UTC sees end to Canadian helicopter dispute

The Associated Press.
May 22, 2014
By The Associated Press.
May 22, 2014 – HARTFORD, Conn. – A long and costly dispute over helicopters between United Technologies Corp. and the federal government is nearing an end, the conglomerate's CEO said last week.

Delivery of 28 helicopters was scheduled to begin in 2012. But Sikorsky, a subsidiary of United Technologies, and Canadian officials clashed over production, support and other issues.

Negotiations are almost complete and United Technologies has agreed to a "phased delivery" of the helicopters, CEO Louis Chenevert told investor analysts Tuesday. Details of the program, known as Canadian Maritime Helicopters, will be available in about 30 days.

"This project is moving along," he said. "I want to make it the last time we talk about CMH ever."

The dispute has been expensive for the company. Sikorsky took a $27 million charge for increased production costs in the fourth quarter. United Technologies also reimbursed the Canadian government $88 million for damages. The Hartford, Connecticut-based company will also likely take a charge this year related to the helicopter program, Chenevert said.

Chief Financial Officer Greg Hayes had warned in April that retrofitting costs and an extended program schedule would lead to "significantly higher" costs.

But the financial impact of the dispute was not the major issue, said Edward Jones analyst Christian Mayes, as Sikorsky is United Technologies' smallest unit by revenue.

"The drama has been unfolding for years," he said. "It detracts from the Sikorsky brand. This has been a headache for a long time."

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