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Lockheed Team Wins Redesign Of Marine One

For Sikorsky, Loss of Contract Also Symbolizes Slip in Prestige

By Renae Merle
Washington Post Staff Writer
Saturday, January 29, 2005; Page E01

Sikorsky Aircraft Corp. -- maker of the president's helicopter since the Eisenhower administration -- lost its parking spot on the White House lawn yesterday.

Ending a bitterly contested battle, the Navy chose an international team led by Lockheed Martin Corp. to build a new version of the helicopter, roiling congressional critics intent on protecting American jobs and prestige.

(Susan Walsh -- AP)

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"This competition is about making sure that 'Made in America' still means something," said Rep. Rosa L. DeLauro (D-Conn.), home of thousands of Sikorsky jobs. "What kind of statement do we make to the American worker if we outsource Marine One? It is one of the most enduring symbols of our country, now tarnished."

Sikorsky's chief executive had called the $6 billion program a "must win" and -- along with Lockheed -- conducted one of the most public and bruising battles for a military contract in years.

Lockheed is using a helicopter designed by AgustaWestland, a unit of the Italian defense firm Finmeccanica SpA. Critics complained that the president should be flown only in an American aircraft, and Sikorsky, a unit of Connecticut-based United Technologies Corp., even dumped its foreign contractors, including companies from Taiwan and Japan, arguing that only an all-American team could ensure the president's safety.

Sixty-five percent of Lockheed's aircraft will be built in the United States; the transmission will be built in Italy and the blades in the United Kingdom.

The Navy said the Lockheed helicopter would meet its needs more quickly and on budget. The contract calls for 23 helicopters, with the first to be delivered in 2009. The chopper will be able to fly twice as far as those in the current fleet and hold more people and security equipment, the Navy said. "This decision truly reflects the best value and capability for the American taxpayer who is funding it . . . and the future presidents who will fly in it," said John J. Young Jr., the Navy's acquisition chief.

The public campaign for the contract attracted international attention, including personal appeals to President Bush from Italian Prime Minister Silvio Berlusconi and British Prime Minister Tony Blair. The Navy said politics did not factor into its decision.

The industry viewed the contract as pivotal in the military helicopter market. The last major competition was in 1991, when a Boeing Co. and Sikorsky team won a contract to build the now-defunct stealth Comanche helicopter.

Industry analysts said Lockheed's transatlantic team now has the advantage in an Air Force competition, potentially worth up to $10 billion, to build 132 search-and-rescue choppers.

"This decision is all the more unfortunate given the continued atrophy of the United States helicopter industrial base," said Rep. Duncan Hunter (R-Calif.), chairman of the House Armed Services Committee. "The European helicopter manufacturers already have a commanding position in the global helicopter marketplace."

But for Sikorsky, winning the contract was a matter of corporate pride. The company has faced increasing competition from overseas competitors, including AgustaWestland, and viewed Marine One as key to staying competitive. It spent hundreds of millions of dollars to develop the helicopter it entered in the competition. "Sikorsky having lost the Comanche looks more fragile in the helicopter market," said Jeff Bialos, defense industry consultant and the former deputy undersecretary of defense for industrial affairs.

Stephen N. Finger, president of Sikorsky, said the company was "disappointed with the outcome."

Lockheed chief executive Robert J. Stevens said his company is "honored that trust has been placed in Lockheed Martin . . . for this vital and highly visible mission."

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