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Air Force Helicopter Deal Keeps 500 Jobs at Philly-area Boeing and Leonardo Plants, Suppliers

September 26, 2018
In The News

The U.S. Air Force on Monday awarded an initial $325 million contract to replace 1960s-era UH-1N (Huey) helicopters, which patrol and defend nuclear weapons facilities, with MH-139 helicopters built at two plants in the Philadelphia area.

The new aircraft will be assembled at the Italian-owned Leonardo helicopter factory in Northeast Philadelphia, and outfitted with weapons and other military systems at the Boeing helicopter factory in Ridley Township. The military MH-139 is based on Leonardo's civilian AW-139 helicopter. Leonardo says it has made more than 900 AW-139s, in Philadelphia and at other plants, for 270 clients, including government agencies, oil prospectors, and police.

The contract is the "first portion" of an eventual $2.38 billion procurement, Heather Wilson, secretary of the Air Force, said in a statement. Boeing expects the Air Force to buy up to 80 more of the helicopters, plus training and support equipment. Boeing and Leonardo beat a version of rival Lockheed Martin's Black Hawk helicopter and other bidders to win the deal.

If the contract survives a potential challenge by Lockheed Martin or other disappointed bidders, the job will keep 500 employees busy at the Leonardo and Boeing factories in the Philadelphia area and at their suppliers around the U.S., said Jerry Drelling, a Boeing spokesperson.

"This contract may usher in a period of expansion" at Leonardo, spokesperson Margaret Rogalski said, but it's "too soon" to project new hires. She said the first aircraft should be delivered in fiscal year 2021. Leonardo's local workforce includes mechanics, pilots, and engineers, as well as sales, marketing, finance, and other business people.

"It's not going to ramp up hiring" at Boeing, but the new Air Force contract will keep workers at the Delaware County facility busy "militarizing" the ships after they are built at Leonardo's factory, Boeing's Drelling said.

Philadelphia-area Democratic and Republican elected officials had joined forces in support of the MH-139, which Boeing officials said would keep costs down by using readily available "off the shelf" parts instead of custom-made pieces.

It almost didn't happen for the Philadelphia plants. Last year's National Defense Authorization Bill had initially called for a one-company "sole-source" contract, according to U.S. Rep. Brendan Boyle (D., Pa.), who represents Northeast Philadelphia. After Boyle filed an amendment, the Air Force agreed to open the process, making possible the joint bid.

The Pentagon has wanted to replace the Hueys after deciding they were obsolete a decade ago, but it took that long for Congress and military officials to decide on what to do.

Secretary Wilson cited the "strong competition" between the Boeing-Leonardo team and its rivals with saving the government $1.7 billion off the initial expected $4.1 billion price of the new helicopters.

"The new helicopter will be an important tool for airmen charged with securing and defending the nation's intercontinental ballistic missiles," the Air Force added in its statement.

"It's also ideal for VIP transport," said David Koopersmith, head of Boeing's Vertical Lift division.

Both Boeing and Leonardo have upgraded their Philadelphia-area plants in recent years.  The Boeing works at Ridley employs more than 4,000, who mostly build and refurbish Chinook military helicopters for the U.S. and allied governments, and also make Osprey tilt-rotor aircraft. The Leonardo plant, near Northeast Philadelphia Airport, employs around 560, making mostly civilian aircraft.

"The more than $125 million investment made by Leonardo in the Philadelphia facility" shows the company is ready to build ships for the Air Force, William Hunt, chief executive of Leonardo's subsidiary here, AgustaWestland Philadelphia Corp., said in a statement.

"We are extremely proud," added Alessandro Profumo, chief executive of parent company Leonardo. He said the deal is proof Leonardo can "meet the most stringent requirements" and is a "strong, reliable partner" for U.S. aircraft-makers and clients. The company changed its name from Finmeccanica after top executives were charged in a 2014 bribery trial in Italy; their convictions were later reversed on appeal.

Lockheed Martin makes Black Hawks at a factory in Elmira, N.Y. That company also owns the Sikorsky helicopter factory near Coatesville, which mostly makes civilian aircraft.