European Firm to Team With Northrop in Bid
Northrop Grumman Corp. is teaming up with Europe’s largest defense contractor to compete for a $2-billion Pentagon contract to build the Air Force’s next-generation search-and-rescue helicopter.
It marks the latest move by European firms to penetrate the lucrative U.S. defense market. For decades, the Pentagon has been reluctant to give foreign companies much more than token contracts for parts and supplies, but European firms now are hoping for a bigger share of the pie.
Century City-based Northrop announced Wednesday that it would collaborate with European Aeronautic Defense & Space Co. to enter EADS’ Eurocopter helicopter in the Air Force competition.
EADS is a Dutch-based consortium of French, German and Spanish companies. EADS also holds an 80% stake in Airbus, the French aerospace firm that recently surpassed Boeing Co. as the world’s largest commercial airplane maker.
EADS’ U.S. operation is headed by Ralph Crosby, a former Northrop executive. He previously ran Northrop’s sprawling military aircraft division in El Segundo and led the development of the B-2 stealth bomber.
Under his direction, EADS also has pushed hard to supply the Air Force with aerial refueling tankers. The $23-billion contract for the tankers was initially awarded to Boeing but is now under review because of an ethics scandal.
In the helicopter project, Northrop would be the prime contractor while EADS would be responsible for building the helicopter.
EADS’ Eurocopter unit developed one of the first “fly-by-wire,” or computerized, helicopters with improved controls.
The contract is to replace the aging HH60G Pave Hawk helicopters built by Sikorsky, a unit of United Technologies Co. The average age of the helicopters is 14, and the Air Force wants to buy 132 new choppers. The Pave Hawk helicopters have been used mainly by the Air Force to rescue downed pilots, usually behind enemy lines. But in recent years, the military has used the craft also to transport special operations personnel in hostile areas.
The Air Force wants to have the first helicopters flying by 2010.
Northrop already has a joint venture with EADS to sell a version of Northrop’s Global Hawk spy plane in Europe.
Transatlantic collaboration between U.S. and European defense firms have grown, analysts said, since the Sept 11, 2001, terrorist attacks. “While U.S. and European companies have always teamed up and gotten along well, the political rhetoric has increased,” said Jon B. Kutler, president of defense investment bank Jefferies Quarterdeck.
Two other teams will be competing to win the helicopter contract: Lockheed Martin Corp. is collaborating with a British-Italian helicopter maker. The other bidder is Sikorsky, a longtime U.S.-based helicopter maker.
All the companies have vowed to assemble the helicopter in the U.S.
The competition is likely to increase attention on another bid by European firms to build helicopters for the Navy, which wants to replace its fleet of Marine One helicopters used by the president. AgustaWestland, a British-Italian helicopter maker, has teamed up with Lockheed to compete for the $1.3-billion contract.
Northrop shares were down 15 cents at $51.50 on the New York Stock Exchange.
