Lockheed wins Marine One contract

/ Source: The Associated Press

Lockheed Martin Corp. will build the new presidential helicopter fleet, the Navy announced Friday, putting an end to a fierce competition that had both political and international overtones.

The White House had pushed for a new Marine One fleet. The president “needs a more survivable helicopter while the nation engages in the global war on terrorism,” said John Young, assistant secretary of the Navy for research, development and acquisition, in making the announcement.

The $6.1 billion contract to buy 23 high-tech, high-security aircraft, is relatively small in the military budget. But it is emblematic of two important issues: the outsourcing of American jobs and the question of how open the U.S. military market is to foreign contractors.

Maryland-based Lockheed and its European partners had waged a major public relations campaign, with the help of political leaders from England and Italy.

The decision was a blow to Connecticut-based Sikorsky Aircraft Corp., which has built the presidential fleet since 1957, and saw the contract as a point of pride.

Lockheed shares fell 2 cents to close at $56.38 on the New York Stock Exchange, while Sikorsky parent United Technologies Corp. shares lost 16 cents to close at $102.

“The US101 will provide the president of the United States with a state-of-the-art-helicopter ... an Oval Office in the sky,” said Sen. Hillary Clinton, D-N.Y.

But Rep. Rosa DeLauro, D-Conn. who was at the Sikorsky plant in Stratford, Conn., expressed disappointment.

“’Made in America’ should mean something,” she said. “The Defense Department has some explaining to do.”

For the winner the contract means millions of dollars in federal research funds, and a potential edge when the Pentagon looks to replace hundreds of search and rescue helicopters in coming years.

It also gives Lockheed the bragging rights to one of the most photographed helicopters in the world: the president’s green-and-white aircraft often shown as it lifts off from the South Lawn of the White House.

Lockheed’s winning entry, the US101, is based on a British-Italian AgustaWestland aircraft, now owned by Finmeccanica. The helicopter has several key components, including the main transmission and rotor blades, that will be built overseas.

Sikorsky and its backers argued that the VH-92 Super Hawk’s all-American parts provided greater security than a helicopter built in part in other countries.

But the Navy went with the longer, wider, more powerful aircraft, with its three engines, built by General Electric Co. in Lynn, Mass. Sikorsky’s Super Hawk has two engines.

Plans to replace the Marine Corps’ aging presidential squadron took on greater importance after the Sept. 11 terrorist attacks. Last year the White House pressed for an expedited bidding process because of security concerns, but Navy officials later delayed a decision, saying they needed about a year to get more information.

The companies submitted bids last February, and have waged a massive public relations campaign, complete with billboards, demonstration flights, ads and radio commercials.

Friday’s loss is the second major defeat for Sikorsky is a little less than a year. Last February the Pentagon canceled the $39 billion Comanche helicopter program, which was a joint venture with Boeing Helicopters.

The company still builds one of the military’s workhorse helicopters, the Black Hawk, which is being used broadly in the Iraq war. The Pentagon is expected to order hundreds more in coming years to replace current models.