UPDATE 3-Boeing, Sikorsky team up for new US military helicopter

Fri Jan 18, 2013 1:47pm EST

* Companies also worked together on canceled Comanche

* Army project to lay groundwork for bigger Pentagon program

* Executives say they're "in it for the long haul"

By Andrea Shalal-Esa

WASHINGTON, Jan 18 (Reuters) - Boeing Co and Sikorsky Aircraft, a unit of United Technologies Corp, said they were teaming up to develop a next-generation, multi-purpose helicopter for the U.S. military.

The long-term strategic teaming agreement, signed Jan. 13 and announced on Friday, reunites two of the biggest U.S. helicopter manufacturers, who often compete for orders but joined forces to build the Comanche, a U.S. Army helicopter program that was canceled in 2004.

Sikorsky, the maker of the UH-60 Black Hawk utility helicopter, and Boeing, which builds Apache attack helicopters, plan to submit a joint proposal in response to an Army technology demonstration project unveiled earlier this month that will fund preliminary design plans for the new aircraft.

The Army program will lay the groundwork for the Pentagon's Future Vertical Lift program - a massive project that will ultimately replace more than 4,000 medium-lift helicopters used by various U.S. military services.

Boeing and Sikorsky will compete with other industry teams to build and fly one or more demonstrator aircraft in 2017, which would then be evaluated for the bigger program.

"This is the beginning of a long-term strategic partnership that will make Boeing and Sikorsky the biggest actors in the global military helicopter business," said Loren Thompson, a Virginia-based defense consultant and chief operating officer of the Lexington Institute think-tank.

He also said the move reflect the dearth of new development programs across the military.

COMPANIES SEE BENEFIT IN TEAMING UP

Officials from Sikorsky and Boeing said joining forces would help the companies deliver an innovative, affordable helicopter.

Samir Mehta, president of Sikorsky military systems, told reporters that both companies would invest significant amounts of their own money into the development effort.

"We're in it for the long haul together on this program," he said. "This really is 'one plus one equals three' from a technology standpoint."

Executives from both firms declined to give any details about what kind of aircraft they would propose since the competition is already under way. They said the partnership would not affect teaming deals they have with other companies on other programs, but declined comment on whether they could submit separate solo bids or bids with other partners.

"Our teaming agreement is the continuation of a longstanding relationship between Boeing and Sikorsky and reflects a common vision for the future of Army aviation," Chris Chadwick, president of Boeing Military Aircraft, said in a statement.

By pooling their resources, the aerospace companies will be able to offer the military "a revolutionary capability for the warfighter at an affordable cost for the U.S. taxpayer," said Mick Maurer, president of Sikorsky.

The Army launched the technology demonstration project earlier this month, saying it would support the Pentagon's program to develop the next generation of vertical-lift aircraft with greater performance, reliability and affordability.

Thompson said the Boeing-Sikorsky agreement could spur other companies in the sector like Bell Helicopter, a unit of Textron Inc and AgustaWestland, a unit of Italy's Finmeccanica SpA, to consider their own teaming agreements.

"If the two biggest helicopter makers get together, they become nearly unbeatable in the marketplace and their competitors are at a real disadvantage," he said.

Sikorsky is teamed with Lockheed on the MH-60 helicopters it builds and services for the U.S. Navy. The two companies are also working together on a bid to build a new search and rescue helicopter for the Air Force.

Sikorsky and Boeing also dominate the heavy-lift helicopter segment. Sikorsky is building a new CH-53K helicopter for the Marine Corps, while Boeing builds twin-rotor Chinooks.

Sikorsky spent $50 million of its own money to develop the X2 helicopter, which is considered the fastest helicopter ever built, and is spending multiples of that amount to work on the S-97 Raider, a larger military prototype.

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