MD Helicopters ‘not for sale’

 - June 4, 2007, 6:45 AM

MD Helicopters (MDH) last month dismissed as ill-founded “rumors” circulating that the company is for sale.

In a statement, chairman and CEO Lynn Tilton expressed frustration at the “industry rumor mill.” She said that Patriarch Partners– which took a controlling interest in Mesa, Ariz.-based MDH in July 2005–recently repurchased most of the equity held by minority shareholders. “And–in the spirit of eradicating rumors–MD is not for sale,” she said in the statement. In recent months, Sikor-sky president Jeff Pino had hinted his company would be interested in buying MDH.

Delivery predictions, however, seem to be variable. In March, MDH was planning to deliver 48 helicopters–22 MD 902 Explorer twins and 26 MD 500/600 singles–this year. As of early last month, the company had reduced that estimate to 43 deliveries.

Tilton also wanted to downplay the reduced total. “We just wanted to be more conservative. [Delivering] 48 was the target. But until you have done them, you do not know how many deliveries you really do,” said a spokeswoman. Since she took the controls two years ago, Tilton has made on-time deliveries her priority.

MDH plans to deliver 85 helicopters next year. If it meets that goal, the company will reach delivery figures it has not seen since 1999. The ultimate goal, as stated in March, is to deliver 150 helicopters a year.

Charles Vehlow, appointed president in November, had hoped to become the strong link in a broken supply chain that had plagued the manufacturer.

But with Vehlow now ousted, that responsibility has fallen to Giles Wright, vice president for the supply chain, the first to hold that position. Wright’s experience includes working with companies such as General Dynamics, Eaton and Boeing. He is certainly busy. MDH’s supply chain is undergoing a major reorganization. According to the company, the factory in Monterrey, Mexico, is now fully operational. It is scheduled to deliver 23 single-engine fuselages to the Mesa facility this year. In March, Tilton said, “We are fighting with [Turkish-based] TAI to get twin-engine fuselages on time and with a payment schedule we can afford.”

Grand Prairie, Texas-based Heritage Aviation became MDH’s sister company in February. It now provides completion and parts manufacturing capabilities, which the company says makes it more self-sufficient.

MDH is also working to improve customer support. It says it reduced AOGs by 95 percent last year. “AOG calls are processed within four hours; 61 percent of requirements are filled in 24 hours; and more than 75 percent are filled within four days,” Tilton said in the statement. MDH added six new authorized service centers to its network last year.

Company executives know they still have a lot to do to rebuild the company. “As I have said so often, this is a long-term journey,” Tilton said.