Industry Perspective: Eurocopter

HAI Convention News » 2005
February 20, 2007, 5:25 AM

American Eurocopter opened its new production facility near Columbus, Miss., in October. Once the commotion had died down, HAI Convention News paid a visit to interview president and CEO Marc Paganini, right, to discuss the progress Eurocopter has made in getting the operation up and running. Eurocopter’s activity in the last year was a main thrust of the interview.

Why did you want to expand in the U.S., and what made you decide
to settle in Columbus?

It was a logical step in our plan to increase our footprint in the U.S. We have been there for 30 years, for the most part in the areas of repair and product support, and we wanted to move up a level to become a U.S. manufacturer. We decided to invest in a new plant to help us do just that, as well as to attract skills in other areas that do not duplicate the work carried out at our facility in Grand Prairie, Texas.

The decision was not due to any perceived French influence in the region–I am still looking for that! The decision was made after looking at 27 different sites, including three in Mississippi, and we were impressed by the quality of the workforce here. Aerospace companies such as Boeing, Northrop Grumman and Lockheed Martin have all operated in the area. There is a U.S. Air Force base not far away and Mississippi State University has a very good reservoir of technical talent. There’s a good women’s university, too. There is plenty of space to expand and the people are very pleasant and seem eager to have us. At our first workforce recruitment drive, the line stretched around the block–we have been welcomed with a great deal of enthusiasm.

It was not vital to be at an international hub. We do not have to react quickly because we are a manufacturer, not a product support center. Columbus officials offered us a good financial package for acquiring the real estate and helping to source and train the workforce. Most of the components that make up the AS 350 are air-freighted into Atlanta and then trucked to us here–it is not a huge distance and doesn’t really affect the supply chain. So although we may appear to be in the middle of nowhere–and it is quiet only because we are nowhere near full capacity here yet–we are well served. Dallas/Fort Worth is more central, admittedly, and that is why we will continue to have our logistics center there.

We also gain about a month on the production cycle of an AStar, even taking into account the time required to ship the components from France. Incidentally, the first U.S.-built AStars have already been delivered. Now we are completing a total of 40 more for the U.S. Customs Service.

What do you think of the local workforce?

We’re very pleased. A few experienced guys have relocated from Grand Prairie and we also appear to be attracting staff from elsewhere in the U.S.–don’t forget that Americans are a famously mobile people. All of them seem genuinely excited to be in at the beginning of what I am sure will be a very exciting time for Eurocopter. We have a little more than 50 people here now, which is in line with our target. How fast we expand in the near term is affected by what our share of the U.S. Coast Guard
AS 365 Dolphin re-engining contract turns out to be. But the optimum size for us here is around 200 people. The USCG contract could add between 50 and 70 more, depending on how many aircraft are involved.

What sort of progress have you made so far?

We have started manufacturing components, beginning with the horizontal and vertical stabilizers for the AS 350B. Soon we will build tailbooms and cockpit panels and, eventually, we will supply these components to every AStar, Twin Star and EC 130. We are also starting to build components, including some composite ones, for the Dolphin and hope to bring in a significant part of the U.S. Coast Guard’s HH-65 re-engining project. This could amount to as many as 100 of the 800-odd components required to adapt the airframe to accept the Arriel 2C2 engine.

What about the re-engining process itself?

The work on all 95 Dolphins was originally expected to be carried out at the Coast Guard’s aircraft repair and supply center at Elizabeth City, N.C. However, the deadline for this is very tight–the commandant requires that all flying aircraft are available within two years and Elizabeth City, while an extremely able engineering facility, cannot get them all done and at the same time meet its other commitments.

So they may contract out part of it. If we are asked to provide some of our capacity, we don’t then want to be caught out and suffer any unexpected delays. We have asked for an HH-65 to be sent here so that we can evaluate the task, upgrade that particular aircraft and work out how many more people we might need. We do hope for a swift ICGS  [Coast Guard procurement arm] decision though, if we are to be able to contribute effectively to meet such a tight deadline. It will be a big challenge.

As far as licensed engineers and lead mechanics are concerned, however, the relevant skills are already in place. We have also upgraded six Dolphins from N1 to N3 standard for the Maryland State Police, a process that includes installing the Arriel 2C2 engine, and we are currently upgrading the first of two Dolphins for the Hershey Medical Center in Pennsylvania.

We are also looking at manufacturing other, higher consumption spare parts for the range of Eurocopter types that fly in the U.S., thus further improving our reaction time for domestic customers. These will obviously be made available in U.S. dollars, which will hedge against currency fluctuations like the one we are currently experiencing. The more we can do that, of course, the more stable our pricing over here can become. That’s part of EADS’ strategy, by the way.

What else is planned?

Two major activities are being planned. Mississippi will become the final assembly, customization and paint center for aircraft destined for U.S. federal government and local law-enforcement agencies–including the U.S. Border Patrol. It will also mature into the AStar assembly line. For the time being, kits for this type will arrive from France but we will have the tailcone and stabilizers produced here and the AStar’s domestic content will increase in the future. If the market supports it, one day we may build them from scratch but, in any case, we can say it will be made in America.

Composite components will also be manufactured in Mississippi [repairs and one-off parts will continue to be produced in Grand Prairie–Ed.] and we will train our employees in the relevant skills on the job. Some of our best people will be coming here to train them but we will use the skills and tools–which include an huge autoclave–at the impressive facility at Mississippi State University.

The U.S. represents an extremely healthy market and we will continue to see growth here, even taking the homeland security segment out of the equation. Many EMS ships are approaching 20 years old and others working in the Gulf off Texas need replacing.

You haven’t managed to penetrate the U.S. military yet.

No, and that remains a big goal for us. We will be bidding for both the ARH [advanced reconnaissance helicopter] and LUH [light utility helicopter] competitions. For ARH we have demonstrated at Fort Hood the AStar and EC 135–both of which have military variants. Either would be built here with mission systems from a U.S. contractor, so the American content will be very high. The U.S. Army would get the technology it deserves, not a reconditioned Huey or a 30-year-old Little Bird.

We will also bid the NH 90 for the PRV [personnel recovery vehicle] program–that would also be assembled here in Mississippi.

Are you happy with the progress you have made in customer support?

You can never be satisfied because there is no such thing as perfect customer support. We now have a fulfill rate–the measurement of how quickly we react and satisfy support requirements–of around 95 percent. It’s a level comparable with that of our competitors, and that is encouraging.

Of course it is vital to offer good customer support, but it shouldn’t be the basis of your entire marketing strategy. It is no good if the best you can offer is to react quickly when it breaks. You also need a modern, reliable product line.

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