UP COLLECTIVE

MD Helicopters

From Howard Hughes to Lynn Tilton, a history still in the making.


1990s and 2000s

MD530F

While most of the country saw economic security and expansion during the boom times following the early 1990s recession, unexpected events brought financial difficulty to McDonnell Douglas. In the late 1980s, they won the US Navy Advanced Tactical Aircraft (ATA) contract and began development of the A-12 Avenger II as a replacement for the A-6 Intruder. But after a litany of problems with the program, it was canceled in 1991 at great cost to McDonnell Douglas.

The end of the Cold War also ended lucrative military contracts. After layoffs and restructuring, McDonnell Douglas merged with Boeing in 1997. Wanting to concentrate their helicopter operations on producing military aircraft, Boeing had planned to sell the civilian line to Bell the following year. However, the Federal Trade Commission raised concerns over the sale and it was canceled.

In 1999, Boeing found a buyer with RDM Holding, a Dutch company with a variety of military investments, and MD Helicopter Holdings was born. They promptly built a new facility across the street from Boeing at FFZ (Falcon Field, Mesa AZ). In the purchase, RDM gained the 500, 600, and 900 helicopter lines along with the "MD" initials, but not the McDonnell Douglas name.

Boeing also kept the production of the AH-64 Apache.
While Howard Hughes had moments of downturn during his ownership of what would eventually be MD Helicopters, the time period from the Dutch-purchase in 1999 until 2005 was perhaps the company's darkest hours. Commercial sales faltered, product development stalled, parts availability and support ceased, debt piled up and customers fled.

As the company was reaching the brink, with bankruptcy imminent, along came their savior. And this rescuer arrived in the form of a former Wall Street investment banker who had, not long before called it quits and settled in for a luxurious retirement. Enter Lynn Tilton.

The Tilton Years

MD520N

Born in the Bronx and raised in New Jersey, Tilton earned a BA from Yale and an MBA from Columbia before venturing into the male-dominated world of Wall Street. After 20 years, she'd had enough and made enough to walk away.

Tilton soon realized that retirement was not for her. Following a personal calling to save and create American jobs, she founded Patriarch Partners and began buying, as she says, "beaten down brand names" and restoring them to profitability, thus saving the employees their livelihood.

This quest has led her to restructure hundreds of companies and save hundreds of thousands of jobs. But one business piqued her interest. When she was offered the opportunity to pull a floundering helicopter company out of the drain, she jumped at the chance.

"I wanted Howard Hughes' legacy," Tilton proclaims. She also admits to being foolish and naive because, while she understood finances, she did not understand the unique attributes of the aviation industry. But that did not stop her as she took on the chairman and CEO positions of her newest acquisition: MD Helicopters, Inc.

Tilton applied what she knew from her other businesses: improve the product and make the customer happy. This involved advancing the technology in her helicopters and recovering the lagging product support to regain those lost customers.

Pilots love flying MD helicopters and she wanted to make sure they also loved the company. To make that happen, she knew she'd need the right people. One of those people is Chief Operating Officer Craig Kitchen, who after graduating from the Air Force Academy, spent 10 years active duty as a pilot flying Lockheed C130s and instructing in Cessna T37s.

Following his military service, Kitchen spent 17 years with Garrett Turbine Engine Company where he was first exposed to helicopters as the program manager for the T800, the engine chosen for the eventually-canceled AH-66 Comanche. During this same time, he had his introduction to MD during their development of the NOTAR system and its use on the MD520N. He left the aviation world for several years before meeting Tilton in 2007 when she convinced him to come on board with MD.

Kitchen concedes the difficulty of his early time with MD as they spent several years "trying to right the ship." He explains, "The company had been neglected by its previous owners. We spent a lot of time improving aftermarket support, the product, manufacturing processes, quality, everything across the board. We were bringing the platforms back to their glory."

A Vietnam-era pilot himself, Kitchen wanted to restore the confidence and admiration that the OH-6A and its derivatives once had. A large part of this refocusing effort was centered on their original core, the military. "The modern battlefield is urban warfare and our platforms are perfect for that," Kitchen states.

Under Tilton's direction, improvements have been made across their portfolio. On the military side, the evolution of the original OH-6A Cayuse brought about the current 530F Cayuse Warrior. That model has now been further developed into the 530G with added performance and more advanced weapons systems. As these improvements were made, the militaries of the world took notice and orders came in. However, it wasn't just the military that MD went after. Tilton wanted the reform to translate to the commercial market as well.

To compete in the modern civilian market, MD moved to their next phase, which involved, as Kitchen says, "controlling our destiny." This meant gaining control of as much of the manufacturing process as possible, which worked well with Tilton's crusade of bringing fabrication and jobs back to America.

The 500 and 900 series fuselages are both now constructed at the Mesa AZ facility, along with the fabrication of over 2000 parts now made in-house. This required a great deal of investment in MD, which Tilton made clear she was willing to do.

The infusion of capital has enabled the advancement of the current and future product lines. One of the more notable items is the addition of glass-panel cockpits across all models, both new and retrofit, which will be completed within the next year. To help customers gain access to these new technologies, they have aggressively, and successfully, marketed their 500E-to-530F conversion program.

The 902 light-twin has received such extensive upgrades, and with more in the pipeline, that it will soon take on the new moniker of the 969. And this past spring, the 6XX concept was debuted. With the stretched fuselage of a 600N, a 4-bladed tail rotor, 6-bladed main rotor, glass cockpit, and fly-by-wire, this all-new 8-seat aircraft is targeting just about every market including law enforcement, EMS, military and VIP.

MD's progression isn't limited to the building of aircraft. In 2014, they introduced MyMD.Aero, a web-based portal for aircraft management, parts ordering, product manuals, and more. Just recently, a new training group has been formed in-house, primarily of former military and law enforcement pilots, to provide a one-stop-shop for the aircraft, as well as the people flying them, to receive everything from initial tactical skills all the way through to aerial gunnery.

The reasoning behind this, as Director of Aviation Training Stephen Schiller states succinctly, "We own it, we build it, we will train in it." Kitchen says that these changes, and many more on the way, are evidence of the company's renewed commitment to responding to the "voice of the customer."

Conclusion

It is now 12 years into the tenure of Lynn Tilton at MD Helicopters. Has it been a successful endeavor? The current environment seems to indicate so. The bumpy road this historic company has been down has been smoothed with much-needed financial backing.
An apparent desire to improve every aspect of the product line as well as add new models along with vastly improved customer support appears to be bringing back formerly-scorned customers in a market that is not often quick to forgive.

Time will tell if these recent changes will translate to continued commercial success. Tilton recently stated, "This phoenix has truly risen and it will stay in the air for a long time to come."

MD Helicopters is a company with a captivating narrative. A story with rich history and more than a few chapters left to tell.

Brent Bundy has been a police officer with the Phoenix Police Dept for 26 years.
He has served in the PHX Air Support Unit for 16 years and is a helicopter rescue pilot with nearly 4000 hours of flight time. Bundy currently flies Airbus AS350B3s and AgustaWestland AW119s for the helicopter side of Phoenix PD's air unit and Cessna 172/182s for the fixed-wing side.


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