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. Last Updated: 07/27/2016

Is Sikorsky a Saboteur or a Savior?

In 1960, Nikita Khrushchev visited the United States, and at some point took a spin on Dwight Eisenhower's C-58 presidential helicopter. Khrushchev returned to Moscow and immediately instructed one of the Soviet Union's most promising aviation engineers, Mikhail Mil, to buy him a helicopter like Eisenhower's.

It was the height of the Cold War. But Mil was apparently given surprising freedoms to explore the Sikorsky Aircraft plant in Connecticut. In his diary, Mil recounts being impressed with how the Americans assembled their motors, with their practice of using wrap-around cockpit windows, and with the motorized testing towers they built to put rotor-blade designs through their paces.

Mil did not meet Igor Sikorsky, the Russian emigr? who founded Sikorsky Helicopters — in fact the two men never met. But Mil bought Khrushchev two C-58s and also took home a couple of Boeing helicopters. The visit and the American helicopters informed Mil's creation of his own helicopter plant, and particularly his design of the 40-ton, B-12 helicopter.

Twenty years later, according to Mil's daughter Nadezhda Mil, Mil made a present to Sikorsky — by then a close friend and correspondent — of some of his Mi-4 helicopters for study.

"A reasonable exchange of ideas and opinions between two engineers from different nations does not endanger the state interests of their respective countries. And it can return much," Mil wrote in his diary of his friendship with Sikorsky.

"As it happened, engineers in different nations, independently of each other, came to accept one [design] concept" — a single main helicopter rotor for lift, coupled with a perpendicular tail rotor for steering and control — "which made personal contact between them, or at least the reading of each other's books and articles, the greatest of pleasures."

Mil and Sikorsky have since passed away, but the factories they built continue to jockey for dominance of the world helicopter market.

Today, however, the Moscow Mil Helicopter Design Bureau is, like so many other Soviet-era industrial concerns, in crisis. The plant's 1992 privatization has been attacked by the Audit Chamber, an investigative arm of parliament. That same privatization has -ultimately allowed about 9.38 percent of shares in the Mil Design Bureau to be bought up by Sikorsky Aircraft, its American competitor.

This fall, the Mil plant has seen top executives disappearing or suffering mysterious beatings. The courts have installed an umpteenth external manager, Vladimir Bogocharyov, to either bankrupt the company or revive it.

Theories abound as to what's wrong at the Mil plant. Some are suggesting that Sikorsky has actually been playing the role of saboteur.

"Sikorsky is the biggest danger, the biggest competitor. The Mil plant is a tasty morsel," said Irina Rukina, head of the Moscow Mayor's Office's economic policy committee.

Rukina said she began to look into the disputes for control of the Mil this summer, at the request of some of the plant's employees.

Rukina said she concluded that "the situation at the Mil plant is out of control," and appealed to Mayor Yury Luzhkov to take some sort of action. But by fall, she said, she had changed gears and no longer wanted any involvement in the Mil.

She said she had decided Sikorsky was working against the plant, and that fate of the Mil was "a question of big politics, and I do not like it."

That sort of talk was echoed by a representative of the Oppenheimer Corp., an investment fund that over the summer held about 20 percent of the Mil's shares but recently cashed out. "Sikorsky has its own ideas, has a very tough approach and ideas different from those of the [Russian] government," he said.

Remarks like that have filled many a newspaper or magazine article arguing that the Americans are wreckers. But details of Sikorsky's alleged wrongdoing are scarce — while others make eloquent and detailed cases that Sikorsky is actually the Mil plant's best friend.

"The version that Sikorsky is to blame for all of Mil's problems is absolute nonsense," said Nadezhda Mil, Mikhail Mil's daughter and a shareholder in the plant, in an interview.

"The ballooning scandal around Sikorsky is an intentional distraction."

Nadezhda Mil said the Sikorsky company as a shareholder had always been "cultured" and "correct."

She said Sikorsky had never tried to participate in the management of Mil and had never sought seats on the board of directors.

"Sikorsky is not interested in the bankruptcy of [Mil]," agreed Sergei Gorbunov, a spokesman for the Russian Aviation and Space Agency.

On the contrary, said Alexei Samushenko, Mil's acting general constructor, "Sikorsky is the only foreign partner that has over the past few years been financing some of Mil's projects."

Sikorsky Aircraft's parent company is United Technologies Corp., which has a huge presence in Russian industry, including 9,000 employees and offices in 25 cities.

UTC owns the Russian elevator maker Otis Lifts. Through its subsidiary Pratt & Whitney, it is making airplane engines at Perm Motors.

Through another subsidiary, Hamilton Standard, it is making air conditioners for Boeing and Tupolev airplanes along with the Russian company Nauka.

"This particular group [United Technologies] has been one of the best supporters of Russia and its industries in the last 10 years," said Paul Duffy, an independent aviation analyst.

At the Mil plant, executives say Sikorsky has a three-year, $3 million contract for engineering services.

They say Sikorsky has also given the Mil $750,000 in computers and other equipment as part of some nearly signed contracts on jointly designing, producing and testing experimental rotor blades for civilian helicopters.

Acting general constructor Samushenko said that by 2003, the plan is for Mil to be producing 40 rotor-blade arrays annually, probably for the next 25 years.

Initially, each rotor-blade array will sell for about $40,000, suggesting that if all goes as planned the Mil will be earning $1.6 million a year from the project. The prices are expected to drop to little more than half of that over time.

Sikorsky also hopes to get the North American rights to sell, market and service Mil's mighty Mi-26 helicopter.

The U.S. market was only opened to Russian aviation in 1998, when presidents Bill Clinton and Boris Yeltsin signed an agreement acknowledging each country's aviation safety standards.

The Mi-26 is even more powerful than Sikorsky's CH-53E, which is already able to lift 11,300-kilogram payloads, more than any other Western helicopter.

Samushenko also said Sikorsky's S-76 helicopter is expensive when compared with Mil's similar Mi-54. He said Sikorsky is interested in producing parts for the S-76 at the Mil plant and was considering a partnership with Mil to sell and service the Mi-54 on foreign markets.

Mil's engineers are also drawing on Sikorsky's expertise.

For example, Sikorsky has developed a civilian helicopter based on modifications to the design of U.S. Army Black Hawk helicopters, and Mil is doing something similar in trying to craft a transport helicopter out of the Russian Mi-28 combat helicopter.

Sikorsky has shared some of its technical experience in going civilian with the Black Hawk, allowing Mil to save lots of money, Samushenko said.

Sikorsky representatives met last week with the latest Mil external manager, Bogocharyov, to discuss those and other long-term cooperation plans, said UTC spokesman Yevgeny Chelobikto.

Those long-term cooperation plans at minimum will depend on the plans of Mil's creditors, who are owed about $11 million, and on some of its more mysterious shareholders.

They will also depend on what comes of talk of increasing the government's stake in the plant from 31 percent to 51 percent and dramatically increasing military aviation orders.