MD Helicopters’ (MDHI) new owner is plotting a dramatic comeback for the troubled manufacturer, pledging to finance a bold growth strategy while “washing away the sins of the fathers” by immediately addressing customer support issues. Lynn Tilton, chief executive of New York-based private investment firm Patriarch Partners, acquired MDHI less than three months after learning of the company’s existence.
Patriarch seeks to acquire struggling companies that are unable to support otherwise strong products. Tilton was quickly swayed by MDHI’s “very sexy” product line, and moved fast to absorb the company into Patriarch’s $4.5 billion management portfolio. “I won’t tell you that we don’t have obstacles and we don’t have issues. We started out from being nearly shut down,” says Tilton. Patriarch has installed Robert René as interim chief executive at MDHI’s headquarters in Mesa, Arizona.
His job is focused on three immediate objectives: address the needs of the installed base, look for new commercial orders and help new partner Lockheed Martin win the US Army’s $1.3 billion Light Utility Helicopter (LUH) programme. LUH “is extremely opportune in terms of timing, when and if it is profitable”, says Tilton. But she adds: “I certainly didn’t purchase MDHI on the need to win either the ARH [Armed Reconnaissance Helicopter] or LUH contracts. I bought this company for its commercial business.” Four new orders for civil MDHI aircraft should be announced this week, says René.
MDHI is projecting robust civil growth, especially in the medical and law enforcement fields, he says. Tilton says the new MDHI team is primed to go “full thrust into our commercial programme”, including drawing up plans for new production facilities. But the company must address a year-long breakdown in MDHI’s supply chain. Kaman stopped delivering fuselages last September after being forced to write off $21 million in costs owed by MDHI.
STEPHEN TRIMBLE/WASHINGTON DC
Source: Flight International