Bell CEO plans to reinvigorate venerable helo manufacturer

 - March 30, 2007, 9:53 AM

Bell Helicopter was at last month’s Heli-Expo in Las Vegas in force as usual, with a 412 and a 407 on display at its booth. At the static area, the Texas-based helicopter manufacturer had several new-design 427 mockups, an Eagle Eye UAV and a Bell 430. Another 430, along with a 427 and 407, was also available for customer flights from the convention center.

This was the first Heli-Expo for Mike “Red” Redenbaugh as Bell CEO. While there, he discussed his company’s past-year performance and projections for this year.

In February, Bell announced a decision to move its commercial business unit, worldwide sales and marketing offices and the Bell Training Academy to a new facility formerly occupied by Gulfstream at Fort Worth Alliance Airport. The relocation from Arlington, Texas, now under way, will involve more than 300 people transferring to the new facility by the end of June.

In total the new Bell facility has 64,000 sq ft of office space, an 82,000-sq-ft hangar and 15,000 sq ft of warehouse space. When BA609 deliveries begin in 2008, Alliance will also serve as the tiltrotor’s delivery center and training school. In addition to the new buildings, Bell has acquired some property west of Interstate 35W, from which it will be able to support its flight-training operations.

Redenbaugh is predictably bullish about the move: “It will transform our commercial business unit into a world-class organization. Locating to this upscale facility provides more room, a better workflow and a more accurate reflection of the current pride and future growth we expect at Bell Helicopter. In addition, there are plenty of lodging and restaurant facilities nearby to support our customers who fly in from around the world to train with us.”

Rick Rosenjack, senior vice president of Bell Helicopter’s commercial business since October 2002, is also looking forward to the move to Alliance airport. “It will give the Bell Training Academy a bright new image that will reflect our continuing commitment to the commercial market. It will also be a great showcase for our customers to visit. It is an investment in our future and tells the market that we are both here to stay and approaching our customers in a bright new way.

“But it’s not just image–it’s a total change. We have two large hangars and state-of-the-art training facilities. The airport is less than 30 minutes from Dallas/Fort Worth Airport, so it’s far more convenient for customers. Accessibility is much better and we have the room to develop a first-class facility. It gives us room to grow as well, and that’s a real plus.”

After several years of lackluster performance, how does Bell plan to recover some of the dominance it used to enjoy in the commercial marketplace? The enormous investment Bell has had to put into the V-22 Osprey program has left it vulnerable to attack, notably from Eurocopter, and its civil sales have been dropping for the past three years. Rosenjack is confident that the company is on its way back. “Last year we set ourselves a vision to regain the lead in the commercial market,” he said.

“Since then, we’ve been working very hard to make that happen. We have more
than doubled our investment into researching new rotorcraft products and we’re also looking at what we can do to enhance our existing portfolio with new technology. Before the end of the decade we will have a new range–one in line with our modular affordable product line concept–but investment in new technology will be key to all our improvements.

“We are at the point now where we are delivering on our retrofit, modification and upgrade program promises, which is what I describe as a bridge to our future products. We’ve looked hard at regional markets and product sectors and, in our first year, we increased our deliveries by more than 25 percent, and we expect to do even better than that this year. For example, we’ve increased the useful load on the Bell 206B by 150 pounds and have identified more than 50 improvement opportunities on the 407, more than 20 of which have already been fielded. In fact in the 407 alone we saw a 35-percent improvement in year-over-year deliveries, which I think is a phenomenal improvement. It’s good to be back.”

R&D Spending Up

 Rosenjack said Bell has more than doubled its 2003 R&D plan for this year, and is spending 40 percent more on its existing product line. “A full 23 percent of the people who bought Bell products last year were new customers to us, and we got that way because we delivered on the commitment we made.

“Customers have been asking us to help them reduce their operating costs, and we are continuing to work hard on this. Changing just one inspection interval enabled us to shave $5,000 from the 407’s direct operating costs. We are investing in the right things, looking to do the right thing by our customers, and that is paying off in new deliveries. We continue to invest in technology–more than double the 2003 level during 2004–and looking at what our customers want.

“Looking at the rest of our civil portfolio, I believe there is still a market for commercial designs such as the 430. As well as dominating the corporate sector, it is giving us openings into new markets such as offshore and air ambulance–it was a great success at last year’s Air Medical Transport Conference. We have a positive plan regarding the 427, and we announced it in Las Vegas.

“We’re very pleased with the way the Bell/Agusta AB139 is coming together. We have not changed the terms of our joint venture with Agusta. Once we get to a certain production rate, it is part of our plan to build the AB139 in North America, so we’re just moving that along. The BA609 is progressing well. We are on track to start flying again later this year–in airplane mode. As part of the agreed plan, we are transferring much of the flight-test program to our Italian partners.”

Customer service used to be a keystone of Bell’s product support and, in the past, everyone else struggled to compete. Is Rosenjack confident that the company’s recently announced product-support engineering program will enable Bell to keep an edge over competitors?

“Absolutely. We have always prided ourselves on outstanding customer service–we didn’t get to be number one overnight, nor did we manage to stay there for nine years in a row. We are further improving customer satisfaction through making an experienced Bell product-support engineer available to them for 12 hours a day, seven days a week. We call it our 12/7 product support plan. We also improved our online computer-ordering service, Vista, which greatly reduces component cycle time.

“We have now started to focus on our repair and overhaul (R&O) service, and from the former Edwards & Associates facility in Bristol, Tennessee, we have built a new company–Bell Tennessee–to support customers with Bell reconditioned parts and also take on overhauls. We have already exceeded our sales expectations for that business. Customer training is also extremely important to us–last year we had 19,000 pilots and engineers go through our academy, and this figure will rise once we are at Alliance.”