The health of the defense industrial base (DIB) continues to be a concern for the Department of Defense and U.S. lawmakers. The end of the Cold War saw a major contraction in the size of the defense industrial base and the number of major defense companies. As defense budgets declined, programs were truncated, extended or even terminated. Defense companies merged and some even left the sector entirely. Recent increases in defense spending due in large part to the events of 9\/11 and the war in Iraq have been insufficient to return the DIB to its former relatively robust state. Projections for future defense budgets and anticipated procurement plans have provoked concerns regarding some sectors of the DIB and certain producers of defense goods.<\/p>\n
One sector where observers have expressed some concerns is military helicopters or rotorcraft. Currently, there are four \u201cmajor\u201d prime contractors for helicopters in the United States: Sikorsky, Bell, Boeing and now Lockheed.These companies make up over 75 percent of the world production capability for military and commercial rotorcraft.<\/p>\n
Each of the U.S. manufacturers is producing and supporting a number of military and\/or commercial helicopters. Sikorsky is responsible for the military\u2019s UH\/MH-60 and CH-53 helicopters. Bell produces the UH-1Y and AH-1Z for the Marine Corps and is co-developing the V-22 tilt-rotor aircraft with Boeing. Boeing\u2019s major products are the AH-64 Apache and the CH-47 Chinook. Each of these programs has recently been selected on a sole-source basis for not only major upgrades but also for the production of a substantial number (hundreds) of new helicopters. Lockheed Martin won the Presidential helicopter (VXX) competition with the US101 for 23 helicopters. Pending military helicopter contracts \u2013 the armed reconnaissance helicopter (ARH), light utility helicopter (LUH) and personnel recovery vehicle (PRV) \u2013 will expand current demand. Finally,most of these companies have plans for new commercial vehicles, some based on their successful military designs.<\/p>\n
This is not a sector that is in danger. There is very strong demand for helicopters within each of the military Services. The four prime contractors are all in good financial condition. They have a stable base of orders from existing contracts, including new production, remanufacture and upgrades. Moreover, the potential market is likely to increase significantly over the next decade giving each an opportunity to grow their business. Therefore, the Department of Defense can be confident that with a competitive acquisition process this sector will serve DoD\u2019s needs well.<\/p>\n
Dr. Daniel Gour\u00e9 is Vice President of the Lexington Institute and an Adjunct Professor at Georgetown University and National Defense University.<\/p>\n