Louisiana Economic Development has terminated their contract with Bell Helicopter citing its lack of performance at its aircraft assembly center in Lafayette.
Tuesday, LED Secretary Don Pierson issued the following statement about Bell Helicopter and the decision to terminate the contract.
This center, according to a release, is where the company first proposed assembling 505 JetRanger X helicopters and later proposed substituting 525 Relentless helicopter subassembly operations.
“Following four years of underperformance by the company and a failure to produce either of the agreed-upon operations, LED has elected to terminate its Cooperative Endeavor Agreement with Bell Helicopter,” Secretary Pierson said. “From the beginning of this project in 2013, LED valued Bell Helicopter as a world-class manufacturer with world-class aerospace products. We regret that our experience with Bell Helicopter has left the State of Louisiana with no other choice but to terminate the CEA for a once-promising project.
“When global demand for helicopters softened, and Bell Helicopter expressed its desire to move assembly of the 505 JetRanger X aircraft from Louisiana to Canada, we agreed to work with the company despite Bell Helicopter’s original commitment to assemble this new helicopter in Lafayette. The company proposed substituting cabin subassembly — not full assembly — of its 525 Relentless helicopter, along with defense-related manufacturing activities at the Lafayette Aircraft Assembly Center, which the State of Louisiana funded at $26.3 million for the express purpose of hosting aerospace assembly operations.
“Negotiations in 2016 led to an amended CEA in 2017 that enabled the company to hit a lower employment threshold of 95 new direct jobs instead of the originally committed 115 new direct jobs. The State of Louisiana extended the term of the CEA from 2029 to an ending date in 2031 to better capture the original intent of the project’s economic impact and value.
“Under the amended CEA, Bell Helicopter failed to achieve continuous commercial 525 Relentless cabin subassembly operations by Dec. 31, 2017. In February 2018, Bell Helicopter unilaterally informed the State of Louisiana about its proposal to move the eventual 525 Relentless helicopter cabin subassembly operations from Lafayette to Amarillo, Texas, and to substitute other non-assembly operations in Lafayette.
“The amended CEA also required the company to provide 25 new full-time jobs in 2017 and 95 new full-time jobs in 2018. Today, Bell Helicopter employs 22 at the site.
“Despite LED’s efforts to accommodate Bell Helicopter, the company never identified a path forward for meeting its obligations to the State of Louisiana. The State of Louisiana has met its obligations for the project; Bell Helicopter has not.”
“We regret that we must terminate the CEA and close out the project, but the company has defaulted on numerous occasions, leaving us no other course. We must protect the interests of the State of Louisiana and its taxpayers. We continue to ask the company to agree upon an amicable settlement of its financial obligations to the State of Louisiana, and we hope to resolve this matter in a positive fashion for all.”