Canada: Cormorant & Cyclone thread
MHP
One of the things Mr. Maurer said was that the major obstacle was the mission system software development, verification and validation. My recollection is that mission systems development was outsourced to General Dynamics Canada, and that there wasn't any choice in the matter. That is a pretty dated recollection, and subject to correction by someone who has more current information. If true, however, it certainly explains a lot of things.
Contractors and sub-contractors blaming each other for the delays --- surely not
MHP
"Surely not".
On point, Crab. Doing "offset" can be risky business. In this case, it seems both entities own some of the problem. SA/UTC bought Claverham for the fly by wire servos, and that has been a long, long tale of trouble, while the contract offset needs brought GDC into the picture, and as Maurer stated, they still haven't delivered. Neither side, both being vulnerable, is motivated to wash all the laundry in public, so a negotiated outcome makes sense. Just my out of touch observation.
By the way, there is one other aspect of this program that struck me as I looked at the photo of the MHP in the link. Can't comment on this because I just don't know the history, but all of that claptrap on the outside made me wonder about mission creep and associated weight growth. Perhaps there is a bit of that involved as well.
On point, Crab. Doing "offset" can be risky business. In this case, it seems both entities own some of the problem. SA/UTC bought Claverham for the fly by wire servos, and that has been a long, long tale of trouble, while the contract offset needs brought GDC into the picture, and as Maurer stated, they still haven't delivered. Neither side, both being vulnerable, is motivated to wash all the laundry in public, so a negotiated outcome makes sense. Just my out of touch observation.
By the way, there is one other aspect of this program that struck me as I looked at the photo of the MHP in the link. Can't comment on this because I just don't know the history, but all of that claptrap on the outside made me wonder about mission creep and associated weight growth. Perhaps there is a bit of that involved as well.
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JD
How is it the mission equipment results in the inability to fly at night or over water for simple training flights? These are core avionics issues!
I thought my post would finally quiet the crickets on this thread.
JD,
Not delivering aircraft helps the bottom line? At $200M apiece they should be rushing to deliver them. Any insight into this?
TC
How is it the mission equipment results in the inability to fly at night or over water for simple training flights? These are core avionics issues!
I thought my post would finally quiet the crickets on this thread.
JD,
Not delivering aircraft helps the bottom line? At $200M apiece they should be rushing to deliver them. Any insight into this?
TC
MHP
Sorry, but I don't have any knowledge about the night/over water story. Might be one of those situations where my choice of the word " story " turns out to be an accurate description.
On the second question, the story re the SA bottom line being better by not delivering aircraft seemed 180 out to me as well. I don't know the details of that contract, but typically, even with a contract that provides progress payments ( and I have no idea if this contract does that ), there is a huge amount of company money residing in those ready to deliver aircraft, and therefore justifiable reason to exert every effort to deliver and receive payment. Perhaps there will be some follow-up reporting that clarifies the issue.
On the second question, the story re the SA bottom line being better by not delivering aircraft seemed 180 out to me as well. I don't know the details of that contract, but typically, even with a contract that provides progress payments ( and I have no idea if this contract does that ), there is a huge amount of company money residing in those ready to deliver aircraft, and therefore justifiable reason to exert every effort to deliver and receive payment. Perhaps there will be some follow-up reporting that clarifies the issue.
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The reason why Sikorsky's profit line for the current year would not be as healthy with Cyclone delivery as it would be if Cyclone delivery is further delayed is because of the late delivery withhold along with Canada's continued reluctance to pony up the full development costs (ie. Cyclone NRE cost overrun) at time of delivery. If delivery occurs under the current terms, Sikorsky would be delivering aircraft to Canada at a loss. There is no late delivery penalty for being later than 300 days, so that penalty would have been maxed out long ago.... in other words, further delays come at no cost to the contractor.
One of the reasons there are extra bumps on the airframe is because all of the mission equipment called for in the original contract does not fit inside anything smaller than an AW101. There has been no mission creep, although the final weight has turned out to be much higher than Sikorsky said it would be back in 2004.
The overland and daytime in-sight-of-the-ground flight restrictions are related to safety/airworthiness issues for which reasons I only have scant info. My guess (speculation) based upon the little that I have been able to gather is that the restrictions are related to some unresolved fly-by-wire certification matters and also, the MGB reliability. I have been told that the initial poor reliability of the FBW servo actuators has been resolved and is no longer a concern.
Hope this helps to answer some questions.
One of the reasons there are extra bumps on the airframe is because all of the mission equipment called for in the original contract does not fit inside anything smaller than an AW101. There has been no mission creep, although the final weight has turned out to be much higher than Sikorsky said it would be back in 2004.
The overland and daytime in-sight-of-the-ground flight restrictions are related to safety/airworthiness issues for which reasons I only have scant info. My guess (speculation) based upon the little that I have been able to gather is that the restrictions are related to some unresolved fly-by-wire certification matters and also, the MGB reliability. I have been told that the initial poor reliability of the FBW servo actuators has been resolved and is no longer a concern.
Hope this helps to answer some questions.
there is a huge amount of company money residing in those ready to deliver aircraft, and therefore justifiable reason to exert every effort to deliver and receive payment
Dec 2006, "are you sure they're ready?" "Oh yes, they're finished," so 7 of us head BWN-SIN-EWR, drive to PA and..........you want us to accept what? So back home again. Even had the offer of the UT G-V to collect us after Christmas - and before the 31st - to accept them!
Jan 2007 BWN-SIN-EWR, drive to PA and.........accept 3 finished airframes, and back home awaiting their arrival in the 224.
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More news from Flight Global on the anticipated hit to Sikorsky's profit line when and if the Cyclones are finally turned over to the customer....
No resolution in sight for Canada's Sikorsky Cyclone saga
No resolution in sight for Canada's Sikorsky Cyclone saga
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Additional details from the UTX 3Q call:
Greg Hayes, CFO:
"I'd like to say we're making good progress. What we want here, and I said it before, we need a win-win on this with the Canadian government. Obviously, we're disappointed we haven't been able to deliver the helicopters. We're building them right now down at West Palm. We'd expected to build 5 -- build and deliver 5 this year, build and deliver 19 next year. We're well on our way for all those helicopters. But until we have an agreement with the Canadian government in terms of the final configuration and an interim configuration, we really can't ship anything. So as I sit here today, I tell you we don't have a solution. I certainly hope by the time Louis [Chênevert, UTC CEO] stands up in early December, we can give you guys some more clarity on it. But right now, all I know is that we need to continue to work with the Canadians to find a win-win here."
Jesus Malave, Director IR:
"We're ready to deliver the 5 aircraft. It's just a matter of letting this negotiation play out."
I/C
Greg Hayes, CFO:
"I'd like to say we're making good progress. What we want here, and I said it before, we need a win-win on this with the Canadian government. Obviously, we're disappointed we haven't been able to deliver the helicopters. We're building them right now down at West Palm. We'd expected to build 5 -- build and deliver 5 this year, build and deliver 19 next year. We're well on our way for all those helicopters. But until we have an agreement with the Canadian government in terms of the final configuration and an interim configuration, we really can't ship anything. So as I sit here today, I tell you we don't have a solution. I certainly hope by the time Louis [Chênevert, UTC CEO] stands up in early December, we can give you guys some more clarity on it. But right now, all I know is that we need to continue to work with the Canadians to find a win-win here."
Jesus Malave, Director IR:
"We're ready to deliver the 5 aircraft. It's just a matter of letting this negotiation play out."
I/C
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More info, this time from the UTC Q3 2012 SEC Filing that was published yesterday... the portion highlighted below is slightly more negative in tone than it was in the Q2 report.
26 October 2012:
As previously reported, Sikorsky is developing the CH-148 derivative of the H-92 helicopter, a military variant of the S-92 helicopter, for the Canadian government. The CH-148 is being developed under a fixed-price contract that provides for the development and production of 28 helicopters, and related logistical support through March 2028. The current contract value is estimated to be $4.5 billion, and is subject to changes in underlying variables such as future flight hours as well as fluctuations in foreign currency exchange rates. Sikorsky and the Canadian government have a number of open disputes relating to the contract, including responsibility for delay of delivery of the fully configured and tested aircraft beyond the current contract delivery schedule and other disputes relating to development, production and logistical support. Sikorsky is prepared to deliver aircraft in 2012 in a configuration that will require additional hardware and further software testing and upgrades before full mission capability can be achieved. Sikorsky intends to continue discussions with the Canadian government to resolve the open disputes, however, it is increasingly unlikely that the parties will reach a contractual solution that allows for delivery of these aircraft or revenue recognition in 2012. As discussions continue, the inability to achieve a satisfactory contractual solution could lead to a further negative financial impact on the program in the future.
26 October 2012:
As previously reported, Sikorsky is developing the CH-148 derivative of the H-92 helicopter, a military variant of the S-92 helicopter, for the Canadian government. The CH-148 is being developed under a fixed-price contract that provides for the development and production of 28 helicopters, and related logistical support through March 2028. The current contract value is estimated to be $4.5 billion, and is subject to changes in underlying variables such as future flight hours as well as fluctuations in foreign currency exchange rates. Sikorsky and the Canadian government have a number of open disputes relating to the contract, including responsibility for delay of delivery of the fully configured and tested aircraft beyond the current contract delivery schedule and other disputes relating to development, production and logistical support. Sikorsky is prepared to deliver aircraft in 2012 in a configuration that will require additional hardware and further software testing and upgrades before full mission capability can be achieved. Sikorsky intends to continue discussions with the Canadian government to resolve the open disputes, however, it is increasingly unlikely that the parties will reach a contractual solution that allows for delivery of these aircraft or revenue recognition in 2012. As discussions continue, the inability to achieve a satisfactory contractual solution could lead to a further negative financial impact on the program in the future.
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Last year at this time, UTC stated that it would deliver six interim Cyclones during 2012... none were delivered and there is still no airworthiness certification yet let alone any checklists, flight manual or training manuals.
This year UTC has stated that it will instead deliver eight interim Cyclones during 2013.
See story....
Delivery of Sea King replacement helicopters delayed once again
This year UTC has stated that it will instead deliver eight interim Cyclones during 2013.
See story....
Delivery of Sea King replacement helicopters delayed once again
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"Half competent"....will be taken as a compliment 
Latest from the Canadian press
Canadian Government Requires Sikorsky To Pay $8 Million In Damages For Late Delivery of Cyclone Helicopters
At least the Canadians got their Cormorants and the MGB of the AW101 has a proper 30 minute run dry time, not certified through a loop hole ("loss of transmissions oil extremely remote", or very similar wording) that was added to the certification criteria after it abysmally failed the test, only for the extremely remote bit to be subsequently proved wrong with a very unfortunate loss of life on the second occassion (after insufficient action was taken after the first). If the MGB of the CH-148 can't still pass the 'proper' 30 run dry time lets hope that the loss of transmissions oil is now less extremely remote than before, increased number of oil filter retaining steel studs aside.
Sorry for the rant (an unfortunate personal trait), it's just I'm more disappointed in the certifying authorities. No aircraft is without it's problems, we can easily get into a slanging match on the merits Vs. the problems of each aircraft in this type, but it shouldn't be something as serious as this. Also, it still upsets me to see the S92 being touted as the best thing since sliced bread and meeting the latest most stringent airworthiness stardards (but I guess that just marketing for you).
Latest from the Canadian press
Canadian Government Requires Sikorsky To Pay $8 Million In Damages For Late Delivery of Cyclone HelicoptersAt least the Canadians got their Cormorants and the MGB of the AW101 has a proper 30 minute run dry time, not certified through a loop hole ("loss of transmissions oil extremely remote", or very similar wording) that was added to the certification criteria after it abysmally failed the test, only for the extremely remote bit to be subsequently proved wrong with a very unfortunate loss of life on the second occassion (after insufficient action was taken after the first). If the MGB of the CH-148 can't still pass the 'proper' 30 run dry time lets hope that the loss of transmissions oil is now less extremely remote than before, increased number of oil filter retaining steel studs aside.
Sorry for the rant (an unfortunate personal trait), it's just I'm more disappointed in the certifying authorities. No aircraft is without it's problems, we can easily get into a slanging match on the merits Vs. the problems of each aircraft in this type, but it shouldn't be something as serious as this. Also, it still upsets me to see the S92 being touted as the best thing since sliced bread and meeting the latest most stringent airworthiness stardards (but I guess that just marketing for you).
Canada MHP Fine
Prior to retiring in 2005, I recall discussion ( in the Pilots Office, so you know the data is suspect! ) re the MHP contract and delivery penalties. My recollection is that they were pegged at $100,000US per day. That figure may have been contractually changed, of course, since that time. But if that figure remained in place, the current report citing the Canadian Government quoting the fine at $ 8,000,000US seems to imply recognition that non-SA factors were present.
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Those delays with the Cormorant introduction at Canada leads to Germany probably not being able to select the Cyclone as a desperately needed replacement for the Sea King MK41 and therefor having to settle for the not yet existing MH-90
I know they say there´s no bad PR, only PR, but this proves that wrong.
Thomas
I know they say there´s no bad PR, only PR, but this proves that wrong.
Thomas
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John,
The Canadian Government's willingness not to charge the C$100K/day penalty (initially up to a maximum of C$36 million, later C$88 mil) has been widely covered, the general feeling being that the reason for lack of enforcement was a desire to avoid the program being seen as failure. Democracy Watch has highlighted this issue of the fees being waived "to save face" on many occasions.
In January 2007, the Government announced that the initial delay to the program was due to the Teamsters strike at Sikorsky, which it decided was "an excusable delay" with the contract amended as a result.
In December 2008 the Government decided to give Sikorsky another two years to fix the program before penalties were applied.
In July 2010 the Government again decided to belay the contract penalty, choosing instead to temporarily withhold scheduled progress payments, with the grace period extended to 43 months.
In June the Government claimed that it had fined SAC C$8 mil for delays, with threats of a further C$80.6 mil in liquidated damages if delivery slips beyond July 2013, but based on Canada's track record it's unlikely the penalty will be levied. More likely some fluff about an enhanced support package or somesuch.
I/C
The Canadian Government's willingness not to charge the C$100K/day penalty (initially up to a maximum of C$36 million, later C$88 mil) has been widely covered, the general feeling being that the reason for lack of enforcement was a desire to avoid the program being seen as failure. Democracy Watch has highlighted this issue of the fees being waived "to save face" on many occasions.
In January 2007, the Government announced that the initial delay to the program was due to the Teamsters strike at Sikorsky, which it decided was "an excusable delay" with the contract amended as a result.
In December 2008 the Government decided to give Sikorsky another two years to fix the program before penalties were applied.
In July 2010 the Government again decided to belay the contract penalty, choosing instead to temporarily withhold scheduled progress payments, with the grace period extended to 43 months.
In June the Government claimed that it had fined SAC C$8 mil for delays, with threats of a further C$80.6 mil in liquidated damages if delivery slips beyond July 2013, but based on Canada's track record it's unlikely the penalty will be levied. More likely some fluff about an enhanced support package or somesuch.
I/C
Canadian Maritime H-92 hits Sikorsky parent UTC results | Helihub - the Helicopter Industry Data Source
Canadian Maritime H-92 hits Sikorsky parent UTC results
24 Jan, 13
UTC, the parent company of Sikorsky, reported its fourth quarter and full year results yesterday. In a very telling section of the press release, they admit that "earnings per share [of parent UTC] of $1.04 were down 27%" and of that, "results included a $0.12 charge recorded at Sikorsky related to the Canadian Maritime Helicopter program". The detail is that the "Earnings Per Share of Common Stock - Diluted", subtitle "From continuing operations" fell 27% from $1.42 to $1.04.
So, the Canadian Maritime Helicopter program contributed $0.12 of the $0.38 drop in group earnings per share. Consider that against the fact that Sikorsky only contributes 11.8% of UTC's turnover - $6,791B out of $57.708B
The annual numbers also showed Sikorsky were
* 7.7% down on turnover to $6.791B from $7.355B
* 15.2% down on operating profit to $712M from $840M
* Profit margin was down from 11.4% to 10.5%
24 Jan, 13
UTC, the parent company of Sikorsky, reported its fourth quarter and full year results yesterday. In a very telling section of the press release, they admit that "earnings per share [of parent UTC] of $1.04 were down 27%" and of that, "results included a $0.12 charge recorded at Sikorsky related to the Canadian Maritime Helicopter program". The detail is that the "Earnings Per Share of Common Stock - Diluted", subtitle "From continuing operations" fell 27% from $1.42 to $1.04.
So, the Canadian Maritime Helicopter program contributed $0.12 of the $0.38 drop in group earnings per share. Consider that against the fact that Sikorsky only contributes 11.8% of UTC's turnover - $6,791B out of $57.708B
The annual numbers also showed Sikorsky were
* 7.7% down on turnover to $6.791B from $7.355B
* 15.2% down on operating profit to $712M from $840M
* Profit margin was down from 11.4% to 10.5%
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The $157M charge covers late delivery penalties of $14M per aircraft, reduced aftermarket revenues and costs associated with keeping the CH-148 production line going for longer than planned.
Cyclone deliveries will now extend out to 2015, five or six years later than scheduled.
I/C
Cyclone deliveries will now extend out to 2015, five or six years later than scheduled.
I/C