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Tuesday, October 26, 1999:

Textron unit gets boost in Poland helicopter bid

BOSTON, Mass., USA ( Reuters ) - Efforts by Textron Inc. 's Bell helicopter unit to win a lucrative attack helicopter contract from Poland got a boost on Tuesday when a Polish defense official said Bell or the Agusta unit of Italy's Finmeccanica will likely buy Poland 's state-owned helicopter manufacturer.

Observers in Warsaw expect the buyer of state-owned PZL Swidnik will also win the attack helicopter pact, although a spokesman for Deputy Defense Minister Romuald Szeremietiew said the sale of Swidnik and the awarding of the attack helicopter deal are separate issues.

Szeremietiew told a news conference in Warsaw on Tuesday, ``the issue of helicopters may move forward soon ... Bell and Agusta may buy Swidnik .''

Bell, the world's leading helicopter maker, which hopes to sell Poland its Super Cobra attack helicopter, took Szeremietiew's statement as good news.

``We are heartened by the minister's comments, and we look forward to negotiating a deal with the government of Poland,'' said Bell spokesman Mike Cox.

Western defense firms that have proposed to provide Poland with up to 100 attack helicopters worth several hundred million dollars include Bell, Agusta, Boeing Co. and the Eurocopter consortium.

Cox said Poland is expected to issue an international request for proposal for the attack helicopter by the end of the year, with a winning bidder named about six months later.

Bell and industry analysts said it is common for government contracts to include some sort of ``offset'' from the seller, such as an investment or a commitment to manufacture or assemble the purchased hardware inside the awarding country.

Under Polish law, companies granted defense contracts must invest in Poland an amount equal to the value of the deal.

``It's not unusual to see investments being made in order to secure an order,'' said analyst Peter Arment of JSA Research in Newport, R.I.

If Bell were to buy Swidnik, ``it certainly gives them a strong foot in the door.''

Szeremietiew said Poland's armed forces would commit to buy an upgraded version of Swidnik's Sokol as a support helicopter. He did not give the value of the contract, but said the Swidnik buyer could count on government orders consistent with a program to support Poland's ailing defense industry.



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