Eurocopter France to transfer production of fifty AS350s to Mississippi

Eurocopter France to transfer production of fifty AS350s to Mississippi 16 Sep, 13, Source: HeliHub.com

Unions in France are in consultation with Eurocopter regarding the proposed transfer of production of fifty AS350 helicopters from France to Mississippi.  Also included is the production of  parts for a further ten airframes. HeliHub.com understands that this move is a result of US military budget cuts which are expected to halt the American Eurocopter UH-72 production line at least a year earlier than originally expected.

The US budget originally set aside funding for 31 UH-72 Lakota helicopters in Fiscal Year 2014 and 10 in FY 2015, but the proposed cuts would reduce the purchase to 10 in 2014 and none the following year.

Sean O’Keefe, CEO of EADS North American (American Eurocopter parent company), said in May 2013 that cuts to the Pentagon budget under the “sequester” budget reduction plan could force the company to slash production of the UH-72 Lakota. While company representatives continue to lobby Congress to reconsider the budget, the base line is that many of the manufacturing headcount of 320 Columbus would lose their jobs. Moving the production of fifty AS350s to Columbus would go a significant way to resolving the gap there, but it would just transfer the problem to France.

Termination of the Lakota will also have some impact on Eurocopter’s factory at Donauworth in Germany and Kawasaki’s plant in Gifu. It is not widely realised, but every EC145 – Lakotas included – start off life in Japan. A small number – 30 to date – go through to completion in Japan with Kawasaki.  Every other cabin frame is then shipped to Germany, where all EC145s other than the Lakotas are produced. Germany adds a small amount of work on a Lakota airframe before it gets shipped off to Columbus for completion and delivery to the US military.

The French unions are also looking further ahead. They know that new production lines were started in Brazil, Mexico and other countries as part of the offset agreements which enabled Eurocopter to win the military sales. These agreements have a longer-term offset plan, well beyond the end of the production of the helicopter order they relate to. The offset business is certainly different from 15-20 years ago – such as AS532 production in Switzerland, where Eurocopter walked away just as soon as the last helicopter was produced.  Rightly or wrongly, manufacturers including Eurocopter and others have sold their offset deals to countries on the premise that they are “setting up their national helicopter industry” for them.

With the move of fifty AS350s to Mississippi, the unions fear that further production will be lost from France to bolster other foreign production lines set up on more recent offset agreements, perhaps including Kazakstan. The unions are also wondering whether the international manufacturer – to be renamed Airbus Helicopters from 1st January – is intentionally reducing it’s dependence on the French economy – earlier this year the French representation on the European Eurocopter Committee was reduced from eight to six, while Germany was able to retain it’s headcount of four.

Jeremy Parkin – HeliHub.com

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