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December 8, 2022

Sikorsky helicopter contract loss unsettles CT supply chain

ERICA E. PHILLIPS / CT MIRROR Gov. Ned Lamont speaks at Lockheed-Martin's Sikorsky in May 2022, where he signed a tax incentive agreement between the company and the state.
By Erica E. Phillips, CT Mirror

Just off the Merritt Parkway in Stratford, on the western bank of the Housatonic River, sits one of Sikorsky’s iconic Black Hawk helicopters and the company’s manufacturing facility in the distance beyond it. A conspicuous sight for drivers-by, the aircraft represents one of Connecticut’s most heralded exports — along with the hundreds of small manufacturing businesses and thousands of skilled workers it has taken to produce since the first UH-60 Black Hawk aircraft came off the line in the 1970s.

The Army is now phasing out the Black Hawk, and it has turned to Texas-based Textron Inc.’s Bell to develop and construct its replacement future long-range assault aircraft — a contract worth $1.3 billion to start and up to $7.1 billion for an initial round of production. Over the coming decades, as the Army procures more of the new-model assault helicopters, that number is expected to grow.

Lockheed Martin’s Sikorsky, in a partnership with Boeing, was Bell’s only competition for the bid.

In a statement Monday, Army officials said they “followed a deliberate and disciplined process in evaluating proposals to ensure rigorous review and equitable treatment of both competitors.”

A Sikorsky spokesman said in an emailed statement that the company believes the “Defiant-X,” developed with Boeing to replace the Black Hawk, “is the transformational aircraft the U.S. Army requires to accomplish its complex missions today and well into the future.” The statement went on to say that the company is reviewing feedback from the Army and evaluating its next steps. Sikorsky and Boeing could appeal the decision depending on what they learn. 

Monday’s news came as a shock to many of Connecticut’s smaller manufacturing businesses that supply parts, materials and services to Sikorsky.

“For all the suppliers building components for that aircraft, it’s a huge blow,” said Brian Montanari, president and chief executive of HABCO Industries in Glastonbury, which supplies equipment and services to Sikorsky. “It’s something that those of us that are in the Sikorsky supply chain were really looking forward to them winning.”

Chris DiPentima, chief executive of the Connecticut Business and Industry Association, said, “We’re all a little shocked right now, we’re probably going through the seven stages of grief.” 

By Tuesday morning, DiPentima said he was fielding calls from manufacturing companies, as well as service providers to those businesses, such as accountants, lawyers and construction firms. “They all know how big a deal this is,” he said. Manufacturing accounts for roughly 10% of the state’s economy, and every manufacturing job supports up to five other jobs in the state, DiPentima said. 

U.S. Rep. Rosa DeLauro, D-3rd District, said in a statement she was "disappointed," adding that she intended to seek more information from the Army on what went into the decision. “I will continue to fight like hell to ensure Sikorsky, and other organizations and companies in Connecticut, receive funding opportunities that support our workers and our economy — and that ultimately preserve jobs,” the statement read.

CT's defense-industrial base

Major contracts with the Department of Defense are the driving force behind Connecticut’s manufacturing sector, generating thousands of jobs at the state’s big three companies — Sikorsky, General Dynamics Electric Boat and Raytheon Technologies’ Pratt & Whitney — and thousands more at those companies’ suppliers. 

Earlier this year, state lawmakers passed emergency legislation providing up to $75 million in tax incentives to Sikorsky were the company to win the Black Hawk replacement contract as well as a second contract to supply the Army’s “future attack reconnaissance aircraft,” or FARA. The latter won’t be decided for another year or so, meaning a portion of the incentive remains available to Sikorsky as long as the company maintains its Connecticut operations, continues its current level of employment and meets certain spending requirements with in-state suppliers.

David Lehman, commissioner for the state department of economic and community development, said he believes Sikorsky “has a real shot at” the FARA bid. He also pointed out that the company has other military contracts underway worth several billion dollars. Those include delivering heavy-lift cargo helicopters, known as the CH-53K King Stallion, to the U.S. Marine Corps, as well as the continuation of the Black Hawk program, which extends through 2027. 

“Our aerospace and defense cluster is very, very strong in the state of Connecticut, and the administration is going to work with companies like Sikorsky to make sure that strength continues,” Lehman said.

Jamison Scott, executive director of industry group ManufactureCT, said he’s confident that Connecticut companies will be able to weather this setback.

“Manufacturers in Connecticut are very lean, very adaptable,” he said. “We’re not just pigeonholed with one company. That’s what’s great about aerospace in Connecticut.”

Companies in the defense-industrial base often face a boom-and-bust cycle of work, and news of a contract lost can be difficult to swallow.

Montanari said that's why it's important for defense manufacturers to branch out.

“It has become the unfortunate par for the course that there are these peaks and valleys in the industry, and that’s why it’s important to be nimble as a company — and as a state — and to be as diversified as possible,” he said.

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