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Sierra Nevada Beats Beechcraft For Plane Contract

Fri, 03/01/2013 - 10:18am
Roxana Hegeman, Associated Press

WICHITA, Kan. (AP) — The U.S. Air Force awarded a high-stakes contract worth more than $427 million to Sierra Nevada Corp. on Wednesday, dealing a major blow to Wichita-based Beechcraft as it emerges from bankruptcy protection.

Sierra Nevada, based in Sparks, Nev., will initially build 20 light air support planes for use in Afghanistan under a contract that could ultimately be worth nearly $1 billion, depending on future orders. The planes will be manufactured in Jacksonville, Fla.

The aircraft would give the Afghan National Army Air Corps a fixed-wing strike capability as well as reconnaissance and training abilities and are considered a vital element in the United States' withdrawal strategy from Afghanistan.

Beechcraft, formerly Hawker Beechcraft, had proposed the AT-6 attack aircraft, a version of its T-6 trainer, for the project. Sierra Nevada partnered with Brazil-based Embraer to offer its A-29 Super Tucano.

The competition for the award has taken nearly three years and has been plagued by delays and legal challenges.

"Although the U.S. Air Force did not select the AT-6 Light Attack Aircraft for the Light Air Support program, Beechcraft is committed to advancing the aircraft's capabilities and continues to pursue additional close air support opportunities," Beechcraft said in a written statement. "We are disappointed that our proposal was not chosen. We will meet with the USAF for a full debrief of the award and determine our next steps forward at that time."

Sierra Nevada said the light air support program is key to maintaining security in that region going forward, and provides partner nations with flexible, economical airpower. The A-29 Super Tucano is in use with nine air forces around the world.

"The LAS program is essential to the United States' objectives in Afghanistan and to U.S. national security," Sierra Nevada said in an email. "Additionally, the contract directly supports American businesses, creates new jobs and provides much-needed aid to American soldiers in successfully concluding their mission in Afghanistan."

Sierra Nevada said the LAS contract will support more than 1,400 American jobs, noting more than 100 companies will supply parts and services to build the plane. The company said the contract will also create an unspecified number of new jobs at Sierra Nevada and Embraer. Embraer employs 1,200 people in the United States and Sierra Nevada employs 2,500 workers.

Beechcraft has long said the AT-6 government contract would generate hundreds of jobs in Wichita, but last week CEO Bill Boisture said it is "not useful" to speculate about whether all those would be additional jobs if the company won the LAS contract — or whether there would be more layoffs if the company did not get it.

In July, Beechcraft began initial, small-quantity production of the AT-6 after receiving interest in the plane from other potential customers. Boisture told employees last week as the company emerged from bankruptcy protection that winning a customer to launch production is one of the top goals to get Beechcraft "off on the right foot" in 2013.

The LAS contract was bitterly fought over by the two rival manufacturers.

Sierra Nevada sued in June 2012 for the reinstatement of the contract after the U.S. Air Force canceled the deal following objections by Beechcraft and under pressure from lawmakers. Sierra Nevada contended that the revised bid proposal was tilted in favor of then-Hawker Beechcraft.

The Air Force canceled the contract in March 2012 and launched an investigation after Hawker Beechcraft said it had been wrongly excluded from the bidding process.

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