Industry Perspective: Eurocopter’s CEO focuses on timely deliveries
Under pressure from its competitors, Eurocopter–still the number-one manufacturer in the civil helicopter market–is working hard to cope with a rapid production ramp-up of its own helicopters at a time when rivals are introducing a dizzying array of new models.
Simultaneously, customer support improvements have become a priority. The challenge for Eurocopter lies in staying on track with current development programs, meeting production schedules and satisfying customer expectations for support.
CEO Lutz Bertling, who succeded Fabrice Brégier four months ago, thinks the company is well positioned to meet each of these challenges. He talked with HAI Convention News about the company’s strategy.
You recently said that your priority is on-time customer deliveries. How big a challenge has that been?
Today, about 96 to 97 percent of our deliveries take place on time. We want to keep this level while ramping up our production rate by 20 percent in one year. A detailed supply-chain diagnosis is ongoing, which will lead to a precise action plan in the coming weeks.
One Eurocopter official recently expressed concern about new competing products from Western makers. He stated that they will soon be equal in performance and cheaper than Eurocopter’s. What are you doing to keep competitive? How much per year are you spending in R&D?
This is a fierce competition. Other makers have a huge military background, and that’s where part of their strength comes from. They will come with new products soon. We are upgrading our range, developing new technologies and reducing our production costs. In research and development, we are spending 40 percent more this year compared with 2005.
Another Eurocopter executive said recently that customer satisfaction was low in terms of spare parts, equipment support, repair and overhaul. He said a number of customers are really angry at this poor service, yet you had launched a customer support improvement effort in 2003. What are you doing to improve customer satisfaction?
We indeed had to improve customer satisfaction, but the situation was not as terrible as you describe it. We launched improvement projects and a major internal information campaign to make sure that customer satisfaction is the priority for all Eurocopter employees. Our latest customer survey, last year, shows a great improvement in our performance, for example, in spare parts distribution.
How difficult do you think it will be for the EC 175 to catch up with the AgustaWestland AW139? It will not be certified until at least six years later.
Our intelligence sources show that AgustaWestland is already thinking about a significant evolution of the AW139, deliveries of which started only recently. This might be the evidence of a need for a superior aircraft. Obviously, the EC 175 aims at being the best medium twin of the next decade.
In recent years, a number of Eurocopter programs have been late. For example, the EC 145 and EC 225 had protracted developments. How can you guarantee the EC 175 will be on time?
The EC 175 program will be on time. Our current program management procedures take our experience into account. For example, we use the “earned-value management” method, which factors in not only the time you spend doing something, but also the value of it in the program.
How are the Sikorsky S-92 and the AW139 eating into your offshore market share since their inception? AgustaWestland has sold more than 200 AW139s.
Our Super Puma series models are bigger than the S-92. The EC 225 is becoming the market’s benchmark. Indeed, the AW139 is well positioned and is chalking up more and more sales. However, bookings for the [smaller] EC 155 have doubled in two years.
What technologies do you see as key for civil helicopters that will enter service between 2010 and 2015?
Our main goals for helicopters entering into service during this period are lower life-cycle costs, better comfort, better acceptance by the environment and an improved flight envelope. Therefore, key technologies include–among others–monitoring of airframe with smart patches, better rotor efficiency and vibration-cancellation devices. In the flight envelope, satellite-guided approaches, more economical de-icing devices and enhanced-vision systems should help. The ultimate goal is to make operating helicopter operations independent from weather.
What is the production rate for the AS 350 AStar at your Columbus, Mississippi facility? Are you back on track? I remember the first delivery was at least one year late.
In 2007, we will deliver 52 AS 350s, 48 of which are under the U.S. production certificate. We are on track with production. The first production-certificate AS 350 delivery was on schedule. Currently, we have 139 employees in Columbus. We are on target with our hiring plan, which will total 200 to 250 employees.
How different is your style of management from that of former CEO Fabrice Brégier?
We worked together for three-and-a-half years and had a very good relationship, both professional and personal. Of course, cultural differences remain and I’ll never try to be the best Frenchman nor would he have tried to be the best German.
We are both team players. The difference comes from the different times we were or are in. Fabrice had major campaigns to win; he was oriented toward the exterior. I’m more in a period of contract execution. Delivering on time is the priority.
How can the competition be so fierce with AgustaWestland and yet your cooperation in research fields so intense?
Indeed, some technological know-how is shared in those programs. But keep in mind that today the leading edge of helicopter technology is European. We must keep this leadership in Europe. It is a major advantage to set the standards in Europe, much bigger than the drawback of sharing some knowledge with a competitor.