to only a handful of people.
Between 1987 and 1991, Sikorsky quietly sent high-level engineers and executives to England to help refine and market a machine known as EH101 that the Brits were building with Italian partners. The helicopter effort was struggling, and the globally expansive Sikorsky owned a piece of the British company, Westland.
EH101 eventually made it off the ground. Its latest version, US101, stunned the defense world Jan. 28, when the U.S. Navy picked it as the next Marine One, the flying Oval Office. Sikorsky, holder of that prestigious contract since the Eisenhower administration, had touted its made-in-America entrant.
Sikorsky's aid to the company that beat it out was hardly isolated. The Stratford-based division of United Technologies Corp. had, in fact, nurtured Westland Helicopters for four decades before 1987. Sikorsky sent Westland sensitive technology, licensed it to build Sikorsky helicopters by the hundreds and, in 1986, bailed out the nearly bankrupt Westland in a deal that almost toppled Prime Minister Margaret Thatcher.
But Sikorsky's work on the EH101 took it beyond finance and manufacturing technology, into hands-on development of a helicopter that Sikorsky was not even a partner in building. One ranking engineer, Sikorsky's director of systems integration, was assigned in May 1987 to the EH101 in Yeovil, England - a posting with no certain end-date.
He set up a testing program to identify problems in bringing the EH101's many systems together. He stayed four years, during which he called in experts from Stratford as needed. Separately, Sikorsky executives coached Westland in crafting marketing plans for the EH101.
There is no public record of Sikorsky's EH101 involvement, but the former managers confirmed and described their roles.
"I asked some of Sikorsky's key people, and I mean super-key people, to come over and make suggestions," said the systems integration director, now retired and living in northwest Connecticut, who asked that his name not be used.
Sikorsky had also licensed manufacturing to Agusta, the Italian partner in EH101, as part of its worldwide reach. Agusta, like Westland, gained valuable experience, and built on it.
"We create our competitor and the competitor comes back to eat our business," said longtime aerospace industry analyst Mark Bobbi.
Aside from the irony, the story makes it clear that the industry pioneered by Russian-born Igor Sikorsky is irreversibly, undeniably, international. The linked histories of helicopter companies around the world show that Sikorsky's made-in-U.S.A. campaign - and especially the nationalist moaning on the floors of Congress and Sikorsky's plant - is all the more out of place.
Sikorsky's entrant in the Marine One competition, VH-92, was a variation on the S-92, a whirlybird that not only has parts made overseas, but is a triumph of global cooperation. The S-92's nose section and cockpit were made in Taiwan, cabin interior in Spain, cabin structure in Japan and crucial tail parts in China.
"I don't think there's a single defense end-product that's made entirely in America," said Gordon Adams, a professor at George Washington University and former Clinton administration budget official responsible for international affairs.
Forcing an all-American creation, he said, "is just not credible as a business decision."
UTC and its chief executive, George David, pushed the all-American angle on the grounds that it was needed to meet the phenomenal security and safety requirements of Marine One - rather than as part of the nationalist, protectionist movement that David correctly, ardently opposes. David has been for years one of the nation's leaders in espousing global manufacturing.
But, politics being politics, the company came close to crossing the nationalist line if it didn't do so, and made little effort to rein in supporters who did.
In a twist on the irony, Sikorsky's involvement with overseas manufacturers stemmed partly from foreign nations' zeal to protect their homegrown industries. If you want to sell equipment here, they argued, make it over here - or better yet, let us make it for you.
In the case of Westland, the partnership started in 1947, when the industry was in its childhood. By 1967, the companies celebrated 20 years of friendship at a Stratford ceremony during which the Westland CEO called Sikorsky a key factor in Westland's European prominence. By then, Westland had built some 900 Sikorsky flying machines, including the S-61 - a variant of which is Marine One today.
In 1986, Sikorsky's purchase of 14.9 percent of a reeling Westland came amid howls in Great Britain about the loss of European self-direction in aerospace. Thatcher's defense secretary quit amid the hubbub, but as part of the deal, Westland gained more outsourced work and U.S. State Department approvals to receive sensitive Sikorsky Black Hawk secrets. It was during the Black Hawk exchange that the EH101 was developed, in the same Yeovil, England, complex.
Harry Gray, former UTC chairman and chief executive, recalls that the U.S. Defense Department wanted the Black Hawk technology transfer to happen, as it had earlier, with transfer of the F-16 fighter jet to Belgium.
"At that time that was the goal of the Department of Defense, to get common armaments," Gray said.
Gray, at 85, is still close enough to Sikorsky that he took a spin in the VH-92 two months ago in Florida, actually piloting it himself for 18 minutes. He raved about it and about Sikorsky's pre-eminence. In the broad sweep of development leading up to the EH101, Gray said, "The parent technology came out of Sikorsky."
Westland and Agusta may have learned how to make large helicopters from the Sikorsky model, but the EH101 design was theirs, with a prototype finished by 1987.
"They're a good house. I would never denigrate Westland engineering," said the systems integration director.
"Westland Helicopters has a pretty glorious history on its own," said analyst Richard Aboulafia.
The development challenge with the 101 was not poor engineering, but the melding of Italian and British cultures, with no one in charge of making sure the navigation, weapons, airframe and flight systems all came together smoothly.
By 1991 Agusta and Westland brought in a private U.S company to manage systems integration. It was IBM, the same company that had learned helicoptering in the 1970s, on the SH60B Seahawk, the Navy version of the Black Hawk. As it happened, the same Sikorsky manager dispatched to Yeovil had been the engineering manager overseeing the Seahawk.
And in yet another global tie-in, the current owner of that IBM business is Lockheed Martin, based in Owego, N.Y. - U.S. partner in the US101, the American version.
Sikorsky sold its stake in Westland in 1994 at a large profit.
Relations between Sikorsky and AgustaWestland, as the joint company is now known, grew strained only recently, industry analyst David Lawrence of Fairfield said, "when they decided to push the EH101 in the States."
Asked to comment on the long ties between the companies, Sikorsky spokesman Ed Steadham called it "the nature of the industry."
"At various times you have corporate entities that compete like crazy on one project, and then they cooperate," he said."
Added UTC spokesman Peter Murphy: "A lot has changed over these 10 years."
If anything, the global helicopter industry is all the more linked. Maybe from now on the nationalist charade will end, now that the most security-sensitive vehicle on Earth will have crucial parts - not to mention its design - from outside the homeland.
We expect protectionism from our elected officials, and they don't disappoint. On Tuesday, Rep. Rosa DeLauro, D-3rd District, introduced a bill in the U.S. House that would force the Navy to buy Marine One copters "that are wholly manufactured in the United States," effective January 2005.
The bill will die in the House chamber.
Make no mistake, we in Connecticut shouldn't be glad Sikorsky lost. It would be a shame, and it's worth fighting, if US101 won the bid as a payback to Great Britain and Italy for their support in Iraq.
As Sikorsky sells the military version of the S-92, it will be interesting to see whether the company uses its foreign suppliers for its all-American team.
Political efforts to push for an all-American Marine One may have even hurt Sikorsky's chances, analyst Aboulafia said, as the Pentagon felt pressure to prove to allies that the nationalist pressure did not dictate politics.
"It's a global world and Sikorsky had been living it until it was `all-American,'" said Aboulafia, of the Teal Group in Virginia. "This is a company founded by a man who trained in czarist Russia and Paris. So in a sense, this was a global company from day one."
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