Sikorsky buying Poland aircraft maker

Stratford-based Sikorsky Aircraft announced Wednesday it is expanding its foreign operations by buying aircraft-maker PZL Mielec of Poland for an estimated $84 million.

PZL Mielec is a wholly owned government business that makes civilian and military passenger and cargo planes. Sikorsky's move would almost have been unthinkable 20 years ago, said Forecast International Defense Analyst Raymond Jaworowski. "It's an example of globalization," Jaworowski said, adding he doubts a foreign-based corporation could acquire a U.S. defense contractor like Sikorsky.

For a reminder of how far Poland has come, the U.S. State Department's Web site describes that country's struggle with the Soviet Union over the nation's economy only 20 years ago. Workers staged multiple strikes in the 1980s as prices for meat and other goods continued to rise. At one point, Soviet tanks and soldiers assembled on the Polish border preparing to roll into the country and put down a revolt; martial law was instituted. It wasn't until 1989 that Poland began to have regular contact and diplomatic ties with the United States. Sikorsky's press release said Poland is a growing base for it and its sister companies owned by Hartford-based United Technologies Corp. In all, UTC has more than 7,000 employees in Poland, according to Sikorsky. Shares of UTC closed up 22 cents to $62.69 in Wednesday trading on the New York Stock Exchange.

Just a month ago, Sikorsky announced an agreement with PZL Mielec to build he international version of its Black Hawk military helicopter.

The acquisition also pushes Sikorsky even further into making airplanes. Mielec is Poland's largest airplane maker, with 1,500 employees, according to Sikorsky. This builds on the Stratford helicopter company's 2004 purchase of airplane maker Schweitzer Aircraft.

Wednesday's deal is not expected to negatively affect jobs in Connecticut, according to Jaworowski.

Sikorsky has so much U.S. military work in Stratford, he said, it needs to buy more factories to give it the capacity to meet the demands of foreign and commercial markets.

Paul Nisbet, principal of JSA Research, said the European move makes sense for Sikorsky because "They have not done very well there."

Sikorsky has lost several head-to-head competitions to European-based helicopter makers, Nisbet said, but this purchase gives Sikorsky a European plant. He said Poland might also give Sikorsky a competitive advantage over European rivals who face high labor costs, because Poland's wages are lower than other European nations. And, like other Eastern European countries, it appears to have a large pool of engineers, he said.

"This investment establishes PZL Mielec as a key component of Sikorsky's long-range global strategy to meet worldwide demand for its products and services," said Sikorsky President Jeffrey Pino in a statement.

One foreign contract Pino might have his eyes on is the $500 million Turkish heavy lift contract that country announced Tuesday.

Sikorsky spokesman Edward Steadham said the company is reviewing the specifics of the Turkish contract, which would be for 10 helicopters, and has not yet decided whether to bid on it or not.

Doug Royce, another Forecast International analyst, said Sikorsky has done well in Turkey.

The Turkish military operates a fleet of Black Hawks and Sikorsky won a naval Sea Hawk contract in 2006.

Royce, however, said Sikorsky's CH-53 Super Stallion, which some analysts say would be the logical choice to enter in the competition, may not be available. Sikorsky is redeveloping the CH-53 for the U.S. Marine Corps and would not have a model available for the Turks until about 2014, Royce said, so entering the contest might depend upon when the Turks want the helicopter. Rob Varnon, who covers business, can be reached at 330-6216.

Source:connpost.com