Much needed deal on its way to Aero Vodochody

The Czech Republic's aircraft manufacturer, Aero Vodochody, which has suffered many losses and setbacks over the past few years, is to receive a much needed boost. Boeing, which owns Aero Vodochody, has helped the company procure a contract to produce helicopters for the American company Sikorsky, which will bring in up to 230 million dollars. Nick Carey has the details:

Aero Vodochody was once one of former Czechoslovakia's industrial triumphs, producing up to three MiG fighters a day for the Soviet Union in its prime. After the Velvet Revolution in 1989, the company fell on hard times. Aero Vodochody has been producing subsonic jets for the Czech Air Force, but the order has met with frequent problems and delays. The rest of the company's production has been restricted to providing parts for planes abroad, and the company suffered losses of more than two billion Czech crowns, or more than fifty million dollars in 1999.

Aero Vodochody was bought up in 1998 by the American aircraft producer Boeing, and there were great plans for the future. The Czech government has indicated that many of Boeing's promises have not been fulfilled and that it would like to re-evaluate the situation.

The latest news concerning an order for provision of more than a hundred S-76 civilian helicopters for the American company Sikorsky is certainly welcome. Aero Vodochody is to produce the helicopters at a rate of fifteen per year for the next seven years. The deal has been aided by Boeing and will bring Aero Vodochody up to 230 million dollars in revenues. It may also lead to further deals.

Although many details about the deal are available in the press, Boeing is reluctant to comment. The company has merely stated that it cannot confirm the deal. The contract itself was signed in April in secret, and one of the reasons for this may be that Sikorsky has faced resistance from trade unions over a deal outside the US. Sikorsky wants to cut costs, and the deal coincides with plans to lay off 1,100 workers this year.

The Czech government has reacted positively to the deal, but Trade and Industry Minister Miroslav Gregr complains that Boeing should be doing much more to promote the L-159 subsonic fighters produced by Aero Vodochody, which are, he says amongst the best in their category. I think the appropriate expression here is never look a gift horse in the mouth.