Wednesday, March 11, 2015
Erickson Restructures for New Economy
On Feb. 5, Erickson Incorporated announced that it had initiated a drastic corporate restructuring process to, “create significant new efficiencies and cost reductions, improve profitability, and enhance the Company’s overall competitive position.” This process also meant that the company would lay off approximately 150 of its employees, primarily in its United States offices. Rotor & Wing talked with Susan Bladholm of Erickson about the circumstances behind Erickson’s decision, and what it means for the future of the Portland-based company.
“First of all, I would have to say that we are not struggling,” says Bladholm, citing an internal process whereby Erickson has incrementally shifted its business for the past six years. “We really see this [restructuring] as the final chapter. The tension has been, ‘How do we diversify so we can strengthen our business for the long term?’”
Originally a heavy-lift air service, Erickson now contracts its fleet of fixed-wing and rotorcraft for a variety of commercial missions. “A lot of our prospects simply don’t know the broad range of services we now offer,” says Bladholm. “They just think of us for the aircranes.”
Erickson’s four new business segments—Government Aviation Services, Oil & Gas Aviation Services, Commercial Aviation Services, and Manufacturing & MRO—will help the company send a clearer message to potential customers. But they are also Erickson’s way of ensuring survival in a tough market. In spite of industry budget cuts, Bladholm says, “We believe having the four-legged stool of these business units—rather than just one, two, or three—that the diversification is really going to bring us a lot of strength.”
Restructuring came at a stiff cost. Layoffs were mostly concentrated in Erickson’s Medford, Oreg. location, where demand was expected to decrease the most. Says Bladholm, “The intention has been: let’s cut deep. Let’s not have to go back in a quarter or two quarters or three quarters to do this again.”