Acting CEO Protests US Army Award Of Major Military Contract To French-German Conglomerate

MD Helicopters, Inc. Acting CEO Lynn Tilton has called the US Army's selection of a European conglomerate to receive a multi-billion dollar military aircraft award an "outrageous decision completely at odds with supporting American industry." Ms. Tilton said that the award of a major American military contract to a foreign company belies rationality when US companies produce superior products for better value.

"I am profoundly disappointed by this decision," Tilton said from her office in New York. "When US companies like MDHI provide high quality products at outstanding value and cannot get support within their own country, it is a very sad day for both American companies and American workers. The United States is struggling to stay competitive with its global neighbors and our own taxpayer money is being poured into the coffers of foreign companies when that money could be going to re-build this industry in our country, it is a true injustice."

Ms. Tilton is also founder and principal of Patriarch Partners, LLC, a $5 billion private investment firm that, through its investment funds, holds a controlling interest in MDHI. The Patriarch funds acquired its interest in MDHI last summer. At that time, the Company was on the brink of insolvency. Over the past year, MDHI has engaged in a major financial and operational turnaround process to include vertical integration and reigniting its supply chain, the institution of lean manufacturing and flow production and the upgrade of its legendary technology.

Ms. Tilton said MDHI is a classic American turnaround story and did not receive the same level of consideration as its competitors. "The process was seriously flawed and perfunctory, at best. Had the military taken the time and expended the energy to conduct serious diligence and come out and kick the tires, the conclusion would have been inescapable. The simple reality is that there was no attention to substantive matters. No rational investor would commit capital absent a recent on-site review. There is absolutely no question in my mind that the MDHI bid offered by best overall product and value."

MDHI's analysis of the winning EADS bid provided to the Company, Tilton said, demonstrates that MDHI offered the lowest cost across the board for aircraft and logistics support. MDHI has determined that the US Army will commit more U.S. taxpayer money to the awarded contract, which the US Army selected based an assessment of risk that was devoid of any recent on-site due diligence at a company well-publicized for its comeback in recent months.

The US Army announced on Friday its selection of a unit of European Aeronautic, Defense and Space Co. ("EADS"), the French-German aerospace conglomerate, to build a new fleet of 322 light utility helicopters in an award that could be worth as much as $3 billion over the next 20 years. Sikorsky Aircraft Corporation will provide contractor logistics support for the program.

To compete for the Army contract, MDHI had teamed up with DynCorp International, GENCO and Aviation Systems of NW Florida, Inc. (ASI) for logistics and support, to compete for the Army contract.

"I have no doubt that MDHI met or exceeded all U.S. Army requirements, the MD Explorer offers the exclusive NOTAR anti-torque system that allows for significantly lower noise, increased safety and the ability to operate the aircraft in confined spaces typically inaccessible to other helicopters," said Tilton.

FMI: www.mdhelicopters.com