Sikorsky scrutinized for alleged overbilling

HARTFORD, Conn. >> The Justice Department has launched a criminal probe into allegations that helicopter maker Sikorsky and two subsidiaries overbilled the Navy, United Technologies Corp. said Friday.

United Technologies, the aerospace and building systems conglomerate that owns Sikorsky, said in a regulatory filing that the government accuses the subsidiaries of adding profit and overhead costs to the price of spare parts.

The government filed a complaint in October in federal court that Sikorsky and subsidiaries Derco Aerospace and Sikorsky Support Services Inc. violated the False Claims Act in connection with the 2006 Navy contract. The contract was to support the Navy’s T-34 and T-44 fixed-wing turboprop training aircraft.

SSSI subcontracted with Derco primarily to procure and manage spare parts for the training aircraft.

The government alleges that SSSI submitted false cost certificates for 2006 through 2012.

“We believe that Derco was lawfully permitted to add profit and overhead to the cost of the parts and maintain that SSSI did not submit any false certificates,” Hartford, Conn.-based United Technologies said. “We also believe that we have other substantial legal and factual defenses to the government’s claims.”

The government is seeking damages of about $45 million that could be tripled, in addition to penalties of about $13 million. The total could amount to $148 million.

Mitsubishi pulling the plug on Illinois plant

NORMAL, Ill. >> Mitsubishi Motors confirmed Friday that it plans to stop production at its only U.S. factory and sell the plant in central Illinois, which has more than 1,200 workers.

The Japanese automaker reviewed its global supply chain and decided it was necessary to end production at the plant and find a buyer, said Dan Irvin, the company’s North American spokesman. The announcement came after Japanese media reported the automaker had decided to end production in the U.S. to focus on Asian markets.

Irvin said Mitsubishi’s board soon will make a formal decision on what will happen to the plant in Normal, Ill., about 100 miles southwest of Chicago. Company officials hope to find a buyer that will maintain the factory’s employment. The president of UAW Local 2488, Rod DeVary, said workers were told Friday that the plant will cease production Nov. 30.

Annual production at the plant, which makes the Outlander SUV, has fallen to 64,000 vehicles from more than 200,000 in 2002.