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A Sandy Hook firm is making waves in the engineering field, winning a competitive bid for a U.S. Army Corp of Engineers contract for engineering and architectural services in the North Atlantic.
Founded a little more than a decade ago as Earthworks, the recently renamed e4sciences already has pieces of major projects, including the deepening of the New York/New Jersey Harbor.
The contract was jointly awarded to Atelier Ten out of New York.
Sikorsky announced during the first quarter it will team with Boeing to go after the U.S. military’s joint multi-role helicopter contract Contributed art.
Stratford-based Sikorsky Aircraft actually delivered more helicopters in the first quarter of this year than a year ago, but sales revenue was down 7 percent to $1.24 billion, the aircraft maker’s parent corporation reported Tuesday.
United Technologies, the parent of Sikorsky, Pratt & Whitney and several of the most recognized industrial and aerospace brands in the world, reported combined net income rose 7 percent of $1.3 billion, or $1.39 per share, from $1.2 billion, or $1.31. UTC said much of its gains came from its commercial business and it expects reductions in military spending to affect its defense business going forward.
Sikorsky delivered 30 military helicopters in the quarter, down 4 from last year, but doubled its commercial craft deliveries to 10 from a year ago. The helicopter maker’s margin on its massive contract with the Pentagon for Black Hawks has been reset, according to the company, as part of sequestration.
In the first quarter, Sikorsky took $5 million in restructuring costs and, while its operating profit was $90 million in the quarter, that reflects a 32 percent drop from a year ago.
Shares of UTC lost 78 cents to finish the day at $92.86 Tuesday.
Connecticut has updated the impact from sequestration cuts that pegs total lost revenues to the state at more than $960 million.
The Office of Fiscal Analysis, after a review of the the spending cuts, estimates Connecticut will lose about $906 million in defense related spending and $56 million in non defense spending, compared to 2010 figures.
Here’s a chart of the Pentagon cuts:
| Connecticut: Potential Impact of Defense Sequester
(in thousands) |
|||
| Category | FY 10 DoD Outlays | $ Sequester Reduction | % Sequester Reduction |
| Procurement | 11,113,554 | (866,857) | -7.8% |
| Wages1 | 622,135 | (19,355) | -3.1% |
| Grants | 54,724 | (20,247) | -37.0% |
| Total | 11,790,413 | (906,459) | -7.7% |
| 1 Wages include active and inactive military and civilian outlays. | |||
Boeing and Sikorsky said Thursday they have the U.S. Military’s helicopter of the future.
Sikorsky Boeing JMR conceptual rendering. Contributed art.
The aviation giants have teamed up to pursue the Army’s Joint Multi-Role contract and will offer up a new breed of helicopter based on Sikorsky’s X2.
The X2 is Sikorsky’s experimental helicopter which operates with counter rotating rotors on top of the aircraft and a pusher propeller in the back. Boeing and Sikorsky are offering their plan for Phase 1 of the JMR Technology Demonstrator program.Winning this competition could mean billions of dollars in business as the plan is to use one type of aircraft for multiple branches and platforms.
“The Sikorsky-Boeing proposal will demonstrate how X2 Technology with counter-rotating coaxial main rotors and a pusher propeller, and advanced fly-by-wire system, will deliver efficient 230-knot cruise airspeed, improved hover efficiency, and weight optimized design in an affordable package,” said Samir Mehta, president of Sikorsky Military Systems. “By leveraging our proven design, we can offer the Army reduced risk, a 100-knot improvement in speed, a 60 percent improvement in combat radius and 50 percent better high-hot hover performance.”
“The Sikorsky-Boeing team for JMR TD is truly a team of equals,” said Leanne Caret, vice president and general manager of Boeing’s Vertical Lift division. “Sikorsky will take the lead role in this JMR TD Phase 1 proposal, and Boeing will take a lead role for Phase 2, for the mission systems demonstrator program.
“Our companies are fully committed to the long term nature of the Future Vertical Lift initiative and we will contribute equally in terms of capital, technological capability and risk on our path to the FVL with the Army,” said Caret.
Proposals for JMR TD Phase 1 are due to the U.S. Army Aviation Applied Technology Directorate by March 6, 2013. The Army is expected to announce its selection of one or more winning bids in late 2013. Demonstrator aircraft are expected to fly in 2017.
Defense News is reporting today that U.S. Army Chief of Staff Gen. Ray Odierno has signed a plan to deal with sequestration that would include extending the Black Hawk fleet modernization program by three to five years.
Sikorsky is currently sitting on a five year, $8.5 billion contract to build the new fleet of Black Hawks. Extending delivery dates would mean fewer helicopters per year for the Stratford helicopter maker, though analysts have pointed out changing the contract terms could force the Pentagon to pay penalties.
The plan is not yet official, but appears to be the one the Pentagon is prepared to follow if it must.
Automatic spending cuts, called sequestration are set to begin being phased in next month. Pentagon spending under sequestration would be trimmed by $500 billion during the next 10 years.
However, there is some expectation that the full force of sequestration will not be unleashed as Congress will eventually do something to stop full implementation later this year.
For more on the situation, visit http://www.defensenews.com/article/20130222/DEFREG02/302220018?utm_source=twitterfeed&utm_medium=twitter
AP file photo of UTC CEO and Chairman Louis Chenevert
With concerns over sequestration hanging over his Sikorsky Aircraft, Pratt & Whitney and UTC Aerospace systems subsidiaries, Louis Chenevert, chief executive officer and chairman of United Technologies, said the company is prepared for a 10 cent hit to earnings per share in a worst case scenario.
Chenevert, speaking at the Barclays Conference, was in step with his CFO Greg Hayes, who spoke a week earlier at another conference espousing similar expectations that automatic defense spending cuts will happen in D.C. as Congress fails to reach a deal over the budget.
But UTC isn’t expecting catastrophe from sequestration for Sikorsky or Pratt.
“Sikorsky locked up Black Hawk volumes on multi-year 8,” Chenevert said, of the $8.5 billion deal the Stratford helicopter maker announced in July 2012. “We got five years of volume.”
He said he doesn’t expect much impact on UTC from sequestration in 2013, but a 10 cent impact on earnings per share was possible in a worst case scenario. This would still be withing the company’s financial guidance, however.
Overall, the top executive at UTC said, “I’m pleased with the programs we are on.”
Besides Black Hawk, he specifically mentioned the 53K, which Sikorsky is building for the Marines and the Joint Strike Fighter, which Pratt is the sole provider of engines and which UTC’s Aerospace division makes a variety of components for.
Analysts at Forecast International and The Teal Group have both said the Black Hawk is viewed as a must have contract for the military as is the 53K, which is for the Marines and is the Pentagon’s only new program.
Chenevert said he does expect impact on the afterparts business for the military.
During the conference, Chenevert also addressed concerns about the Canadian maritime helicopter deal and was in
Sikorsky Aircraft's Black Hawk gate in Stratford. The company installed the helicopter in February of 2012 and today, a multi-year contract to produce it is hoped to insulate the company from major defense budget cuts looming on the horizon. Staff photo by Brian Pounds
line with analysts, who have said despite fines and penalties, the Cyclone would ultimately provide a stage to show off the military variant of Sikorsky’s S-92.
“We are fully committed,” he said, to building “the most capable helicopter in the world”
While the company works with the Canadians over details of the contract, Chenevert was confident the Cyclone would be a win for Sikorsky and UTC.
“Other countries see what the helicopter is doing and salivate about it,” he said.
And while there has been talk about the delays and fines to the program, he noted that aircraft 26 of 28 is already on the line and being built. Four of the aircraft have been delivered and maintenance training has started in Canada.
Stratford-based Sikorsky Aircraft is facing up to $80 million in fines from the Canadian government, Reuters reported this week, if the helicopter maker can’t get the Canadians to accept delivery of the new Cyclone, search and rescue helicopter.
UTC reported that Sikorsky had taken a $157 million charge related to delays in this program in the fourth quarter, already.
Sikorsky signed a $5 billion deal to develop 28 search and rescue helicopters to the Canadians almost eight years ago, but the program has seen a number of delays, some due to changes made by the customer. The Canadians, however, do have four of the helicopters, but have not signed official paperwork accepting delivery, though they are training in them.
According to the contract with the Canadians, if the government does not take official delivery of the aircraft, Sikorsky would have to pay the fine.
In the meantime, a long-running dispute with the U.S. Government over prices Sikorsky charged it between 1999 and 2004, might get settled soon. The feds said Sikorsky overcharged the government for a number of parts, but Sikorsky filed an appeal with the courts and final arguments were held in January. At least that’s what Sikorsky’s parent company, United Technologies said in a filing this week and what court documents from the case say.
If the government prevails, Sikorsky could be on the hook for $94 million.
The Pentagon’s Joint Multi-Role demonstrator program is the starting line for a race to win the most lucrative helicopter contract in U.S. history, that is if the government continues to fund it.
On Friday, the two largest helicopter makers in the U.S. joined forces to go after the contract, which could ultimately lead to thousands of aircraft that will begin replacing Black Hawks, Navy Seahawks, Apache and Chinooks beginning in 2030. While the news was big, many of the reporters on the conference call for the announcement wondered, “Where is Lockheed?”
Sikorsky didn’t bite on the question and Lockheed didn’t answer an email for comment on Friday.
But it’s a good question. Lockheed has been through this kind of competition, an almost winner-take-all fight. In 1996, Lockheed and Boeing won the right to compete for the Joint Strike Fighter contract. The Pentagon envisioned a fighter that could be used by multiple branches. The initial stage of the competition include McDonnell Douglas, a firm with a proud fighter history, but the company failed to make it into the finals and Boeing eventually bought it.
In the end, Lockheed prevailed and is producing the F-35, powered by Pratt engines today.
That’s not to say we won’t see Lockheed down the road. During the conference, both Boeing and Sikorsky officials declined to answer whether they would also offer designs for this competition individually or with other partners. Boeing has already partnered with Bell in the earlier stages of the competition. Boeing’s official actually noted there’s no preclusion from doing that.
Other concerns about the partnership involved the competitive requirement of the program. The Pentagon expects two aircraft to move into a final contest for the contract and reporters wondered if having the two largest helicopter makers in the country join forces might leave the field short on competition.
Ultimately, the competition is a bold move for the U.S. Military.
Senior Aerospace Analyst Ray Jaworowski pointed out, the Pentagon had been buying upgraded versions of the helicopters currently in its fleet for decades and hasn’t been developing much new. Only the V-22 has entered the fleet in the past decade.
Sikorsky, during the conference said it’s too early to tell what kind of impact this could have on jobs, but the helicopter maker is looking for the world’s best talent to put on this and other projects.
As far as what the companies are cooking up, they wouldn’t say. Sikorsky’s official said because of the length of time of the competition, the design and technology will change.
While a lot is riding on this for both Boeing and Sikorsky, jobs in particular, the contest itself is exciting for engineers, with Jaworowski agreeing it’s a great time to be an aerospace engineer.
Copyright © 2013 Hearst Communications Inc.
