Lockheed Gets Presidential Chopper Contract

WASHINGTON – A new fleet of presidential helicopters will be built by Lockheed Martin (search) and its international partners, the Navy announced Friday, ending a fierce competition that had both political and international implications.

Saying the president "needs a more survivable helicopter while the nation engages in the global war on terrorism," John Young, assistant secretary of the Navy for research, development and acquisition, said Lockheed met all of the security and technology requirements at the best price.

The $6.1 billion program to buy 23 high-tech, high-security aircraft is emblematic of the outsourcing of American jobs and the question of how open the U.S. military market is to foreign contractors.

And some members of Congress criticized the decision to put the U.S. president in an aircraft that will be made partially overseas.

It is difficult to understand why we would use U.S. tax dollars to fund the further development of foreign helicopter technology," said House Armed Services Chairman Duncan Hunter (search), R-Calif.

But New York lawmakers hailed the decision, which will bring a new manufacturing plant to Owego, N.Y., and as many as 750 new jobs. And Sen. Charles Schumer (search), D-N.Y. said it was a testament to Lockheed's business leadership.

"The US101 will provide the president of the United States with a state-of-the-art-helicopter ... an Oval Office in the sky," said Sen. Hillary Clinton, D-N.Y., who as first lady who spent time in the current Marine One.

Lockheed's president, Robert J. Stevens, said his team will being work immediately to set up a secure facility in Owego, and an assembly plant in Amarillo, Texas.

Maryland-based Lockheed and its European partners waged a major public relations campaign, with the help of political leaders from Britain and Italy. The British government welcomed the decision, saying it would benefit both the United States and Britain. There was no immediate reaction from Italy.

The decision was a blow to Connecticut-based Sikorsky Aircraft, which has built the presidential fleet since 1957 and saw the contract as a point of pride.

Rep. Rosa DeLauro, D-Conn., who was at the Sikorsky plant in Stratford, and other Connecticut lawmakers pledged to fight the decision.

"It looks like the U.S. Navy just shot down an American helicopter," said Rep. Rob Simmons, R-Conn. "This deal results in a net loss of American jobs. We're going to over this with a fine-toothed comb."

DeLauro added, "'Made in America' should mean something. The Defense Department has some explaining to do."

The $6.1 billion program includes $2.5 billion for development and $3.6 billion to buy the aircraft. Lockheed will receive an initial installment of $1.6 billion.

The contract may give the winner a potential edge when the Pentagon looks to replace hundreds of search and rescue helicopters in coming years. It also gives Lockheed the bragging rights to one of the most photographed helicopters in the world: the president's green-and-white aircraft often shown as it lifts off from the South Lawn of the White House.

Lockheed's winning entry, the US101, is based on a British-Italian AgustaWestland aircraft, now owned by Finmeccanica. The helicopter has several key components, including the main transmission and rotor blades, that will be built overseas.

Sikorsky, a unit of United Technologies Corp., and its backers argued that the VH-92 Super Hawk's all-American parts provided greater security than a helicopter built in part in other countries.

But the Navy went with the longer, wider, more powerful aircraft, with its three engines, built by General Electric in Lynn, Mass. Sikorsky's Super Hawk has two engines.

Plans to replace the Marine Corps' aging presidential squadron took on greater importance after the Sept. 11 terrorist attacks. Last year the White House pressed for an expedited bidding process because of security concerns, but Navy officials later delayed a decision, saying they needed about a year to get more information.

The companies submitted bids last February, and have waged a massive public relations campaign, complete with billboards, demonstration flights, ads and radio commercials.

Friday's loss is the second major defeat for Sikorsky is a little less than a year. Last February the Pentagon canceled the $39 billion Comanche helicopter program, which was a joint venture with Boeing Helicopters.

The company still builds one of the military's workhorse helicopters, the Black Hawk, which is being used broadly in the Iraq war. The Pentagon is expected to order hundreds more in coming years to replace current models.