Following a year of tumult and rumors of its impending bankruptcy, MD Helicopters CEO Lynn Tilton used her company’s Heli-Expo press conference on Sunday to update the world on the company’s fortunes and her view of the state of the industry, delivered in her characteristically iconoclastic fashion–both content- and couture-wise.
“I decided to come back as the dominatrix of MD Helicopters,” Tilton said, standing beside the podium in black slacks and a black leather jacket cinched tight with a large gold buckle, repeating a sobriquet previously bestowed upon her in print.
“It’s been a rough year,” Tilton said, acknowledging the unspoken questions about the company’s future. “I realize that if I didn’t have this press conference, that [those questions and rumors] would continue. So as always, I come to HAI to fight the dark forces that always seem to surround us.”
Tilton blamed another major OEM for spreading doubts about MD’s solvency. “I’m starting to get personally offended that lying, cheating and stealing are becoming a way of life,” she said, before she tackled the rumors head on.
“Let me clear the air: MD is not going into bankruptcy; MD is not going away; and MD never faced that issue,” Tilton said, then addressed the issue of unpaid vendors. “We’ve got about $11 million in [overdue] payables. Let the truth be told. MD stumbled by believing it would have more orders than it did.”
While noting the economic downturn had adversely affected the entire industry, Tilton acknowledged MD was responsible for many of its own problems.
“We had our own version of stupid,” Tilton said. She said the company had ordered materials to make more helicopters than it could reasonably expect to sell, leaving it awash in parts and accounts due. MD sold about 40 helicopters last year rather than the 70 previously anticipated. Customer service also took a hit, she admitted. (MD dropped from number two overall to number five in customer support in AIN’s 2009 Product Support Survey.) Also, an STC for an EMS package took six months longer than expected to receive certification, leaving customers waiting for promised deliveries of the retrofit.
As part of its response to its problems, MD has restructured its management. Tilton was joined on the dais by recently installed president Robert Molsbergen, Carl Schopfer, v-p, engineering and programs, and Bill Heinz of Patriarch Partners, which owns MD.
Addressing the future, Tilton noted several positive developments. The company is on track to receive certification for a glass cockpit for the MD 500 in April. It is aggressively moving to in-source production (including bringing manufacture of the MD 902 fuselage to MD’s Mesa, Ariz. factory, from TAI, which makes them in Turkey). MD has completed sales to several foreign governments and it is in discussions with the defense departments of several Asian nations interested in buying a minority interest in the company, which she said could boost sales in that region.
“MD’s got some incredible programs for 2010. We have a good [order] book for this year,” Tilton said. “We see increased need overseas, and frankly there is the threat of war. Seeing what’s going on in Afghanistan and Pakistan and also in the Mideast, we want to be prepared for providing platforms and be ready to deliver in the quickest time, if need comes to be, so that is our major focus.”
As for any potential sale of MD, which Tilton took control of five years ago when it was hemorrhaging money, she said not only is the company here to stay, so is she.
“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,” Tilton said. “I’m in no rush. It has been turned around. It just needs to be better.”
