The 'Oval Office in the Sky' Embraces a Global Supply Chain

When, last year, the White House announced it needed a new Marine One presidential helicopter, no one expected the federal government to be an impulse shopper on a deal worth more than $5 billion that the New York Times calls "perhaps the most prestigious" military procurement contract in the world.

For five decades, that honor had gone to Connecticut-based Sikorsky Aircraft, a subsidiary of $37-billion United Technologies Corporation. Keeping the Marine One contract was Sikorsky's highest priority, United Technologies' chief George David told analysts. "This is win or drop dead as far as we are concerned."

The firm's chief competitor emerged as an international, three-company collaboration called Team US101. The prime contractor was Lockheed Martin. Under its supervision, the British-Italian helicopter company AgustaWestland would lead design of the aircraft. Team US101 promised proven safety and a $2 billion savings in research and development.

Sikorsky begged to differ, emphasizing the security issues inherent in US101's foreign-made rotors and gearboxes. When George David of United Technologies appeared on Fox News, host Neil Cavuto highlighted the politics of patriotism. "I don't want to see a French firm carting our president around," he told viewers.

In late January, the military made its announcement: Team US101 got the nod. If all goes according to schedule, the first US101 ready to transport the President will hit the White House landing pad in 2009.

Explaining its decision, the government sidestepped the debate between patriotism and international coalition-building. Though the Sikorsky aircraft met all security and safety requirements, the White House said it simply preferred the larger cabin and greater engine power of Team US101's offering.

Enter the aftermath. Local newspapers from Harvard, Massachusetts to Hemet, California celebrated the news of Lockheed Martin subcontractors made good. "It's a great day for Maryland and a great day for the Marines," said Chris Foster, deputy secretary of the Maryland Department of Business and Economic Development, in a typical announcement. "Who won? We won." Politicians and editorialists near the offices of Sikorsky and its subcontractors, by contrast, questioned the wisdom and security of "offshoring" and "outsourcing" the President's helicopter. Connecticut Congressman Rob Simmons, a member of the House Armed Services Committee, and James P. Hoffa, general president of the International Brotherhood of Teamsters, warned Hartford Courant readers that the Navy's decision risked "the well-being of U.S. defense workers and the broader U.S. aerospace industry."

Yet, "Buy American" must mean more than the return address on corporate letterhead. For all their flag-waving, the Connecticut representatives would be hard-pressed to find any military manufacturer free of foreign ties. Sikorsky, for example, has formed a local light helicopter venture in Shanghai. Its parent, United Technologies, owns or operates outlets in more than 180 countries.

In an era where all product design is international, the supply chain cannot be shrunk on command-even for the Commander-in-Chief.

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