GKN tries to enter US market via Bush

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The Independent Online

The engineering group GKN was hopeful yesterday of breaking into the US helicopter market when it entered the running for a deal worth over $500m to supply the White House with a fleet of helicopters.

The contract would be to supply the 24 helicopters that US President George Bush jets about in and would also herald the company's entry into the US market.

As part of its effort to win the deal, where it is up against America's Sikorsky, it has also garnered the support of both Tony Blair and the Italian prime minister Silvio Berlusconi.

"I think it is the best shot there has been for a long, long time of our getting a product into the US," Kevin Smith, GKN's chief executive said adding that the group was getting a "tremendous amount" of "political support" for that particular contract in both the UK and in Italy.

The upbeat tone accompanied GKN's six month figures which beat analysts' expectations and sent the stock up 14.5p, or nearly 7 per cent, to close at 234.5p - the second biggest riser in the FTSE 100 index.

GKN's helicopter business, AugustaWestland, is a 50:50 joint venture with Italy's Finmeccanica and the helicopter - called the EH101 - has been renamed the US101 to make it sound more appealing to a US audience. GKN will know whether it has been successful early next year.

The AugustaWestland venture is currently bidding for a total of $7bn worth of helicopter business in the US which requires 360 aircraft to be built.

The most sizable of the contracts is for 196 aircraft for search and rescue operations in the US - a deal that Mr Smith estimates is worth $4bn to $5bn alone and one, he says, which represents the "bellwether" of success in the market.

Mr Smith conceded it would not be easy to crack the US market but stressed that the company had "two very strong American partners [and] with absolutely no bias - the best product".

GKN yesterday turned out a 41 per cent jump in pretax profits to £113m, before accounting for goodwill and exceptional items, in the six months to 14 June. Sales rose 4 per cent to £2.3bn. "I think we've done very well in the first half even if I do say so myself, given the challenging markets," Mr Smith said.