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How Bad is it at Bell Helicopter?

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It was Bowl season, a time of celebration. And right there celebrating among 'em was Mike "Red" Redenbaugh, wandering around the Bell-sponsored Armed Forces Bowl like a regular Jerry Jones. His big face beamed into living rooms across the nation as he proclaimed the company's strength and promise.

And then a few weeks later he was running a routine staff meeting when his secretary entered the conference room and told him he was needed in another meeting right away. He walked into his office to find Textron (Bell's parent company) chief Lewis Campbell waiting for him. Red was fired on the spot.

Events over the last few days show things might be getting worse before (and if) they get better under new leadership. Recently, Inside Defense reported that the Army, frustrated by schedule delays and cost increases, directed Bell to stop work on the Armed Reconnaissance Helicopter. Army acquisition officials have issued a "show cause" letter to the contractor setting a 30-day deadline for the company to rectify the difficulties that have led to significant cost growth and a one-year delay. If Bell cannot sufficiently solve the problems, then they could lose the program altogether.

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Inside Defense has also reported that the Pentagon is planning to move VH-71 production overseas completely instead of allocating a significant portion of the work on the next Presidential helo to Bell. The report cited the government's desire to "reduce risk" as the reason behind the plan. Of course, this battle isn't over yet as lawmakers are not going to watch their pork sail across the pond even if the company in their district has proven incapable of making cost and schedule milestones.

Neither of these moves are good signs for Bell, a company that is fighting to regain the stability it enjoyed during the Vietnam era, the heyday of the Huey. A lot was done on Redenbaugh's watch including a reorganization that consolidated its military production effort to Amarillo, but these recent developments have reminded Bell (and Textron) not to confuse activity with outcomes. Whatever the company accomplished in the last few years, it wasn't enough to keep Red onboard or to regain the trust of the Pentagon.

So how slippery is this slope?

(Gouge: SC)

-- Ward

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