Northrop, Italy’s Finmeccanica team up for US helicopters

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Northrop Grumman and AgustaWestland, a unit of Italy’s Finmeccanica SpA, said they were joining forces to compete for the new U.S. Air Force Combat Rescue helicopter and the U.S. Navy’s new “Marine One” presidential helicopter.

The announcement marks a sharp turn for AgustaWestland, which was previously teamed with Lockheed Martin Corp on the Navy’s last attempt to buy a new presidential helicopter, and the U.S. Air Force’s effort to replace its aging search and rescue helicopters. Both programs were eventually canceled amid rising costs.

Northrop and AgustaWestland said they signed a comprehensive teaming agreement to respond to the two anticipated U.S. competitions, with Northrop serving as the prime contractor in both cases, Reuters reports.

Paul Meyer, vice president and general manager of advanced programs for Northrop’s aerospace systems sector, told Reuters the agreement created a “solid team” that would submit an essentially “off-the-shelf” offering for both competitions, based on AgustaWestland’s existing AW101 helicopter.

He said Northrop had already identified a possible U.S. site for assembly of the helicopters, but declined to name it. Agusta also has 600 workers at a facility in Philadelphia.

Meyer said AgustaWestland would initially ship the helicopters to the U.S. facility, where Northrop would integrate U.S. avionics and other equipment. The helicopter would have at least 50 percent U.S. content, he added, but gave no further details since the competitions are just beginning.

Bruno Spagnolini, chief executive of AgustaWestland, told Reuters the two companies could consider expanding the agreement to include some U.S.-based production at a future point. He said the company was mindful of the need to boost the number of local jobs given difficult economic conditions.

Spagnolini said the link with Northrop made sense for AgustaWestland since Northrop was interested solely in integrating weapons onto the new helicopter and did not want to compete with its own helicopter program.

The Air Force released a draft request for proposals for a new combat rescue helicopter last Friday with an eye to formally kicking off the competition later this fall.

Meyer said he expected the Air Force competition to proceed, despite mounting budget pressures, given the advanced age of the service’s current fleet of 148 rescue helicopters.

POTENTIAL RIVAL BIDDERS

Sikorsky Aircraft, a unit of United Technologies Corp , Boeing Co, and Textron Inc’s Bell Helicopter may also bid for the helicopter orders — among the few bigger competitions available in the United States.

Meyer and Spagnolini said the new teaming agreement made sense given AgustaWestland’s expertise in building helicopters, and Northrop’s experience in integrating large aircraft programs. “We speak the same language,” Meyer said. “We understand the issues associated with the aircraft.”

Spagnolini said AgustaWestland’s helicopter offering had matured since the previous competitions. AgustaWestland has sold over 180 of its 101 models to five NATO countries and Japan, among others, he said, which could help lower costs on the aircraft.
“All the modifications that we were planning to have a few years ago are now embedded in what we call our international version of the 101,” he said. “We are much more ready than years ago, for sure.”

The teaming announcement comes a week after Britain’s BAE Systems Plc and European aerospace group said they were in advanced talks about a merger.

Spagnolini said AgustaWestland’s parent company, Finmeccanica, was also interested in mergers, but it was too soon to speculate about a larger deal involving Northrop and Finmeccanica.
“It’s probably way too early for that,” Meyer said. “We’re not prepared nor willing to discus anything else at this point in time.”