June 30, 2006
The U.S. Army's selection of the UH-145 as its new Light Utility Helicopter (LUH) marks a strategic win for EADS North America. In the following Question & Answer session, Chairman & CEO Ralph D. Crosby, Jr. outlines his company's first role as a U.S. military prime contractor, and discusses the future for EADS North America in the defense and homeland security sectors.
Question: What were the strengths of the UH-145 offer to the Army?
Answer: While this is a question for the Army to answer, we feel the UH-145 provides the best overall solution for its Light Utility Helicopter requirement. The UH-145 combines mission capability, affordability and best value for the U.S. taxpayer; while also creating high value jobs for America and expanding the U.S. helicopter industrial base. I also believe our previous homeland security experience, the strength of our industry team and the proven success of our UH-145 Light Utility Helicopter candidate were important for the Army.
Question: How does this success strengthen EADS North America's position as a key player in the U.S. defense and homeland security sectors?
Answer: The selection marks EADS North America's first prime contractor role in a major U.S. Defense Department program, and I am particularly proud of this achievement. It is a major step in the growth of our U.S. business profile, and it demonstrates EADS North America's ability to provide excellent solutions for the U.S. military's needs.
Our U.S. business development strategy also is based on the creation of industrial partnerships, which today includes our joint effort with Northrop Grumman on the KC-30 Multi-role Tanker Transport, and with Raytheon for the C-295/CN-235 Joint Cargo Aircraft requirement. In addition, we continue to look for the right merger and acquisition opportunities, such as our recent purchase of Dynamic Process Solutions, Inc. - a company that specializes in commercial-off-the-shelf consulting and management support services for military and commercial customers.
Question: How will the UH-145 program create new employment opportunities in the U.S. for both EADS North America and its LUH contractors?
Answer: Today, EADS directly employs approximately 1,400 people across the United States and supports over 174,000 jobs through our network of suppliers and vendors. The UH-145 program will add more than 200 jobs to the total EADS employment in America. Much of this will be at the Columbus, Mississippi facility of our American Eurocopter business unit, where 200 additional positions will be created for the LUH program. In addition, 20-40 jobs will be added at American Eurocopter's Grand Prairie, Texas headquarters for program support, including fleet maintenance, parts and service, and training. Another five or six new employees will be hired at the EADS North America Defense office in Huntsville, Alabama, which we opened earlier this year to manage and support such programs as the LUH.
While individual companies in the UH-145 supply chain will be announcing on their own employment growth, I can provide two examples of how the UH-145 will create high-value jobs across the U.S. Turbomeca USA - which builds the UH-145's turboshaft engines - is expanding its Grand Prairie, Texas facility, generating 35-45 new jobs directly related to the LUH program. Another supplier, Thales USA, will transfer the production of its Meghas® avionics suite from Europe to a new facility in Irvine, California for the UH-145 program. Meghas equips several other Eurocopter helicopter models as well, and the manufacturing of avionics for all of these aircraft types will be performed in Irvine.
Question: What will be the program responsibility for the four primary partners in the UH-145 team: American Eurocopter, Sikorsky, CAE USA and WestWind Technologies?
Answer: American Eurocopter is responsible for UH-145 production, assembly and delivery to the Army, and also will provide training services. Its Columbus, Mississippi facility will be significantly expanded to accommodate the LUH activity. Sikorsky will contribute its contractor logistics support expertise and the company's knowledge of the customer, which has been gained in working side-by-side with the Army for many years. CAE is to develop the UH-145 procedural trainer, applying its experience as a global leader in sophisticated commercial and military training systems. WestWind Technologies will bring system integration and modification engineering management expertise, and it has the capability of integrating add-on mission equipment packages and performing modifications if required.
Question: What is the program schedule for production and delivery of the UH-145?
Answer: The Army's requirement is for 322 aircraft, so we're looking forward to a long relationship with our new customer! To meet the service's ambitious delivery schedule, we made a commitment to start UH-145 production ahead of a final Army decision, and we will have the first two helicopters ready for delivery before the end of 2006. In addition, components already have been allocated for the manufacture of six more UH-145s.
Initial aircraft will come off the production line in Donauworth, Germany - which is handling full-scale production of the civilian helicopter version, called the EC145. All UH-145 deliveries to the Army will come from American Eurocopter's Columbus, Mississippi facility. The Columbus site will be significantly expanded in two phases, enabling it to start with partial assembly of UH-145s shipped from Germany, followed by full build-up of the aircraft on a new assembly line beginning in August 2007.
> See the press release announcing the UH-145's selection as the new U.S. Army Light Utility Helicopter.
> For additional information on the UH-145, see the official program Website at: www.uh-145.com.
