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Saturday, September 1, 2007

Rotorcraft Report: U.S. Army, Bell Face Fight For ARH Production Funding

MILITARY/OBSERVATION

Bell Helicopter has sold the U.S. Army on a plan for salvaging the delayed $4-billion-plus ARH-70A Armed Reconnaissance Helicopter program. Now it and the Army must get Congress to sign on to that plan.

Elements of the recovery plan include moving assembly of the Model 407-based ARHs from Bell Canada in Mirabel, near Montreal, to Bell’s Fort Worth, Texas plant to cut costs and schedule risk. The House of Representatives, however, isn’t sold yet.

Within weeks of that plan being aired, House members on Aug. 5 eliminated all of the Army’s requested ARH production funding for Fiscal 2008. President Bush’s budget request included $468.3 million for procurement and $82.3 million for research and development. The procurement funds would have covered acquisition of 37 aircraft. The Army wants to buy a total of 512 ARH-70s to replace aging and overworked Bell OH-58D Kiowa Warrior armed reconnaissance aircraft.

After the vote, House members left Washington for a month-long recess. That leaves Bell and the Army little time to win the funding back before the fiscal year starts Oct. 1. The House will have to reconcile its version of the defense bill with the Senate’s when Congress reconvenes this month, so ARH proponents may get some help from the other chamber.

House members did back funding the research and development for the ARH.

The ARH recovery plan also calls for slipping delivery of the first production aircraft a year, to 2009. Bell expects to take a $73 million loss on the first two production lots, totaling 62 aircraft. The manufacturer does expect to recovery of costs and make a reasonable profits on the pricing of subsequent production lots.

Under the recovery plan, the army will provide Bell with additional ARH-70 development funding.

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