Eurocopter expands U.S. market investment

 - May 9, 2008, 7:06 AM

With the arrival of its new CEO, American Eurocopter also revealed that it is expanding its “footprint” in the U.S. with the investment of $11.9 million in a new facility to be built at Golden Triangle Regional Airport near Columbus, Miss.

The announcement in the fall was the first public acknowledgement of the company’s new president and CEO, Marc Paganini. Presiding over the press conference, Paganini claimed a 50-percent share in the civil helicopter market in the U.S., and made it clear that the expansion signals an “increasing industrial presence in the United States.”

The new plant will focus on the construction of helicopter components (instrument panels, vertical fins and horizontal stabilizers) for the AS 350, EC 130 and AS 355; on customization of helicopters for special missions, including law enforcement and border and maritime patrol; and on final assembly of the AS 350. The Golden Triangle facility will be the second American Eurocopter plant in the U.S. and the first U.S. site to include component manufacturing. The first facility was built in Grand Prairie, Texas, where the primary role is helicopter assembly, product support, component repair and overhaul, interior completion and modification, maintenance and transition flight training.

The new 100,000-sq-ft Golden Triangle plant, set on a 40-acre site, will include hangars, completion and final assembly areas, manufacturing stations, avionics assembly and a workforce of some 100. The project will involve the investment of $3.5 million in equipment and tooling, $1.4 million in training and $7 million in site preparation and building. Construction will begin this month and completion is expected in the third quarter of next year. In the interim, the company will begin moving into temporary quarters at the airport as early as next month.

Paganini listed a number of reasons for selecting the Golden Triangle site for its expansion efforts. Among them are tax incentives, room for expansion on the 40-acre site and a tight labor market in Texas–particularly in the Dallas/Fort Worth area, where American Eurocopter’s Grand Prairie plant is located.

Ralph Crosby, chairman and CEO of EADS North America, left no doubt that the market goals are closely tied to U.S. efforts to increase security against acts of terrorism. “It is a top priority to increase our industrial presence and workforce in the U.S.–particularly in the areas of homeland security and defense.” Both American Eurocopter and EADS North America are U.S.-based subsidiaries of Paris-based aerospace and defense contractor EADS.

While Paganini said no military components would be built at the new plant “for the moment,” he said Eurocopter sees its expanding U.S. civil presence as a springboard to U.S. military contracts. At the same time, he did not address U.S. statutes limiting acquisition of foreign-made equipment by the Pentagon.

“We have a military line,” added Sam Adcock, a spokesman for American Eurocopter’s parent company, EADS North America. “We’re just not selling in America–yet.”

Responding to a question of whether the new facility in Mississippi would be seen by competitors as a threat to the U.S. domestic helicopter market, Adcock said it is no secret that American Eurocopter has wanted to increase its market footprint in the U.S. “We’ve made no secret of this,” he said, adding, “we’re not raiding someone’s piggy bank.”

Paganini said growth in the U.S. will include bids for orders for new helicopters from the Coast Guard and Border Patrol as U.S. efforts to increase homeland security grow more intense. Even as it is discussing upgrades of the existing Eurocopter Dolphin fleet now in service with the Coast Guard, the company is also marketing a maritime version of the EC 155 as a replacement.

A memorandum of understanding for construction of the new facility was signed on October 25 and a final contract was to be completed by the middle of last month.

Paganini, formerly senior v-p of investor relations for EADS in Paris, replaces Rudy Palladina at American Eurocopter. Palladina will leave Eurocopter in January but will remain available as a consultant.

Paganini said he would continue to “seek to increase the industrial presence of Eurocopter, adding jobs and production facilities that will expand our American footprint.”