Manufacturer admits it overreached itself with production pledges for police Explorers
MD Helicopters (MDHI) appears to be emerging from its financial difficulties, buoyed by potential US Army interest in armed reconnaissance helicopters based on its commercial MD 530F. The Mesa, Arizona-based company has had severe cashflow issues caused by technical and financing problems that delayed helicopter deliveries.
"We delivered 15 aircraft last year. That was below our goal and was caused by difficulties with the German and Dutch police helicopters," says chief executive Henk Schaeken. The fifth and final MD Explorer for the Baden-Würrtem-berg state police was delivered last month, but MDHI has yet to begin delivery of eight helicopters to the Dutch national police. "Two programmes at the same time was too big a step," he says.
The equipment specified for the Dutch Explorers has pushed the helicopter over its gross weight limit, requiring recertification of the aircraft to the higher weight. Schaeken says MDHI has completed factory testing, with US Federal Aviation Administration testing expected this month. "We are sure we can meet the Dutch specification, but delivery is paced by certification," he says.
MDHI will not get paid until it hands over the Dutch Explorers, which were originally scheduled for delivery in 2001-2. The company's cashflow was also hurt by delays in US Ex-Im Bank financing for the sale of 10 MD 600Ns to the Turkish national police. This was completed late last year and the first two helicopters were handed over last month.
Meanwhile, the company's Dutch owner RDM has had to provide additional capital. Outside investment was looked at and is still a possibility, says Shaeken. "We will work off the cashflow issues this year. It is a hard road to recovery."
Kaman Aerospace, which produces airframes for the MD 500/600-series and rotor systems for the Explorer, halted work last year after MDHI fell behind in both deliveries and payments. Kaman president Joseph Lubenstein is confident work will resume later this year.
MDHI is hopeful of additional US Drug Enforcement Agency (DEA) orders following delivery of its first Explorer in January. The DEA has a five-year framework agreement for up to 10 aircraft a year, "but it is not automatic", says Schaeken. MDHI has also offered the MD 520N for a 100-helicopter US Border Patrol requirement.
GRAHAM WARWICK / WASHINGTON DC
Source: Flight International
