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Heli-Expo 2010: MD Helicopters 'stumbled' but did not fall
Speaking to reporters at the Heli-Expo exhibition in Houston, Lynn Tilton, CEO of MD Helicopters, said while it had been a tough year for the company, it was not going into bankruptcy, never faced that prospect and had some ‘incredible programmes’ for 2010.
In an at times passionate presentation, Tilton said the company had managed sales of 40 helicopters over the past year but had expected sales of around 70 helicopters and had 'foolishly' purchased inventory to meet that level of demand.
‘This was a tough year because people couldn’t get financing… people had no access to capital, the value of their assets were artificially inflated, they were unable to borrow real money to pay down those debts and a lot of the orders that we thought would come to fruition, people just couldn’t pay us,' she said.
‘And we foolishly, in order to meet customer desires and deliver quickly, we bought a lot of inventory and we sat on it, and it became a fight between suppliers paid and suppliers not paid. And that took our eye off the ball.’
Citing a competitor by name that she claimed had been spreading rumours that MD Helicopters was going into bankruptcy, Tilton said she was becoming ‘personally offended that lying, cheating and stealing was becoming a way of life’ in the industry.
She said after lending the company ‘a lot of money’, the debts were able to be paid off and, although they were still sitting on a lot of inventory, they hoped to work through it this year.
In order to try to raise the level of growth for the company, MD is now beginning to aggressively focus on governmental and large organisation programmes rather than specifically target one-off purchases.
International opportunities the company is targeting include Jordon, which has already chosen the MD 500 for a number of applications, as well as Romania, Kenya and a number of countries in Asia.
‘One of the big opportunities is Asia and we have been in a lot of talks with countries in Asia about potentially a minority interest in MD - that’s one of the advantages of owning your own company - to a ministry of defence of a country. That would enhance the growth and the prospect for a long term, larger MD.’
Tilton said such a move might have happened in 2009 if she had not been focused on restructuring the company’s management team to create a more streamlined organisation able to face the financial crisis.
‘Those discussions will continue to happen and that is the next step for MD to have the breadth and depth and strength to be a long term global player. I will never let go of MD until I know it is one of the big players in the world for a long time to come.’
By Tony Skinner, Houston
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