Boeing’s [BA] top defense executive believes that less demand coupled with the possible return of sequestration could force some consolidation in the military helicopter business.
“If, depending on how the next year or two of decisions go with sequestration, that could very well be the case,” Chris Chadwick, president and CEO of Boeing Defense, Space & Security, told Defense Daily
in an interview. “Supply and demand.”
Chadwick added that he believed Boeing will remain in good shape through the end of the decade based on sales of the AH-64 Apache, CH-47 Chinook and V-22 Osprey, to the Pentagon as well as with international opportunities.
“We’re pretty well positioned to the end of the decade, at least, with those three product lines and high customer demand,” he said.
Congress has passed legislation that lifts sequestration through 2015, but the draconian budget cuts could return in 2016 if lawmakers cannot agree on a long-term spending blueprint.
Chadwick is not the only one to make similar observations about the possible future state of the helicopter industry.
Sergei Sikorsky, the son of Sikorsky founder Igor, told reporters in May that he believes that at least one manufacturer could be out of business within 10 years, citing a downturn in research and development funding and fewer new programs.
“I personally think that probably we’ll see at least one manufacturer going out of business,” he said. He also said, however, he sees opportunities to bring technology developed for the military, such as fly-by-wire, to the commercial market to generate business.
“The encouraging thing here is that a lot of that technology we are developing now for the military will wind up in civilian machines as well,” said Sikorsky, who serves as an ambassador to the company that is a subsidiary of United Technologies [UTX].