US Congress: Eurocopter takes big hit in industry hearing (merged)

[Chuck K]

A U.S. House committee has scheduled hearings beginning today to look into the state of the helicopter industrial base, and more specifically it’s ability to respond to demands from homeland defence requirements.

The hearings will be under the control of Rep. Curt Weldon, Republican deputy chairman of the House Armed Services Committee, and a strong supporter of the industry. Weldon includes Boeing’s Philadelphia facility in his constituency.

A list of people scheduled to testify includes Dean Borgman from Sikorsky, Roger Krone from Boeing and John Murphey of Bell. Other participants will be from NASA, the Army and Navy (NAVAIR) and others organisations, including AHS.

Concern has been expressed for over at least the past two years about the lack of government involvement in rotorcraft R&D, seen as in precipitous decline even as the European research base grows.

The level of funding that should be flowed to NASA to back such activities will be a subject of the hearings, but Weldon is known to be anxious about homeland security concerns and the role helicopters can play as a resource for first responders and other entities.

This is the second initiative to have appeared from Congress this year. Earlier a bipartisan, bicameral bill aimed at promoting aeronautics R&D (backed by Sen Christopher Dodd (D) and Rep. George Hanson (R)) was introduced. This too promises to boost NASA funding at increased levels. AHS Executive Director Rhett Flater said he was writing to both groups to ensure co-ordination moving forward.

The Congressional interest - the first to be centered on the rotorcraft base that anyone can remember since 1993 - is seen as an important chance to focus government concern about loss of competitive ability in the U.S. industry.

Last week, a trade group, AIA, announced that overall aerospace employment had dropped to its lowest level in 50 years.

The Weldon hearings are set to begin at 5 pm today in the Rayburn Office Bldg, Rm 2118.

Further information an be obtained from AHS (703) 684 6777.

I guess time will tell if talk turns into action.

[Heliport]

Regarding the state of the industry, this article from the Connecticut Post last week was reproduced on CNN's MoneyPage Honeywell International, a major aerospace manufacturer, said purchases by police and emergency medical agencies will dominate a large share of the national helicopter market over the next five years, but local officials are saying the economy may delay those purchases.
Honeywell on Thursday released the results of a five-year study that indicates police and medical agencies will account for 40 percent of all helicopter purchases over the next five years.

There is room for more police helicopters in Connecticut's skies, but officials said on Thursday there are no plans to purchase any right now.
In Connecticut, the only police helicopter in the state is owned and operated by the State Police.
Sgt. Paul Vance, spokesman for the state police, said the helicopter is just over two years old and is used by both local and state police on a regular basis. He said there does seem to be a need for another one.

"Fiscally we have to be very responsible," Vance said. Given the state's current fiscal crisis, Vance said, a helicopter isn't a big priority, but if funds became available, Connecticut police could use one.

Although there is an apparent need for more police helicopters in the state, Stratford-based Sikorsky Aircraft may not see any big sales. Sikorsky rival Bell Helicopters of Texas manufactured the state police's helicopter.

Sheena Steiner, a spokeswoman for Sikorsky, said she hadn't seen the survey results and couldn't comment directly on it. According to Steiner, the heavily armed Black Hawk attack helicopter accounts for the bulk of Sikorsky's sales to homeland defense agencies.
Honeywell's survey predicts that corporate sales of helicopters will drop off, but long-range prospects around the world appear to be favorable.

This in part matches Sikorsky's own for the civilian market. The company began in February to rehire some of the employees it cut from the payroll in 2002. However, the company has said it expects actual production to be down in 2003 when compared to 2002. Overall, the company is banking that 2004 will signal the beginning of better times.

The Honeywell survey indicates that significant helicopter sales won't materialize until 2005.

Despite the gloomy report that corporate sales will be down in 2003, Sikorsky just landed its largest corporate order for helicopters in 20 years. An oil company ordered 15 S-76's in February. A single S-76 usually sells for $8 million, but the company would not say how much its deal was worth.

Honeywell is also forecasting that health care organizations will require more helicopters over the next five years, and on this front Sikorsky appears to be well positioned.

The S-76, already a popular helicopter with corporations, is also in use all over the world by hospitals for transporting patients from accident scenes.

Honeywell found that intermediate and heavy helicopters for logging and oil operations will dominate the Asian, African and Middle Eastern markets in the next five years. Sikorsky has several models available for this market including its newest helicopter, the S-92, for which there are already five firm orders.

[Bronx]

A focus on Eurocopter’s penetration of US govermment markets threatened to dominate a Congressional hearing held to identify ways to stimulate the US rotorcraft industry.
The critical tone of remarks directed against “the French” - (shorthand throughout the session for Eurocopter) was laid down by Bell Chairman John Murphey.
He told the U.S. House Armed Services Committee’s Tactical Air Land Subcommittee that with 75 percent of various U.S. security-related government markets going to the European manufacturer, an unfair playing field has been created.
‘Imagine us ever getting a French government order over there. It just wouldn’t happen,’ he said in testimony before the subcommittee.
Despite the abundance of French bashing that seemed to mark the tone of the proceedings, the hearings achieved much, however.
The session was well run, the testimony brief and to the point, the questioning likewise. Over 70 industry, armed services and media representatives attended what Weldon called a first meeting of its kind,’ amid agreed concern about drift in the US helicopter base.

Discussion ranged widely, the objectives summed up best by AHS Executive Director Rhett Flater who said it was basically a wake up call to the US Government about its failing helicopter R&D responsibilities.
‘We need to revitalise research in the 6.1, 6.2 and 6.3 levels’ he said, referring to basic, applied and advanced research funding protocols attached to federal research budgets, principally in this case the Army’s.
He criticised in particular a recent veering off towards UAV research by the U.S. Army. ‘It’s crowding out work that should be done on manned (ie helicopter) systems,’ he suggested.

The hearing surfaced long-standing manufacturer concerns that the US Munitions List inhibits sales by unnecessarily counting civilian versions of military helicopters as banned items.
Roger Krone of Boeing and Sikorsky President Dean Borgman both outlined problems they’ve faced on this in China. ‘They’re limitations put on us that foreign companies don’t face, ‘ Borgman emphasised.

And there was a a spirited discussion of an old chestnut - how to ensure long term project funding in DoD budgets. A call for some kind of capital fund - money put aside and safe from operations and support cost mingling - came up in discussion.
And all had suggestions calling for the creation of some kind of joint collaborative R&D center.
Bell’s Murphey indicated the amount of money needed to prime the pump for such an effort could run as much as $100-million a year - over five years.
For his part Weldon pledged to ‘move forward’ with the Munitions List issue, and asked AHS to co-ordinate a helicopter industry-wide look at the capital funding concept.

Many of the issues about R&D neglect were well chosen and surfaced to an interested reception by the committee members (who sadly dwindled down to three, including the chairman by the time the late session ended).

But the key to progress is Weldon himself, a hard charger who is also deputy chairman of the House Armed Services Committee.

Weldon’s a longtime supporter of the industry generally (Boeing Helicopters is in his constituency), and an acknowledged supporter of the US industrial base.

The latter committed himself several times to changing the status quo after what he’d heard - essentially a matter of opening up the federal R&D check book (through NASA), revitalising research facilities and wind tunnels, and finding ways to incubate innovative the technology base across the industry.

The needs of Homeland Security, he said, require action to re-build the helicopter base.

Whether that aid comes this year, next, or in the future was not clear.

There are other Congressional actions on R&D funds in the wings, and NASA is said to be moving towards re-prioritising its aeronautics issues in the wake if the Columbia crash.

The agency hasn’t spent a penny on the helicopter industry for the past three years, the committee heard.

And ‘the French’ issue?
Perhaps nobody should be surprised Eurocopter was an easy target - particularly in an establishment that took French fries off the canteen menu and re-named them Freedom fries because of the situation on the UN Security Council vis a vis Iraq.
However, it was not hard to find attendees who saw the rhetoric as the start of a more serious backlash which Eurocopter executives in the U.S might want to take note of.
Weldon for one seems particularly enthusiastic about busting up what he perceives to be unfairly won market penetration (the unfairness springing from the level of French government support the company gets both in R&D and sales subsidies - predatory pricing).
Trouble is the industrialisation of the helicopter business means more than just ‘the French’ are involved in cross-border deals.
Bell itself is a potential candidate for a big international sub-contracting order - to make the EH-101 in the US if it finds a market here.
Asked if he would reject such a role, Murphey shook his head. ‘No. That would be dumb, of course it would,’ he told Rotorhub.com in an short interview afterwards.
‘What I’m trying to say is that the US is losing its primacy. Let’s put that back together. That’s preferable to being someone else’s sub-contractor. You bet it is.’ [/quote]

[widgeon]

It is not too surprising that you lose market share if you do not offer any thing new. Eurocopter has delivered in the last ten years or so 2 completely new models ( EC135 and EC120) , 4 major upgrades ( EC145 , EC155 , EC130 and EC635 ( not sure of last number) While Agusta has the AB139 and the A119. In the same period bell has civilanalized the OH58 and poured it'remaining R and D money into the Tilt Rotor .MD ( A foreign company in bell's eyes ) has the Explorer and Sikorsky the S92 . That beeing said I can see a significant backlash in the near future against the success of the Euro manufacturers . political presssure will force public agencies to accept US made solutions.

[Steve76]

What about the AB139 and the S92?

[B Sousa]

Bell helicopters should be crying the blues for their own mismanagment. When the surplus program first came out there was a big cry as to cutting into aircraft sales by donating surplus military aircraft. Hundreds were turned out to local Law Enforcement for free.
However, literally tons of spare parts and Aircraft were destroyed and I suspect because of pressure from Bell. That was taxpayer money that could have been used much better than scrap metal.
Now that a lot of those Law Enforcement agencies have been operating for a period and have found the true value of Helicopter support in their daily activities, they are slowly getting rid of the Military surplus and buyin NEW aircraft. Guess who they are buying them from. Eurocopter is the Helicopter of choice for most.
I still think that Bell stepped on theirs when they didnt come right out and support the Surplus program.
As to the tilt rotor, Im sure it will come to pass eventually, but its new technology, so remember never fly an A model of anything.
Also on similar matters, look around to other industries and where do they get their tools. Coast Guard flying Dauphines. Police riding Honda, BMW motorcyles. Streching it even farther. How many U.S. registered ships do you see?? When working in the caribbean I notice most all of the high rent Yachts are flagged in the Grand Caymans.......
All this has got to say that the Government had better wake up and restructure a bit. They have a strong tendancy to chase away their own.

[Heliport]

http://www.house.gov/hasc/image/sub_header.gif

Links to the text of some statements to the HASC Hearing:

Boeing (http://www.house.gov/hasc/openingstatementsandpressreleases/108thcongress/03-03-12krone.html)

US Army (http://www.house.gov/hasc/openingstatementsandpressreleases/108thcongress/03-03-12bergantz.html)

US Navy (http://www.house.gov/hasc/openingstatementsandpressreleases/108thcongress/03-03-12kilcline.html)

Sikorsky (http://www.house.gov/hasc/openingstatementsandpressreleases/108thcongress/03-03-12borgman.html)

[Shawn Coyle]

To their credit, Bell has come out with Bel 407, which was one of the first single engine machines with FADEC, the Bell 430 with the fiber-composite rotor head, and the Bell 427.
While these may have looked like adaptations of the old technology, they most assuredly were new designs. Unfortunately, for the 427, there were a lot of decisions made that, in retrospect weren't the right ones. But there was some innovation.

[HeliMark]

One thing that Bell and MD (Hughes) have failed to recognize is that their product is small. Eurocopter saw that the police departments, and air tour industry are looking for a bigger single engine airframe. The technology that we are expected to carry now in them are limiting, due to wieght and size, the abillity to work in the current airframes.

The Eurocopter models are far more comfortable then a 407 or 500. No matter how you package them.

What the Companies should be doing is slapping themselves upside the head for being so dumb. As far as I can see, they are trying to get Congress to save their behind for their lack of planning.

[Dave Jackson]

The following are two excerpts from the statements to the HASC Hearing.
IMHO they convey two surpassingly different attitudes towards the future of rotorcraft.


Boeing:

" ... the critical question is whether we can deliver on the promise of these and other new advanced rotorcraft concepts. Looking at the track record so far, the odds would seem to be less than favorable. For several years, the focus has been largely on extending the life of existing platforms rather than the development and production of new-build aircraft. It’s been on incremental, evolutionary improvements rather than innovative, revolutionary new designs...

... While we obviously are concerned about the health of current rotorcraft programs, we’re even more concerned about the future, and where the industry as a whole will be in ten, twenty or thirty years’ time. Will the technology be there when we need it? Will the infrastructure be there? Will we have the people in place with the right skills to deliver the new products we’ll need in the future? And will there be a robust supplier base to support the industry? ...

... The question is: “How long can we continue down this path?”



Sikorsky:

"Our founder, Igor Sikorsky, designed, built and flew the world’s first practical helicopter, the VS-300, and we have the privilege of continuing his legacy today."

An unfortunate legacy, considering that the VS-300 made its first free flight on 13 May 1940, whereas the German Focke-Achgelis Fa-61 had already set a number of world's records back in 1937.

[407 Driver]

HeliMark, you wrote..

"The Eurocopter models are far more comfortable then a 407 or 500. No matter how you package them..."

I beg to differ on that statement. I find the 407 a very comfortable aircraft. Have you actually worked a 407 to make this observation? What parameters are you considering before making this blanket statement?

Personally, I find the 350 series very uncomfortable. The Skids are placed far aft, bush utility work is more difficult, ,longlining is more difficult, the collective placement is uncomfortable (for me)Wx visibility is more difficult, The aircraft is much more prone to ground resonace problems, the aircraft is more difficult to keep smooth, (those tuneable hammers???what's that all about?)

Need I go on?

It's unfortunate that Bell has to go to Congress to protect their USA and North American markets, but I for one do feel that Bell has good safe products, and I am personllay proud to be flying a north american aircraft.

[B Sousa]

I have to agree with some of the above. I am again flying an AS-350. Its good for tours. I have been flying Bell products for over thirty years and recently had the occasion to get a few hours in the B407. It is one sweet machine....

[HeliMark]

Okay, let me qualify my statements for missions I do.

A FLIR screen, FLIR controller, keyboard for the moving map, Light controller, kneeboard, and a big fat map book in my partners lap who is sitting next to me. And my partner has to write, work all the equipment and twist sidewards. In a 500 it is workable, in a 407 it is not, or with very limited room. I have flown with the Bell test pilot when we were comparing helicopters for replacements. For me the room up front was too small and it was an effort to not get in the way of the pilot during situations that we set up to simulate our normal missions.

We do not have the luxury of a third person on board inorder to put some of that stuff in the back, so a very important part of our decision was room up front. And that is where the American companies are having a problem.

I am not going to say which is the best machine. Every mission has a different need. And that need changes as time goes on. But look at what is happening and you will find out that law enforcement is going away from the Bell. Not because it is a bad machine, it is a great machine, just the airframe needs some updating for us.

And yes, I agree that the way the skids are on the 350, it is more difficult to work. But then I could say I have placed people in far smaller places, steep hills, mountain ledges in a 500 that any Bell or Eurocopter would dream of doing.

So the likes, dislikes, and debates of people who love their machines goes on.

My original point was to say that the American helicopter companies are acting just like the auto companies did in the 70's when they thought everyone sang to their tune. And got a reality check that hurt.

[B Sousa]

Helimark. I see your frustration. As with most Law Enforcement agencies, they have a bigger budget than gross weight allows. I do recall the CHP losing an L3 many years ago, due to Hot, High and Heavy. You see where LASD went when they replaced Helos. Jim D. has been a Bell and MD man for years. You know what they are flying now.
I would also put your thoughts on the ALEA Forum, you might get some good respnses. www.ALEA.ORG

[HeliMark]

Unfortunately the reasons for needing and going to a bigger airframe is old hat. American law enforcement is just starting to carry the equipment that law enforcement in Europe does. And the bigger airframe of a twin engine for now is out of the question.

The American companies have just failed to see this. And I am very proud to be flying an American product, but there are no American product to replace them with. And I just read last week that Bell has stopped the JFX (not sure that is the correct program name) that was to have a wider body.

CHP is replacing their 206's with AS350B3's for the room and hot/high problems. LASD is going with the 350B2's for the room and hot/high performance. And I could name 3 other agencies for the very same reasons just in California.