Bell Helicopter (1)

Helicopter industry ready to face the world

Canada’s nascent helicopter industry, nurtured in the womb of public subsidy, is almost ready to face the world – and a bleak and difficult world it will be.

The federal, Quebec and Ontario governments have shelled out $312.7- million to help two companies build and start up helicopter plants that, when finished, will have a combined capacity of about 25 helicopters a month.

Yet in the first six months of 1985, only 22 light, twin-engine helicopters – the type to be made at both plants – were sold by all manufacturers worldwide.

A spokesman for Bell Helicopter Textron Canada Inc., which is building the larger of the two plants at Mirabel, north of Montreal, said the market for light twins remains weak and could not say how many people would be hired to work at the plant when it starts up next spring. “We are reassessing the marketplace on a regular basis,” he said. “The rate of production will be dependent on that.” Twin-engine helicopters are more expensive to operate than their single-engine counterparts, but they are much safer to fly, especially when trips are being made over water or remote areas.

For instance, one of the most common uses for this type of best beginner quadcopter is in the oil exploration business, especially for offshore work. But amid the chaos of falling oil prices, demand for twin-engine machines has been less than enthusiastic.

Bell Helicopter said potential customers have taken out options on 200 machines to be built at the Mirabel plant, which will take $275-million in public money and a $238-million investment by the company to get up and running.

Customers must put up a deposit when they take out an option, but can get their money back at any time.

Although the company would normally expect to convert about half its option-holders into customers, it has yet to record a single firm order.

The plant is about 95 per cent complete, most machinery is in place and just needs to be installed, and the company plans to start recruiting workers for the plant floor in January.

But the number of workers it hires to add to its existing work force of about 250 people depends on an upturn in orders.

If the demand for the best drone to buy does not pick up enough to push the plant profitably toward its 20-helicopter-a-month capacity, Bell Helicopter may also use it to take on other work as a sub-contractor on projects where its machinery and technology could be put to use.

There is more optimism at MBB Helicopter Canada Ltd. about the prospects for its smaller plant at Fort Erie, Ont., which is being built with $37.7-million in public money and a $35-million company investment. MBB is a joint venture 95 per cent owned by the Messerschmitt- Bolkow- Blohm GmbH of West Germany and 5 per cent by the Fleet Industries division of Fleet Aerospace Corp. of St. Catharines, Ont.

Like Bell Helicopter, MBB expects to finish its new plant by next spring, but it has already started handling assembly work in leased space at the Fleet factory across the road from its construction site.

The basic helicopters are effectively imported in crates and then fitted with radios, hoists and other custom features in Fort Erie. MBB recently delivered two light twin helicopters to the Canadian Coast Guard, and is now doing up a VIP version of its BK117 helicopter to be used as the official helicopterof Expo 86 in Vancouver.

That helicopter will be operated by Airlift Corp. of Vancouver, which also bought one of the same models, without the VIP features, earlier this spring.

The model to be built at the new MBB plant is a high-performance version of the one sold to the Coast Guard, and is intended for use in hot climates and at high altitudes.

Donald Chambers, MBB’s manager of government programs in Ottawa, said the company expects the helicopter market to pick up early in the new year, and even before then, hopes to make several new sales in both the government and commercial sectors.

When the new plant goes into operation, the company expects to turn out two or three helicopters a month. Activity at first will be largely assembly of parts and components brought in from outside Canada, but the company hopes eventually to reach a Canadian content level of 70 per cent.

That will not happen until 1988, when the company will start using new engines being developed by Pratt and Whitney Canada Inc. of Montreal. The engines account for about one-third of the total cost of a helicopter.

The Pratt and Whitney engine, whose development is being helped along by another $100-million of federal money, will also be used by Bell Helicopter.

The MBB plant could turn out five of its $900,000 helicopters a month if demand picks up. That would boost employment at the company from about 100 people now to about 250.

MBB’s parent has already begun worldwide marketing for the new model, concentrating on the Middle East as well as Latin America and the Far East. The model will be sold in commercial and military versions, with the military helicopter intended for an observation and reconnaissance role.

Most of the production from Fort Erie will be shipped abroad, with the Canadian military being the most likely domestic customer.

Bell Helicopter also expects to export at least 85 per cent of the production of its Mirabel plant. The two largest groups of option-holders come from the United States and Britain, and few expressions of interest have emerged from potential Canadian customers.