Acting CEO Protests US Army Award Of Major Military Contract To
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
"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