The presidential helicopter competition has woken up the historically insulated US military aviation market to the threat posed by European contractors
Break into a traditionally protected market in another country. Overcome a domestic supplier with an entrenched grip on a highly visible product. Survive and win a supposedly technical competition tangled up in a charged political fracas. All the previous sentences describe the outlines of AgustaWestand's ongoing, tempestuous attempt to unseat Sikorsky as the supplier for the US presidential helicopter fleet, but they could also be the basis for a potentially disturbing template for future procurement competitions.
Over the next three years, an unprecedented series of transatlantic bidding wars are expected to break out over several US military contests, including search and rescue, light utility and armed scout helicopters; small fixed-wing transports and - most recently confirmed - aerial refuellers.
Counter-attack
As strong European contenders continue to invade an historically insulated marketplace, US-based defence suppliers unfamiliar with facing foreign competition at home may be pushed to launch a counter-attack.
Sikorsky's strategy to paint the selection of the US Navy's VXX presidential helicopter replacement in patriotic colours may provide a starting point, especially if the tactic proves to be successful. The navy now plans to make a long-delayed decision for the VXX contract in late January, or early February, selecting between the Sikorsky VH-92 and the Lockheed Martin/AgustaWestland/Bell US101.
The VXX winner will be announced as several new US competitions drawing transatlantic interest get under way. Most significantly, Boeing will be forced to defend its monopoly on the US tanker market, while the standard US helicopter primes - Bell Helicopter, Boeing and Sikorsky - will be challenged by European rivals AgustaWestland and Eurocopter on new programmes, such as the 368-aircraft armed reconnaissance helicopter and 132-aircraft search and rescue helicopter, called the personnel recovery vehicle (PRV).
Some US manufacturers, such as Boeing and Sikorsky, could be most at risk if European bidders are allowed to tap into the world's largest defence market at the major platform level for the first time.
"The main thrust of Boeing's business strategy has been to claim a larger share of the protected North American defence business as a hedge against competition in commercial transports," says Loren Thompson, executive director of the Washington DC-based Lexington Institute. "So the notion that they might lose an order of hundreds of modified airliners to a foreign supplier is doubly depressing."
At the same time, other US prime contractors are positioning to profit from a major rebalancing of the transatlantic defence trade. Lockheed Martin and Northrop Grumman have each agreed to play the role of a systems integrator with European partners in niche capability areas. Northrop Grumman has partnered Eurocopter to offer the NH90 to the US Air Force for the PRV competitive phase, expected to launch in January. Lockheed Martin, meanwhile, will continue to serve as prime contractor for the US101 contest. Both bidding teams will again face Sikorsky, the incumbent, US-based supplier.
The thrust of Lockheed Martin's alliance strategy is to "provide the best mission capability for the warfighter, and that is going to be our focus as we move forward," says Stephen Ramsey, Lockheed Martin US101 vice-president. "You're going to see us focus on that in PRV."
Whether that partnering philosophy can grow to include a teaming relationship with a likely EADS North America bid for the USAF tanker modernisation programme remains an open question. As the air force lays the groundwork to launch a competition next year, EADS is preparing to offer a bid based on the Airbus A330-200 selected by Australia and the UK, with final assembly in the USA and a US partner to serve as prime contractor.
EADS suitors
Lockheed Martin and Northrop Grumman are widely considered the most likely candidates to team with EADS, although until recently both had publicly refused to consider such an alliance.
Replacing the air force's tanker fleet presents a far greater leap in the transatlantic trade balance than the VXX order for 23 aircraft, and also is a league apart from the US Army's decision in August to award the Aerial Common Sensor contract to a Lockheed Martin team using the Brazilian Embraer ERJ-145 regional jet.
"The similarity between Marine One [VXX] and the tanker programme are more superficial than real," says Thompson. "Marine One will cost less than one year of a tanker modernisation effort." He adds, however, that the trade implications of the tanker deal are "really profound for the nation's largest exporter" - which is Boeing.
Potential EADS teammates must also consider the example set by Sikorsky in the VXX competition, which a Lockheed Martin executive in July derided to reporters as cynical and jingoistic. Sikorsky executives have always emphasised that the VH-92 is capable of capturing the VXX contract based on the technical merits of the aircraft, but the company also has reason to fear that politics may interfere with the navy's decision-making.
Prime Minister Silvio Berlusconi of Italy and UK premier Tony Blair have lobbied the Bush administration on behalf of AgustaWestland's US101 offer. In mid-October, UK defence procurement minister Lord Willy Bach raised the issue in meetings at the USDepartment of Defense.
Sikorsky maintains that the US president's safety would be compromised by having an overseas company own the designs of the aircraft, with workers abroad supplying several key parts, including transmissions and rotor blades.
The company has also stated that it is not apparent how the Lockheed Martin-led team can ensure that all US101 workers in key roles will have access to the necessary security clearances. Moreover, the company has charged that there would be no net increase of skilled jobs for Americans with the US101 programme, only a redistribution of jobs now belonging to Sikorsky workers.
At a higher level, Sikorsky has complained that selecting European aircraft designs for US military procurements amounts to "unilateral disarmament" of the US defence industry.
Bob Trice, Lockheed Martin senior business development manager, fought back at this year's Farnborough air show, calling Sikorsky's claims "the ultimate hypocrisy" for an aerospace giant with a global supply chain and worldwide network of customers. Trice also warned that Sikorsky's attacks would give rise to protectionist trade policies that do not reflect the USA's preference for free markets.
Lockheed Martin has concentrated its marketing efforts on showcasing a completed US101 prototype fitted with 2,500shp (1,860kW) General Electric CT7-8E engines and a notional mission system.
Ramsey says the team has demonstrated a "day in the life of the president" mission rehearsal aboard the US101 prototype, in an effort to demonstrate the Lockheed Martin/ AgustaWestland proposal's reliance on existing technologies. At least partly to blame for the political focus of the VXX programme is the uninformed nature of the public debate on the merits of either aircraft. All attempts to measure the suitability of the contestants are frustrated by two factors - secrecy surrounding the government's requirements and the wide disparity between the two contenders.
VXX differences
Although the baseline designs for the VXX contenders - the EH101 and S-92 - are frequently in competition, the aircraft are only barely in the same class. Indeed, the roughly 2,720kg (6,000lb) gulf in maximum gross weight between the two aircraft is similar to the size gap between the S-92 and the Sikorsky UH-60L Black Hawk.
Officially, the navy only acknowledges a need to replace the Sikorsky VH-3D and Sikorsky VH-60N with a single aircraft that can provide "safe and timely transport" for the president, can be deployed worldwide and operate as the primary command and control centre while the president is on board. Transportability remains the only requirement with a published metric attached: disassembly within 32 maintenance man hours (MMH) or less, then loaded within 16 MMH on to a Lockheed Martin C-5 or Boeing C-17.
It is believed the navy's requirements spell out advanced networks and mission systems, but no details are in the public domain. The general lack of reference points invalidates most definitive judgements about the competitors, such as how important the US101's superior cabin size will weigh in the navy's decision. Comparing operating profiles for the three-engined US101 against the two-engined VH-92 is also baseless without knowing the navy's specific performance requirements.
STEPHEN TRIMBLE / WASHINGTON DC
Source: Flight International