Question-and-Answer Session
Operator
Thank you. (Operator Instructions). We'll take our first question from Gary Liebowitz with Wells Fargo.
Gary Liebowitz - Wells Fargo
Lawrence, can you give us a little more color on the Sikorsky Blackhawk destocking issue. How much visibility you have with the customer's inventory? I think this quarter your revenue rate, going back to 2007 levels, when fairly, we are building many more Blackhawks today then we did then. Do you think this gets resolved by calendar year end or how does this play out?
Ed Dickinson
We had a meeting at Sikorsky in July, and not all of this is Sikorsky, not all of that declined, another piece of it is, one of their major Tier 1s that is involve in the program is also doing destocking. With regard to the tier one, we don’t have an answer right now, but that is something that our demand management people are working with the customer on. That has to do with the question of how many of these models, the M model in particular, Sikorsky is going to build, and how much the Tier 1 supplier is going to build them. As it's turned out, Sikorsky is building more of the product in 2009 than expected.
With regard to direct discussions with Sikorsky, we've had these at high levels within Sikorsky, and during this meeting in July, we set up meetings later this month with our demand management people and theirs, and in the meantime we've been exchanging data to try to determine what's behind the volatility. We've been assured that the product that we build and we certainly believe this to be the case, we are source on at this time. So, it's not a question of a product being purchased elsewhere, but rather the fairly aggressive inventory reduction plans that they've put in place.
What we've received from them is their current inventory, their expected demand for this year as well as for the next year. We do believe that it's basically cleared up now in terms of our estimates, because we are looking at their inventory system directly. In the past because of the volatility in the demand in their system, we've chosen to use production rates, but the inventory destocking really diverted us.
Due to the inventory destocking, sometimes at the end of the year, often times in November and December, there has been, and we experienced this in 2008 you may recall when we were also going through a Boeing strike, we had some decline in our Blackhawk product back then, when they adjusted their inventories to minimize them by year end.
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