Glitches with the US Marine Corps H-1 Huey upgrade programme have cost Bell Helicopter $50 million in the last quarter of 2006 and may have prompted the departure of the unit's former head, Mike Redenbaugh.

In federal filings yesterday, Textron reported that problems in the combined forces H-1 programme (for the AH-1Z Cobra and the UH-1Y Iroquois) have led to US Department of defence charges of $50 million for project delay. When the company announced the shock resignation of Reddenbaugh, it also foreshadowed the announcment of unspecified extraordinary costs relating to the H-1. Shares dropped by 6% on Friday on the news, which did not included specific numbers, before recovering to finish down 2.8%.

The H-1 programme was initially scheduled for delivery in 2005, which has slipped to 2008. The first production AH-1Z and UH-1Y were completed in June, and in September were rolled out in preparation for flight tests. But the initial operational capability is not planned until September next year for the UH-1Y and 2011 for the AH-1Z.

The original plan was to remanufacture USMC AH-1Ws to Zs and UH-1Ns to Ys, but to avoid taking each Huey out of service for the two-year programme. However, all but the first several -Ys will have new-build airframes.

Revenue increased $160 million in teh Bell division in the fourth quarter, however the unit's profit fell $73 million.

The problems with the division may have led to Redenbaugh's departure, with more bad news due to be delivered today on conference calls to analysts, notably that the ARH-70 US Army Armed Reconnaissance Helicopter requires design changes.