Bell will bounce back, chief contends

 - May 6, 2008, 9:11 AM

Bell Helicopter chairman and chief executive John Murphey is in the sort of corporate hotseat many top executives yearn for: command of a major corporation at the precise moment that corporation is in, if not the fight of its life, certainly some very tough times indeed. The past 18 months have seen a slump in already lackluster sales of Bell’s conventional rotorcraft accompanied by a crippling series of setbacks, scandals and revelations regarding the MV-22 Osprey tiltrotor.

Although the Osprey program is a partnership with Boeing Helicopter, Bell has parlayed the lion’s share of capital while also assuming most of the technical risk. A pair of crashes killing 23 marines in late 2000 and early last year prompted allegations of data cooking and wrongdoing within the ranks of the Marine Corps officers and people administering the program. While the stain of this wrongdoing did not extend to Bell’s front door, required engineering changes prompted a thorough and ultimately quite costly reexamination of Bell’s role in the program.

At the same time, a general belt-tightening by Bell’s loss-conscious parent company, Textron, has resulted in some rearrangements at the senior corporate level. Dismissed was Bell’s former president and CEO, Terry Stinson, while Textron reorganized its business into two units: aviation and non-aviation. In this way, Bell and Cessna Aircraft were brought under the same corporate umbrella, where today both are currently overseen by former Cessna topkick Russ Meyer, widely regarded as an aviation professional with unsurpassed skills in managing the building and selling of airplanes.

So far only the external trappings of the remake have been visible: a program “postponement” for the Bell/Agusta BA609 civil tiltrotor, along with a dramatic reorganization of Bell’s commercial customer-service division following feedback from the field that this part of Bell, traditionally one of the strongest links in the Bell family chain, had deteriorated badly.

The changes have not been without their casualties. Bell shed its main commercial marketing guru, Jeffery Pino, only to see him immediately hired by archrival Sikorsky. Proof of a schism between the new Textron overseers and the old guard within the company’s new aviation division came with the recent departure of Cessna chairman and CEO Gary Hay over what were termed “philosophical differences.” However, the facts are plain. Bell is planning on tiltrotor income as its fiscal backbone over the next 15 years. Last year the company’s income rose a mere 2.5 percent to $1.62 billion.

Murphey has been with Bell since 1961, working his way up the corporate ladder in materiel, procurement, program management, commercial sales and marketing, product support, military business and operations management. He was named chairman and CEO last September 26.