Reversal of fortune has Airbus flying high

March 15, 2014 10:32:56 PM

Nathan Gregory - [email protected]


Nothing is ever certain, but the outlook for Airbus Helicopters' Columbus plant and its 280 employees is significantly more promising than it was last May. 


It was then that outgoing Airbus Group's chief executive Sean O'Keefe wrote an editorial in a defense industry magazine about cuts to the Pentagon's budget under sequestration.  


He feared at the time the budget cuts would compromise the future of the UH-72 Lakota helicopter program. It was on a list of $50 million in Department of Defense budget reductions which would cut production for this year from 41 Lakotas to 10 and none at all in 2015. A rally was held later that month by the plant's employees as well as U.S. Congressmen representing Mississippi to leave funding for Lakota production alone. 


In September, the situation looked like it would improve at the plant, if not for the Lakota. American Eurocopter, as Airbus was formerly known, announced it would upgrade to a full assembly line for AS350 AStar helicopters, the best-selling civil and commercial helicopter in the country. After the turn of the new year came an announcement that the DOD budget Congress passed provided for production of 20 Lakotas in 2014 instead of 10.  


Shortly after formalizing its commitment during a ceremony earlier this month to begin making the AStars here March 5, more reports emerged that the U.S. Army's budget proposal for next year called for a $245.4 million increase in funding for the Lakotas. If passed, that would equal a $41.6.6 million contract between the military branch and Airbus for 55 Lakotas next year. The highest number of Lakotas ever produced in Columbus since employees began building them there in 2006 was 53 in 2010. 


So how did the company's fortunes change so quickly? Various media reports state that the Lakotas would replace two other military training aircraft if Congress grants the Army's wish next year. 


Sam Adcock, the Columbus plant's vice president and general manager, said the recent developments are "certainly good news," but remains cautious. 


"It's important to remember this is a proposal and ultimately Congress must pass a budget and appropriate money. That's a months-long process," Adcock said, "But with the decision by Airbus Helicopters to install the AS350 assembly line and the possibility of a significant new Army orders for Lakotas, there is a brighter outlook for our employees than there was. We will work with the Army and key members of Congress to support the budget request and obtain funding for the additional Lakotas. The members of the Mississippi congressional delegation have done a superb job of supporting Airbus Helicopters and Airbus Group Inc. They played a critical role in restoring the program funding to 20 aircraft in 2014. We are hopeful they will strongly support the Army's 2015 budget request as well." 


If the Army's budget request passes, the increased funding and production probably won't mean an increase in employees in Columbus, Adcock said, but it would mean retention and job security for the ones there now. 


"The Lakota program is all about the strategic importance of our work in Columbus and our market position in the United States. This is the same strategic rationale behind the addition of the AS350 assembly line in Mississippi," Adcock said. "Clearly, we want employment at the Columbus plant to remain stable in the near term and grow over the long term. Without the outstanding performance and efficiency of the Columbus plant's workforce, this strategy would be much more challenging." 


Another reason for the turn of events is likely the quality of the aircraft itself, he said. As the delivery of the 300th Lakota approaches, Adcock said every one has been built on time and on budget. 


"It has been the goal of the company over the last year to create a situation in which total employment would remain nearly stable and that we could retain our skilled employees who have done such an outstanding job," he said. "The fact that our Columbus plant employees have produced nearly 300 Lakotas on time, on budget and meeting the Army's stringent quality requirements is one important reason the Army and the Department of Defense do want to buy more of these aircraft." 


He added that the Lakota program has been one of the most successful acquisitions programs in the history of the Army as well as the Department of Defense. 


The approximate total Lakota program value to date is just under $2.5 billion, Adcock said.

Nathan Gregory covers city and county government for The Dispatch.