Build the equivalent of 237 birds — 172 helicopters and $390 million worth of spare parts — and collect an extra week's pay as a bonus at the end of the year, Finger wrote his managers and engineers.
That lofty goal could be difficult to reach with an estimated 3,600 unionized production workers on the picket line, according to aerospace industry analysts.
"There is a very high likelihood that Sikorsky is already falling behind," said Loren Thompson, an analyst with the Lexington Institute in Arlington, Va. United Technologies Corp. "manages its business units for peak efficiency, which means there is never any slack in the system," Thompson said.
The Teamsters Local 1150 went on strike last week after rejecting a three-year contract offer from Sikorsky. A subsidiary of UTC, Sikorsky employs about 3,500 Teamsters and 6,000 salaried workers in Connecticut.
About 3,600 Teamsters working in Stratford, Bridgeport, Shelton, West Haven and West Palm Beach, Fla., took to the picket line for the first time in more than 40 years, mainly over health benefits. The company wants to raise medical co-payments and health insurance contributions.
Ed Steadham, a company spokesman, says the factory remains open and engineers and supervisors
"We are working on aircraft," Steadham said.
Rocco Calo, secretary-treasurer of Local 1150, doesn't buy it. "The company can tell you that white collar workers are there, but no wrenches are being twisted. Nothing is being done as far as production goes," Calo said.
Thompson expects that Calo is closer to the mark than Steadham. Although some of the engineers and supervisors have previous production floor experience, the skills required to assemble a helicopter are specialized and any errors could be catastrophic.
"Bringing in somebody from management to install that rotor blade doesn't seem [likely]," Thompson said.
There is also little likelihood that Sikorsky could farm out the work, he said.
"You can't just bring in an electrician or plumber and hope they can install this very technical equipment," Thompson said. "They could make mistakes that could come back to haunt you."
Richard Aboulafia, an analyst with the Teal Group in Fairfax, Va., said Sikorsky may have trouble keeping up with its aggressive production schedule if the strike drags on for more than a few weeks.
"If it is a couple of weeks, they could ride it out with no problem but beyond that it would really hurt," Aboulafia said. "I don't think they could do volume production but maybe they could finish what is in the pipeline now."
Sikorsky's largest customer — the Pentagon — is keeping a close eye on the situation — something it routinely does, strike or not.
Feds are watching
The Defense Contract Management Agency has about 130 employees at Sikorsky who manage contracts worth an estimated $9.1 billion. It is the agency's job to ensure that helicopters and spare parts are delivered on time, within cost, and to the contract specifications, Lt. Cmdr. Matt Edwards, operations officer for DCMA Sikorsky, wrote in an August 2005 article.
Art Forster, director of congressional and public affairs at the agency, says staff has reviewed Sikorsky's contingency plan to mitigate the effects of the strike on government contracts.
"DCMA will be monitoring developments closely to assure that all work performed on government aircraft and spares is in compliance with existing contract and safety specifications," the agency said in a statement.
The Army has told Sikorsky that it wants spare parts ahead of new birds.
"We have told them our top priority is sustainment of the Black Hawks used by soldiers in the global war on terror," said Bob Hunt, a spokesman for Army Aviation and Missile Command in Huntsville, Ala. Last July, Sikorsky signed a contract for $75 million for various spare parts for Army, Navy, Air Force, Marine Corps and other federal agency helicopters.
Beyond spare parts, the Army wants to make sure that helicopters going into Afghanistan and Iraq have been modified as required and that those returning from war are refurbished to "pre-war condition."
Hunt said he is not aware of any delays in delivering product to the Army. If there were any — or if Sikorsky were having problems obtaining parts from vendors — the DCMA staff who work in the factory would be on top of it, he said.
"We are at war," Hunt said. "There's no room for patience." Bill Dane, a senior aerospace analyst for Forecast International in Newtown, says he heard "vague rumblings" about 18 months ago that Sikorsky was having vendor supply problems but was not able to substantiate it. If it were a chronic problem, he said, it would be out in the public.
Dane also says the Pentagon has turned to multi-year contracts, which should make it easier for vendors and subcontractors to keep up.
"They wanted to get away from that boom and bust," Dane said. Contracts coming due
The Pentagon has signed more than 75 contracts with Sikorsky since 2001, most of which are due to be completed by the end of 2007, according to a Connecticut Post review.
The majority of the $2.9 billion in contracted work would be performed in Connecticut — $2.6 billion in Stratford and $142 million elsewhere in the state. Outside of Connecticut, the contracts include $105 million in Florida, $9.4 million in Alabama and $83 million that was not identified by location.
Among the contracts due to be completed this month are:
? $21.6 million for UH-60M medical evacuation helicopter signed in May 2001 for Stratford;
? $13.2 million for overhaul and upgrade of the UH-60 CAT IV main rotor blades signed in September 2005 for Bridgeport;
? $7.2 million for upgraded armament controls, target systems and mounted sights forUH-60 helicopters signed in January 2003 for Stratford;
? and $4.9 million for four multifunction displays and a 701D Engine Improved Hover Infrared Suppression System signed in February 2002 for Stratford.
Contracts due to be completed in March are:
? $84.4 million for four MH-60R helicopters signed in March 2004 with 95 percent of the work to be done in Stratford and 5 percent in Troy, Ala.;
? $17.4 million for overhaul, repair and modification of the UH-60 "L" model transmission signed in September 2004 for Stratford;
? and $7.9 million for overhaul, repair and modification of the UH-60 "A" model transmission signed in September 2004 for Stratford.
Sikorsky also has ongoing commitments for production of Army UH-60L and UH-60M helicopters and Navy UH-60S helicopters. In January, the Army signed a $400 million contract for Sikorsky to produce an additional 20 Black Hawk variants this year and 21 more in 2007.
Production of military helicopters is expected to steadily increase worldwide through 2013, according to a report released earlier this month by Forecast International. The report estimates that 6,253 helicopters valued at $96 billion will be produced during the next decade. Sikorsky is expected to lead the market despite the company's highly publicized loss of the Marine One contract.
"Obviously, the Teamsters are counting on all that work to create a problem that management can only solve by caving in to their demands," Thompson said.
Defense manufacturers are in a tight spot, particularly in wartime when demand is so high.
"It is impossible to break the union without creating massive dislocation in the production of helicopters," Thompson said.
"America has a handful of helicopter companies and they are all at a pretty high level of production now. So, you would be hard-pressed to find people in key skill areas that are up-to-date and available. These are very specialized skills."
Aerospace analysts say there are no signs that Sikorsky is looking to shift its main production lines out of Connecticut despite recent acquisitions of smaller out-of-state helicopter manufacturers.
Paul Nisbet, an analyst with JSA Research, Inc. of Rhode Island, says it would be "prohibitively expensive" to move a production line even if there were suitable factory space readily available.
"It is not even being considered," Nisbet said.
"I think that is basically propaganda," Dane, who lives in Stratford, said of a possible move of Sikorsky operations. "I've never heard anything of substance that they would do such a thing. Any major move of a program would disrupt their production schedules more than a strike."
Calo also doubts the company would shift its production out of Connecticut.
"I can't see that happening. I know our congressional delegation would go absolutely ballistic if they did something like that. They have fought so hard to keep jobs here," he said.
A shared vision
Calo said that the union shares Finger's long-term vision to double the company's business by 2015. They hope the strike does not impede that progress.
"A huge Air Force decision is coming up pretty soon and we are in the running for that. This isn't helping and that weighs on our mind," Calo said.
The Air Force is expected to award a contract in August for its Combat Search-and-Rescue aircraft program to replace its HH-60 Pave Hawk helicopter fleet. It plans to purchase 140 combat helicopters at a cost of between $8 and $10 billion. Sikorsky is bidding its HH-92 Super Hawk.
Aboulafia does not anticipate the labor strike will have any impact on the Air Force contract.
"Six months ago, Lockheed Martin was on strike. It is par for the course," Aboulafia said.
Last April, workers who assemble F-16 jet fighters at Lockheed Martin Aeronautics Co. in Fort Worth, Texas, were on strike for two weeks over health-care benefits before members of the International Association of Machinists and Aerospace Workers District Lodge 776 accepted a new contract offer.
And, about 1,000 IAMAW workers recently ended a three-month long strike at Boeing sites in California, Florida and Alabama, where medical costs proved a major hang up in the contract negotiations.
Steadham said Sikorsky does not see "the present situation" playing any role in the Air Force decision.
As to whether Sikorsky can meet its long-term production goal, Dane said it is anybody's guess.
"A lot is out of their hands," he said. "But if the opportunity came their way, I am sure they could rise to the occasion."
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