AgustaWestland pins hopes on civil market

AgustaWestland is the latest UK defence contractor to announcebig job cuts, with up to 375 people to be laid off, largely from its Yeovilfactory, in response to reduced helicopter purchases by the UK Ministry ofDefence as well as slowing export sales. The exact number of redundancies isyet to be determined, and the company has launched a voluntary scheme tominimise the number of compulsory cuts it will have to make.

The final number will be known in early 2012, following a90-day consulting period, but could be in excess of 10% of the company’s UKworkforce of 3,600, including 3,400 at Yeovil.

The move follows BAE Systems’ end-September announcementthat it was cutting nearly 3,000 UK jobs in response to spendingcuts in programmes ranging from the Eurofighter Typhoon fighter to Hawktrainers and Tornado attack jets.

The Finmeccanica division hopes to shift reliance away fromdefence business with the introduction of its AW169 multi-purpose civilhelicopter, which is being readied for delivery from 2015. AW expects to sell1,000 of the 10-seat models over 25 years, to transport and offshore operatorsand for law enforcement and surveillance duties.

The AW169 will make its first flight next year, and one offour prototypes will be based at Yeovil, which is focussing its attention onmain and tail rotor and transmission development. But the company readilyadmits that in the short term the Yeovil plant, which assembles the AW101,Super Lynx and AW159 models, will increasingly have to make do with ongoing supportactivity for the UKarmed forces. AW169-2.jpg

And, it has yet to be decided how Yeovil will fit into theAW169 programme once it moves from development into production, and there is noguarantee that the plant will be a mainline production centre. The AW139, for example,is assembled in Italy andthe USA,with a third plant soon to come online in Russia.

Managing director Ray Edwards said: “These steps together -the increased civil aircraft work-flow, the launch of the AW169 and thestreamlining of the workforce – will place our UKoperation on a strong footing and enable us to keep the skills needed for the UK to retain aviable helicopter capability. 

“Our military business remains central to our success.This said, extending our capabilities in civil production and competing forexport programmes, both areas where the government has shown considerablesupport, are the keys to AgustaWestland’s future.”

Ultimately, AgustaWestland should have plenty of room togrow in civil markets – assuming its product can match the appeal ofEurocopter, which is increasingly a runaway market leader. As the table clearlyshows, AW is a solid number two in the UKcivil market, and growth appears to be coming at Bell’s expense. Globally, AW is the clearnumber three; again a flagging Belllooks to be providing opportunity to gain ground – but that means grabbingsales from Eurocopter.

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