Rumors Of Sikorsky Divestiture Exaggerated — For Now (From Forbes)
Rumors that United Technologies might want to sell or spin off its Sikorsky helicopter unit have surfaced for the umpteenth time. If past experience is any indication the rumors aren’t true, but it is easy to see why some people are taking them seriously. It isn’t the fact that Sikorsky is UTC’s smallest major business unit nor that its profits lag other units; the problem is Sikorsky’s unpredictable government customer. The Army and Air Force are looking ambivalent about two new starts that Sikorsky probably would have won, and military demand trends later in the decade are not encouraging. That doesn’t necessarily mean UTC Chairman & CEO Louis Chenevert wants to unload a business that has been part of his company’s mix since 1929, but it does suggest that the frequent shifts in Pentagon investment priorities are beginning to undermine the financial case for being a military supplier. I have written a commentary for Forbes here.
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