Northrop Grumman, Finmeccanica team up for U.S. helicopters

Reuters — Northrop Grumman (NOC.N: Quote, Profile, Research, Stock Buzz) and Italy’s Finmeccanica SpA’s (SIFI.MI: Quote, Profile, Research, Stock Buzz) AgustaWestland on Tuesday 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 two companies 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.

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 site for assembly of the helicopters in the United States, but declined to name it.

He said AgustaWestland would initially ship the helicopters to the U.S. facility, where Northrop would integrate U.S. avionics and other equipment. He said the helicopter would have at least 50 percent U.S. content, 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 production at a future point.

The announcement marks a sharp turn for AgustaWestland, which was previously teamed with Lockheed Martin Corp (LMT.N: Quote, Profile, Research, Stock Buzz) 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.

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.

Sikorsky Aircraft, a unit of United Technologies Corp (UTX.N: Quote, Profile, Research, Stock Buzz), Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz), and Textron Inc’s (TXT.N: Quote, Profile, Research, Stock Buzz) Bell Helicopter are also interested in bidding for the helicopter orders — among the few bigger competitions available in the United States.

Meyer and Spagnolii said the new teaming agreement made sense given the 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.”

The teaming announcement comes a week after Britain’s BAE Systems Plc (BAES.L: Quote, Profile, Research, Stock Buzz) and European aerospace group (EAD.PA: Quote, Profile, Research, Stock Buzz) said they were in advanced talks about a merger.

Spagnoli 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 discuss anything else at this point in time.”

By Andrea Shalal-Esa
Original posting in Reuters on September 18, 2012

Reuters | Northrop Grumman, Finmeccanica team up for U.S. helicopters

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