Sikorsky Pleads for Contracts

WASHINGTON -- Sikorsky Aircraft, a storied name in U.S. aviation history, fears for its life.


The company that was founded 71 years ago by Russian refugee and inventor Igor Sikorsky has launched an intense lobbying effort to persuade the Clinton administration to restore canceled helicopter contracts and safeguard an endangered $20 billion program to build a 21st-century scout helicopter.


As the top U.S. helicopter maker, with $2.3 billion in 1993 sales, Sikorsky argues that the nation could lose the ability to build military helicopters if it disappears. But some top Pentagon officials think these capabilities would live on at the nation's three other helicopter firms, industry officials said.


Defense Secretary William Perry has said he will ensure that key segments of the defense industry survive the current Pentagon cutbacks. But he has also refused to guarantee survival of any one firm.


"I explicitly reject the idea of sustaining a defense company just to keep it in business," Perry said last year. "We expect defense companies to go out of business, and we will let that happen."


One of Sikorsky's main concerns is saving the planned RAH-66 Comanche scout helicopter. It and the Marines' planned V-22 Osprey, which takes off like a helicopter and flies like a plane, are on a Pentagon list of programs being considered for execution.


After Tuesday's elections the military will probably announce that the V-22 will live and the Comanche will die, despite continuing Army efforts to save it, Pentagon and industry sources said.


This and other problems could force Connecticut-based Sikorsky to lay off half its 10,000 workers in coming years, according to the company.


Sikorsky and Boeing Co., which were to start building Comanches in 2001, have launched a newspaper advertising campaign to save the project. They are also lobbying Congress and the Pentagon.


Some analysts see an ally in Paul Kaminski, the Defense Department's acquisitions and technology chief, who used to serve on a science advisory board of Sikorsky's parent company, United Technologies Corp.


Three Connecticut Democrats -- Senator Joseph Lieberman, Senator Christopher Dodd and Representative Rosa DeLauro -- have heavily lobbied the White House on Sikorsky's behalf. They asked the administration to save the Comanche and approve production of 36 extra of the company's Black Hawk helicopters per year in 1997, 1998, and maybe 1999 and 2000. The cost would run between $432 million and $864 million.


The White House was "taken aback that it was as bad as it is at Sikorsky, that the cuts were that Draconian," a knowledgeable source said.


The Democrats argue that administration assistance for Sikorsky could help Connecticut's Democratic comptroller, William E. Curry Jr., who is locked in a four-way race for governor. President Bill Clinton, Vice President Al Gore and First Lady Hillary Rodham Clinton all visited the state recently to back Curry. Democratic candidates such as Governor Ann Richards of Texas and Senator Harris Wofford of Pennsylvania, whose states house some of the V-22 and Comanche assembly plants, unsuccessfully sought assurances from the Clinton administration that the programs would survive.


The bad news for Sikorsky started a year ago, when the White House said it would end production this year of its Black Hawk and Seahawk transport helicopters, the last of 1,400 made over 16 years.


That meant the firm, which has turned out an average of 110 military helicopters a year for the past six years, would not make a single military helicopter from 1997 to 2001, when it would start work on the Comanche.


Sikorsky's prospects turned gloomier with recent news that even the Comanche likely would be axed. "We see ourselves falling off a cliff in 1996 because of the termination of all our government work," said Gary Rast, Sikorsky's vice president for government business. "Sikorsky's a national asset, and it could be put in jeopardy."


Sikorsky also is lobbying, in the event Comanche's production is canceled, to build two prototypes of the helicopter, with an option to build more. Doing less, Sikorsky argues, would mean losing the ability to build the type of high-tech sensors and computers that Comanche would carry.


The firm, which has been profitable in recent years, makes only one helicopter for the non-military market, and that model's sales are uneven.


Executives of the nation's four helicopter firms -- Sikorsky, McDonnell Douglas Corp., Boeing and Textron Inc.'s Bell Helicopter -- say their companies are quickly losing weight and are ripe for merger.


The industry expects sales of only $4 billion in 1996; the figure was $7 billion in 1992. And Sikorsky is the likeliest candidate for sale or merger, the executives said.