WASHINGTON — In a move that could presage a possible spinoff, United Technologies named longtime aerospace executive Robert Leduc as president of Sikorsky Aircraft on Thursday.
Last month, United Technologies President and CEO Greg Hayes told investors that the company was considering spinning off the helicopter manufacturer, best known for producing Black Hawks. The appointment of Leduc, who retired last year after 35 years with UTC Aerospace Systems, Pratt & Whitney and Hamilton Sundstrand, points to a desire for a smooth transition for Sikorsky.
"Across the aerospace industry, Bob is recognized as a proven leader, and he has the vision and experience necessary to lead Sikorsky today and as its future chief executive officer, should Sikorsky be spun off," Hayes said in a statement.
Hayes had indicated previously that the decision by United Technologies, which also owns aircraft engine maker Pratt & Whitney and UTC Aerospace Systems, to divest Sikorsky Aircraft stemmed from the latter being a platform manufacturer while most of UTC's other businesses are system providers. He conceded that Sikorsky may have flat sales in the near term, but highlighted the H-53 heavy lift helicopter as a future bright spot.
"That will be a great program, but we don't see any real volume until late into 2020s," Hayes said. "So the question is, between now and then, how do you survive?"
Byron Callan, an analyst with Capital Alpha Partners, said Thursday it was a wise move on United Technologies' part to bring in a familiar face to manage the transition.
"When you bring someone back out of retirement, he certainly knows the company. He'd be a steady hand while they go through the transition," Callan said of Leduc.
On its own, Sikorsky, the largest helicopter manufacturer in the US, is still a $7 billion company, big enough to merit a spot on the S&P 500.
"There's no reason this company couldn't be fine on its own. They have some very good legacy core programs," including the iconic Black Hawk, he said.
If United Technologies does decide to spin off Sikorsky, which seems more likely than not, it could be similar to Northrop Grumman's divestiture of Huntington Ingalls Industries, which worked out well for both companies, Callan said.
As a stand-alone company, Sikorsky would face substantial competition from other rotary wing aircraft manufacturers in Europe and America, including Airbus, Boeing and Textron, Callan noted.
"They're going to have to make some important investment decisions," he said. "What's the next generation of rotary wing aircraft going to be like?"
As programs like the Black Hawk eventually wind down, larger companies are going to be forced to decide whether to invest in developing new programs or divesting manufacturing units such as Sikorsky from their portfolios.
"There's nothing wrong with this, it's kind of natural, and you're going to see more of it," Callan said. "Are you in or out? Do you want to double down and grow, or do you want to let someone else manage this?"
As part of the reorganization, current Sikorsky President Mick Maurer, will shift to the newly created position of UTC senior vice president, Strategic Projects.
Email: aclevenger@defensenews.com
Twitter: @andclev
