Thursday, October 8, 2009

Honeywell Sells Helicopter Engines to Chinese Firm

Defense News


Honeywell Sells Helicopter Engines to Chinese Firm

By Wendell Minnick

TAIPEI — Honeywell will sell engines to China to outfit commercial helicopters, touching off concerns they could end up on military aircraft.

The U.S. company said it would supply an undisclosed number of LTS101-700D-2 engines for installation on Changhe Aircraft Industries’ Z-11 helicopters beginning in 2010.

The engines will be sold “commercially for a commercial use only,” Honeywell Aerospace spokesman Bill Reavis said.

Some observers suggested the Honeywell engines could be installed on China’s Z-11J military trainer or its new Z-11W light attack helicopter.

In 2007, several Pratt & Whitney Canada (P&WC) PT6C-67C helicopter engines sold for the 6-ton Chinese Medium Helicopter program ended up in Changhe’s Z-10 Zhisheng attack helicopters.

“My view is that any helicopter parts to China will, in some amounts, be diverted for use in military helicopters,” said Larry Wortzel, vice chairman of the U.S.-China Economic and Security Review Commission.

China has a long history of violating licensing agreements, rerouting commercial hardware, such as the P&WC engine incident, and reverse engineering.

“We do not expect the subjects you raise ... to be issues in this agreement,” Reavis said in response to questions. “We have an in-country team working closely with our Chinese customer, and there are proprietary provisions in the contract to ensure enforcement.”

Joel Johnson, an industry observer with the Teal Group, Fairfax, Va., said the advantage of something as “expensive and complex as an aircraft engine is you can rather readily keep track of how many engines you sell, and how many civil helicopters are produced with those engines.”

Reverse engineering could be difficult for China, said Johnson, Teal’s executive director-international, because a “turbine engine is a rather complex device to reverse engineer, particularly with respect to such things as the exact composition of engine blades in the hot section.”

However, China has a history of success as a copycat.

Both Honeywell and Changhe claim the Z-11 was totally designed by Changhe, “which holds all intellectual property rights and has obtained type certificate and production certificate awarded by the Civil Aviation Administration of China,” a Honeywell news release said.

Changhe’s Web site also claims the Z-11 is an indigenous helicopter, the first whose intellectual property rights are “independently owned by China.”

Yet there have been accusations that Changhe copied the Z-11 from the French Aérospatiale AS350 Squirrel in violation of intellectual property rights.

One former U.S. defense official said U.S. and European-built commercial helicopters used for offshore oil rigs and ambulance services in China and Hong Kong had high “parts failure rates,” and the type of helicopters “used in these industries and their similarity to the [Chinese] military helicopters” has not gone unnoticed.

A U.S. defense industry source echoed the allegation and said the parts likely “have lower lives due to disassembly for purposes of reverse engineering or cloning.”

Wortzel said U.S. officials should be more vigilant about dual-use sales to China.

“If parts are licensed for civilian versions of helicopters, a very close and careful pre­ and post-license check regime must be put on place to ensure that any part orders are valid and that the parts go where they are supposed to go,” he said.

Wortzel said the U.S. government could insist “as a condition of license that an American corporate tech rep actually validate the need for the repair part, the supply of spares, and the installation of the new part.”