Pino views radical X2 project as a potential key to Sikorsky’s future

 - March 19, 2007, 10:05 AM

While the S-76 and S-92 will remain Sikorsky’s bread and butter for some time to come, the company is also launching a new age of vertical lift technology, which it is calling the X2.

Sikorsky announced the X2 program at Heli-Expo 2006, claiming its clean-sheet airframe design and counter-rotating blades would allow the helicopter to reach speeds of 250 knots or more while retaining true helicopter heavy-lift capability.

For much of the last year, Sikorsky executives and engineers held fast to their claim that a demonstrator aircraft would fly by the end of the year, but for a variety of reasons, that did not occur.

Sikorsky president and CEO Jeffrey Pino talked about the company’s product line, its vision for the X2 and the role each will play in the company’s future.

Did Sikorsky move too quickly publicizing the X2 program by announcing that it would fly by the end of last year? If you had to start over with the X2, would you do anything differently?

With cutting-edge prototypes, announcing specific dates is always kind of risky. But at the time we felt very confident in our science. The aircraft has been through ground run, but we’ve outpaced our supply chain a bit and slowed down as a consequence.

One thing people don’t understand is that while it’s a small demonstrating prototype, this is a fly-by-wire aircraft. You don’t put a person in fly-by-wire until you’re absolutely ready to do it. We probably would not release so specific an announcement in the future.

How important is the X2 to the future of Sikorsky?

It’s clear to us that the players in the next 20 to 30 years are going to have some new technologies in their stable. But I think it’s time that the whole industry take a hard look at advancing the state of the art. It was our decision to do this by changing the paradigm of speed. We think that our niche will be 240 to 260 knots, maybe a little faster, with true helicopter capability.

We don’t build single-engine small helicopters or light twins, and I’m not convinced, given the crowded nature of that marketplace, that’s where we’ll go. But let’s get some more data around this product and see where it goes. We think it has applications for manned, unmanned and commercial military, and we’re proving that the technology here is very scalable. X2 really means “times two.” It’s the suite of technologies all designed around the counter-rotating, tandem rotor system.

Where do you see the the X2 positioned in the market against Bell’s next-generation Modular Affordable Product Line technologies?

I think what Bell is doing is trying to solidify their position in the low end of the marketplace. They’ve got intense pressure from Eurocopter, and MAPL is clearly their answer to that. But it’s a conventional helicopter. I don’t really see the X2 and MAPL as competitors.

Sikorsky’s military product line has received a lot of attention, and a lot of business. How are the commercial versions of the S-76 and S-92 doing, and what kind of order backlog is the company experiencing?

Our sales clearly remain at an all-time high. Next year we’ll deliver S-76s at a rate of about one a week. Our backlog reaches well into next year. The S-76C++ is the current offering and it is what it is at this point. We just finished some falling and blowing snow tests to complete the icing certification. One of the things that has helped us with C++ sales is the fact that we’ve announced our D model. This model will have full de-icing capability, and the most advanced cockpit in a commercial helicopter. We’re still looking at certification in 2009 [for the D model]. We have position agreements or early orders for the D, running in the double digits, with lots of conversations going on with customers for more.

The S-92 is doing very well also. We have more than 100 orders and options, well into 2008. We have virtually every market for which we launched the aircraft. The oil market has clearly accepted the aircraft, as well as VIP and head-of-state, and we’re really excited that we’re moving into search-and-rescue. Canadian Helicopter Corp. will have its search-and- rescue helicopter at [our Heli-Expo booth (No. 2339 and 2747).]

Even though we have a pretty full order book, we always keep a couple of “presidential strategic slots” available in case one of those really important customers wants one really quickly. We used to sell eight helicopters a year and be very excited about it. We’re becoming a pretty viable company here.

Sikorsky’s military and commercial aerospace products each account for about 20 percent of the company’s overall business, with the commercial side having a slight advantage. During the last year it seems that Sikorsky’s military business has gained more attention overall. With President Bush ordering additional troops sent to Iraq, how do you see those numbers trending over the next few years?

We’ve created a really significant commercial business that can fund its projects, and we’re trading technology back and forth. The vibration system that’s going on the new Black Hawk came from the S-92, for example. I don’t really see a competition for resources. There’s also quite a bit of segregation within the company. We have just really been blessed with a future in the military business. We’ve got literally thousands of helicopters to build, plus new variants. We’re loaded militarily right now. And that really helps your commercial business and the synergies.

Tell me about Sikorsky’s supply chain and how well it’s functioning. Does the demand for parts to service military units drain the supply pool for commercial units?

I think we’re a little different from some of the other manufacturers. At UTC [Sikor-
sky parent company United Technologies Corp.] we tend to buy ahead on precious metals and that kind of stuff, so we don’t have a lot of that problem. Our supply chain problems are simple and clear. This ramp-up of military helicopters has put a strain on where we’ve always historically built them, here in Stratford [Conn.]. During the day shift, we don’t have any more parking spots.

Our supply chain revolves around deciding what’s important to us, which is final assembly, flight dynamics and flight test, and moving the rest of that stream out of here, including most of the sheet metal, fuselage and assembly. Our supply chain has been about developing our vertically integrated factory. But aviation is unique in that to make an aviation bolt you have to qualify the source, test the bolt, fly the bolt and then you build the bolt. If the aviation industry decides to change its supply chain, it takes six months to a year. It’s a tremendous up-cycle for the whole industry.

We’re already seeing the benefits of what was an arguably difficult 2006 in getting these things established. We’re looking at an overall 50- to 60-percent increase in production over last year. I feel good because the fourth quarter demonstrated we could do it.