The Export-Import Bank of the United States, which helps U.S. companies raise cash to sell their products abroad, says Philadelphia-area helicopter exports helped the bank reach its $1 billion two-year goal for new financing for general aviation (non-military, non-commercial airliner) exports -- a year early.
"We have supported $508 milllion in helicopter sales," and almost as much in small-plane sales, from 2012 through Jan. 2013, Ex-Im chief executive Fred Hochberg told me. Sikorsky accounted for around $400 million of the total. Those "ships" were engineered and tested in Florida, with rotors built in Connecticut, and assembled at Sikorsky's plant near Coatesville, Chester County, which employs 875.
The other $100 million or so backed helicopters sold by AgustaWestland, an Italian-owned manufacturer, from its plant in Northeast Philadelphia. From both plants, "mostly the (helicopters) were sold to Brazil, Britain, Norway and Ireland (a financial center for European companies and their affiliates), "for use in oil exploration and search-and-rescue missions, Hochberg told me.
"Aerospace is the No. 1 US export after agriculture," Hochberg noted. Military sales are off-limits for Ex-Im financing; the bank wanted to expand beyond big commercial aircraft sales; so it started focusing on private-plane and helicopter sales. Sikorsky and AgustaWestland are industry leaders in helicopters; indeed, says Hochberg,"You know, general aviation has become predominantly an export business," as domestic U.S. markets have dried up. Meanwhile, under boss Mick Maurer, Sikorsky "has increased the efficiency and speed of the helicopters, and that creates more demand for sales."
ALSO: In a statement (since I asked), AgustaWestland confirms that Ex-Im financing has "allowed world-wide helicopter operators to purchase aircraft made in AgustaWestland’s Philadelphia facilities and led to significant investment in our local economy and further development of the region’s workforce," for foreign users seeking helicopters for "passenger transport, para-public aerial surveillance and security, and airborne search and rescue missions."
Adds AgustaWestland Philadelphia CFO Christopher Slack: “The benefits reaped by Export-Import bank financing extend long past the initial delivery of the aircraft and will support nearly 600 jobs here at AgustaWestland Philadelphia well into the future... Our region and our workers benefit immensely from the availability of funding by the Ex-Im bank, and we are looking for future opportunities that allow customers to take advantage of the financing opportunities the bank provides, as well as utilizing the bank for working capital related to the purchase of spare parts and materials in support of our customers."
EARLIER: Why do the helicopter makers need government financing at all? "I was at the Ebace international aviation show, in 2012, in Geneva, hearing the difficulty the industry was having," Hochberg said. "If you buy for a foreign manufacturer, the financing always comes from a government. German, French and British governments finance at least a portion of Airbus exports. Our government tries to hold back and only fill in the gap when there is a market need. I haven’t seen the same sort of reticence over in Europe."
Brazil's economy has slowed lately. Will demand also flatline? "Offshore looks really strong in 2014, for oil," Hochberg said. "2015 is a little less clear. (Sikorsky's) Maurer says his company is using Big Data calculations to check pilot data to make runs more efficient. They have developed a coaxial rotor, which provides better speed. That's innovation that we can put to work to rebut intense competition" from the Philadelphia-area chopper-makers' governmetn-backed European rivals.