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US: Presidential Helicopter War

by John MachacekGannett News Service
February 17th, 2004

Washington - As the battle over who will build a new fleet of Marine One helicopters heated up last year, Rep. Rob Simmons of Connecticut worried that Sikorsky Aircraft Corp. in his home state was losing ground.

Lockheed Martin, one of the world's largest aerospace and defense contractors, had begun running full-page ads in newspapers and at subway stops near the Pentagon as part of an all-out lobbying campaign to oust tiny Sikorsky as the presidential helicopter builder. Lockheed also brought lawmakers to plants in Owego, N.Y., for briefings and rides on the helicopter it was proposing for the president.

Sikorsky, which has had the contract for 46 years, had not yet used the media to influence Pentagon decision-makers.

Seeing that kind of firepower, Simmons called the head of United Technologies Corp., Sikorksy's parent company, to match Lockheed "dollar for dollar" on publicity. He also urged the company to set up a mock-up of its own helicopter near the Capitol so lawmakers can get a look.

"I don't want Sikorsky to be left in the dust because they aren't playing the media game," said Simmons, a Republican. "First impressions are often very strong."

So go the helicopter wars - a high-stakes battle for the prestige of providing a helicopter fleet used to ferry presidents almost daily from the White House lawn to nearby locales or to Air Force One for longer trips.

Both companies say they want to win the $1.6 billion contract on the merits -price, capability and performance - and play down factors such as lobbying and politics. But because Lockheed has teamed up with a British-Italian consortium for its proposal, the battle has re-ignited the "Buy America" debate and played into international politics.

British Prime Minister Tony Blair already has asked President Bush to "look favorably" on the Lockheed proposal - a move that some see as a first step before calling in a favor for supporting Bush on the Iraq war.

Jobs and clout

The issue of buying American products made by Americans to keep profits in the United States is a serious one and could play a role before a decision is made as early as May.

"At a time when people are losing their jobs to foreign competition, I will not accept presidents of the United States flying around in a foreign helicopter," said Simmons, whose district includes many Sikorsky workers represented by the Teamsters Union.

On the other side, New York lawmakers are telling Bush and other top administration officials that the contract would bring hundreds of new jobs to upstate New York a region that has hemorrhaged manufacturing jobs in the last decade.

Lockheed Martin's entry in the competition is the US101, the U.S. version of a three-engine helicopter built by AgustaWestland, a British-Italian manufacturer, and used by five NATO countries and Japan.

But 65% of this version would be made in the United States, use General Electric engines as Sikorsky does, and be assembled at Texas and New York plants by Lockheed and Bell Helicopter of Fort Worth, another Lockheed partner.

Sikorsky is proposing the VH-92, a version of its new two-engine S-92 that already has won a top aviation award and praise as the "world's safest helicopter."

Sikorsky also has tapped subcontractors from Texas, the president's home state, for what it calls its "all-American team" of U.S. contractors. By keeping all helicopter work in the United States, presidents won't have to worry whether parts or information were compromised by the involvement of a foreign company, say Sikorsky officials.

Although the contract for 23 helicopters is prestigious, it is a relatively small prize among defense contracts. Still, Sikorsky has been careful to get out the word that the winner could gain the inside track for future helicopters needed by the U.S. military. Both New York and Connecticut covet those potential jobs to help compensate for their heavy losses in manufacturing jobs over the last decade.

Lockheed officials say their Owego plant could gain up to 750 engineering and technical jobs if it wins. The financial health of Sikorsky, which employs 3,200 people at three Connecticut plants and only builds helicopters, could be at stake if it doesn't keep the contract. It already had a significant number of layoffs last year due to declining business.

Lockheed and Sikorsky are investing considerable money and manpower to prepare their bids, submitted Feb. 2 to the Pentagon, and influence those that might help them. That would include strategizing with key lawmakers in the New York and Connecticut congressional delegations, whose clout would be tested through this competition.

Both delegations, which usually work in tandem, have members on the Armed Services and Appropriations Committees, panels that can be used for horse-trading on legislation or calling in chits at the Pentagon. But the New York delegation, with 31 members, is significantly larger than Connecticut's seven-member group.

Sen. Hillary Rodham Clinton, D-N.Y., who joined the Armed Services panel last year, said she believes Lockheed can win if the competition is free from political interference. The former first lady, who flew often on the Marine One fleet, said her recent ride on the US101 during poor weather conditions convinced her that it was bigger and could defend itself against an attack better than the Sikorksy helicopter.

"It has proven defensive capabilities, which is one of the reasons why we are buying a new presidential helicopter," she said.

New York lawmakers say they will be closely monitoring the process to make sure it is fair. Sen. Charles Schumer, D-N.Y., already has called Secretary of State Colin Powell as part of his effort to "rattle the cages."

"What we do will depend on how circumstances evolve," said Rep. Maurice Hinchey, who represents part of Owego.

Both companies declined to discuss how much they are spending on lobbying and media for the contract. But records filed with Congress provide a gauge of each company's power. Lockheed has been spending about $6 million annually for all of its Washington lobbying compared with about $3 million by United Technologies, Sikorsky's parent.

Political opportunities

Sikorsky did not start running full-page ads in defense publications until last fall and only recently put them at subway stops. But company officials said they would not attempt to match Lockheed's media spending.

"We don't think the Pentagon will base its decision on who creates the better ads or puts them in more subway stations," said Scott Seligman, a United Technologies spokesman.

Still, the company has hired outside lobbyists to help with their bid. "I wouldn't be surprised when all is said and done that both sides will have a hundred lobbyists assigned to it (helicopter contract)," said Rep. Sherwood Boehlert, a New York Republican whose district includes part of Owego. He recently commended the Lockheed proposal to Bush and White House Chief of Staff Andrew Card.

"I said, 'Mr. President, I flew in your helicopter yesterday and, let me tell you, it is a beauty,' " Boehlert said. "He said, 'Boehlert, are you lobbying me?' and I said, 'You bet I am.' "

The Navy's decision-making process is "hermetically sealed" from lobbying and politics, says Loren Thompson, defense analyst at the Virginia-based Lexington Institute. But as happens many times on prized defense contracts, political pressure could come into play if Defense Secretary Donald Rumsfeld or the White House get drawn into the competition. The loser could take its case to Capitol Hill and try to get Congress to reverse the decision.

"This contract is unique in being inherently politicized from the word go," said aerospace analyst Richard Aboulafia of the Teal Group in Fairfax, Va.

Schumer also suggested that Lockheed arrange for Blair to call Bush directly just before the final decision is made. Aboulafia believes the contract will go to Stratford, Conn.-based Sikorsky unless Blair weighs in even more.

"What this comes down to is Tony Blair picking up the phone ... and quite possibly George Bush deciding that he owes nothing to Lieberman's home state," Aboulafia said, referring to Democratic Sen. Joe Lieberman, Connecticut's junior senator.



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