Amid Contract Dispute Over Next-Gen Helo, Manufacturer Tightens the Belt

Sikorsky has begun layoffs of non-union employees at its New Haven, Connecticut facility after apparently losing out on a major government contract to rival Textron subsidiary Bell Helicopter.

The Future Long Range Assault Aircraft Program is currently on track to develop the Bell V-280 Valor, a tiltrotor aircraft chosen over Sikorsky's more traditional pusher prop/ dual rotor equipped Defiant X helicopter. While the company, in typical defense industry fashion, has protested the decision, they may not like their chances. In a similar move, Sikorsky's parent company Lockheed Martin announced the elimination of 800 jobs in its rotary and mission systems divisions.

A Lockheed spokesperson said that the decision was the result of decreased production plans, stating “We intend to retain as many as possible who can fill our open business-critical positions in our Rotary and Mission Systems business segment and across Lockheed Martin and will continue to hire for roles that are required to support our customers’ urgent national security missions." 

The loss of the Defiant X may have been a let down for the manufacturer, but other irons in the fire mean there's more business remaining on the table. An Army contract for a new scout helicopter is still up for grabs, with the competition waiting on a GE Aviation engine to begin fly-offs with rival Bell. Current contract work includes the Black Hawk, the King Stallion, and the Jolly Green II.

Jay Malave, CFO, applied some verbal salve during an investment conference with JPMorgan Chase, saying "When you look at where we are with CH-53K, between now and 2027 the revenues will double, so that'll be a big driver." Still, there's a vague sense of disappointment regarding the loss to Bell, given the somewhat long odds of an upset on the contract decision.

"The upside from there," added Malave, "would be if we are successful with FLRAA."

FMI: www.lockheedmartin.com