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Sunday, November 1, 2009

Eurocopter Donauwörth: Keeping Busy Through Marketing Diversity

Home to more than 5,000 workers, Eurocopter’s plant in Donauwörth, Germany continues to churn out helicopters and support services. A closer look reveals a company seeking ways to reduce the impact of the global economy.

By Richard Whittle

SERVICES/MAINTENANCE

A visitor to Eurocopter Deutsch- land’s Helicopter Technology Park, with about 5,200 workers and engineers the chief employer in this picturesque Bavarian town, hardly senses there’s a world economic crisis underway.

A German Army Tiger attack helicopter, one of Eurocopter Donauwörth’s major products, in flight.

On the east side of the neatly organized factory, in production hangars near the famed Danube river, assembly line workers are building lightweight, twin-engine EC135 and EC145 civilian helicopters, working hard to fill orders Eurocopter booked in 2007 and 2008. On the west side of the facility, in a row of production hangars bordering a grassy park, other workers are fulfilling military contracts: building Tiger attack and NH90 TTH transport helicopters, and performing a wide variety of maintenance, repair, overhaul and modifications on six other helicopter types for the German armed forces, or Bundeswehr.

Elsewhere on the property, another 400 employees are churning out doors for commercial jets built by Airbus, which like Eurocopter Deutschland is a subsidiary of the multinational aviation giant EADS, the European Aeronautic Defence and Space Company. Donauwörth produced its 40,000th Airbus door this year.

The economic picture, however, isn’t as rosy as it seems, acknowledged Ralf Barnscheidt, the senior vice president who heads up the facility’s military work and a member of Eurocopter Deutschland’s board of management.

Barnscheidt told Rotor & Wing that in the first six months of 2009, the Eurocopter Group—which in addition to Eurocopter Deutschland includes units in France, Spain, the United States and elsewhere around the globe—saw its order income drop a whopping 70 percent compared to the same period in 2008.

Production usually lags behind orders 18 to 24 months, so while the assembly lines at Donauwörth have been jammed in 2009 as the facility delivers on orders from previous years, “We are facing now, for the next year, some real problems,” Barnscheidt said.

For at least some of the 5,200 workers at Donauwörth—the 1,000 or so employed by subcontractors rather than Eurocopter—the plunge in orders is going to mean a reduction in work hours, and possibly even layoffs should things get worse, he said. But that’s only on the civilian side of the plant. The good news for many of Donauwörth’s other workers, Barnscheidt said, is that—so far, at least—Eurocopter Deutschland has seen no cutbacks in its military orders due to the global economic crisis.

“I know that some governments are thinking about perhaps stretching programs a bit, this is under discussion,” Barnscheidt said. “But for the time being, on the military side, there’s no real impact.”

Producing military helicopters is a major part of Donauwörth’s business. Besides building Tigers for the Bundeswehr, the factory’s other major military production project is the NH90. (The EC145 is the basis for the U.S. Army’s new UH-72A Lakota utility helicopter, but most of the production work on that is done in Mississippi.)

The NH90 is a twin-engine transport and multi-mission aircraft weighing about 23,000 pounds, designed under NATO supervision for Germany, France, Italy, the Netherlands and Portugal but being built for a host of other nations as well—14 in all. Eurocopter, AgustaWestland and Stork Fokker of the Netherlands, teamed in a partnership called NH Industries, are building the NH90 in two versions: a tactical transport model designed for troop and cargo lifting, casualty evacuation and search and rescue; and a Nato Frigate Helicopter, designed for anti-submarine and anti-surface ship warfare. The NH90’s fly-by-wire controls and 80 percent composite fuselage make it one of the most advanced military helicopters around, and with 530 on order, the companies have plenty of work to do on the project.

A major portion of Donauwörth’s military business, though, is centered in what Eurocopter Deutschland variously calls its “Helicopter Support Center” or “National Support Center.” By whatever name, the center works exclusively—and hand-in-glove—with the Bundeswehr to keep its helicopters flying and up to date. “We modernize, modify and overhaul all German military helicopters except the UH-1, the Huey,” said Gerhard Zembsch, a longtime marketer for Eurocopter Deutschland who often guides visitors around the Donauwörth plant. “National military support is big business for us.”

The Donauwörth support center performs depot-level maintenance on eight types of military helicopters. Shown here are three of the eight helicopters it services. In flight, a Sea Lynx Mk88 (left) and a Sea King Mk 41, both flown by the German Navy. On the deck, a German Army CH-53.
The support center regularly performs depot-level maintenance, repairs and overhauls on eight types of military helicopters for the Bundeswehr. Those include: the Sea King Mk41s and Sea Lynx Mk88s and Mk88As flown by the German Navy; Tigers, NH90s, out-of-production BO105 anti-tank helicopters, and CH-53 transports flown by the German Army; a military version of the EC135 the Bundeswehr uses as a trainer; and three Eurocopter Cougars the German Air Force uses to carry government VIPs.

“We are the so-called ‘weapons systems responsible company’ for them,” noted Barnscheidt. “This means that we have all the technical capability we need to service these aircraft.”

A purer example of the military-industrial complex would be hard to find. A civilian Eurocopter Deutschland program manager runs the support center, established a few years ago under Barnscheidt’s supervision, but the deputy program manager is a Bundeswehr lieutenant colonel. The center’s workforce of 800 also includes 40 Bundeswehr mechanics and 60 Bundeswehr engineers, and while they answer directly to their lieutenant colonel, “If our guy is not there, he (the lieutenant colonel) is the boss” of the entire operation, Barnscheidt said.

The support center also leans forward. Defense contractors often market ideas for changes to military products to their armed service customers but wait for a contract to actually develop new systems or equipment. The support center prefers to offer the Bundeswehr solutions for problems rather than wait for the military to come to them, Barnscheidt said. It also develops those solutions on Eurocopter’s money.

A major portion of Eurocopter Donauwörth’s work is building the NH90, a modern twin-engine transport and multi-mission helicopter designed under NATO supervision for Germany, France, Italy, the Netherlands and Portugal but being built for 14 nations in all. Military work, from new production to MRO and modifications, is still going strong at Donauwörth.
“We normally offer a free-of-charge demonstrator,” he said. “They can see what we are offering. They can test it. Sometimes we have to modify it a bit because we didn’t get 100 percent of the needs.”

For example, a couple of years ago, support center personnel heard that German CH-53 helicopter crews carrying troops and supplies in Afghanistan were having trouble communicating by radio because of the country’s mountainous topography. The German Army began flying its CH-53s in that rugged country in 2003, when Germany sent troops there as part of the NATO-led International Security Assistance Force. Donauwörth has long done MRO and upgrade work on the Bundeswehr’s CH-53s.

“We get a lot of information from the troops coming back from Afghanistan,” Barnscheidt said. When soldiers told them about the radio problem, Barnscheidt’s staff studied possible solutions on their own and decided a satellite communications system was what the CH-53 needed. They scoured the market and found one, developed a demonstrator system on Eurocopter’s dime, and gave it to the Bundeswehr for testing. A contract followed, and many of the German Army’s CH-53s now are getting secure voice and data satellite links that will let them communicate with ground forces on the other side of a mountain in Afghanistan—or with Bundeswehr headquarters in Berlin, if need be.

As the case of the CH-53 demonstrates, the support center doesn’t only look for improvements it can offer for Eurocopter products the Bundeswehr flies. Germany’s 53s were built beginning in 1978 by the former Messerschmitt-Bölkow-Blohm, long since absorbed into EADS after various earlier corporate transformations.

“We try to find synergy,” Barnscheidt said, by considering whether new systems developed for one type of Bundeswehr helicopter might also work in another, no matter who built the aircraft.

Eurocopter’s Helicopter Technology Park, situated next to the famed Danube River, is the largest employer in the picturesque Bavarian town of Donauwörth.
The Army’s CH-53s offer a prime example of that practice as well. Donauwörth has a major contract to refurbish, modify and upgrade 40 of the 82 that exist, most of which are about 35 years old and have flown more than 6,000 hours. The aircraft, built with dial and gauge cockpits, are getting new night vision goggle (NVG)-compatible “glass cockpits” with five new multifunction displays and two central display units—equipment developed for the NH90. The 53s also are getting a new four-axis autopilot developed by Eurocopter France for the EC725 Caracal, the latest version of the Cougar. The mods also include new internal fuel tanks and an electronic warfare kit.

The National Support Center also looks for synergy in timing its work. Besides the “midlife upgrade” being done on the 40 CH-53s, the facility also has three other major CH-53 modification contracts from the Bundeswehr. Under one program, announced at this year’s Paris Air Show, Donauwörth is to retrofit 20 CH-53GSs—a special operations version—and six CH-53GEs with sensors, broadband radio and a FLIR (forward-looking infrared) system to locate and recover personnel.

Under another deal, 14 other Bundeswehr CH-53s are getting new IFR navigation systems. Under yet another, Donauwörth is refurbishing the entire Bundeswehr CH-53 fleet by inspecting the airframes for cracks and fatigue and replacing the tail booms and wiring. The factory coordinates all this modification work on the CH-53s to coincide with their arrival in Donauwörth for routine maintenance every 300 flight hours.

Walking along a row of 19 of them, including a couple still sand-scarred from Afghanistan, Stefan Emig, senior manager for army helicopters in the support center, said timing the work this way is a bit tricky, given the Bundeswehr’s need for the aircraft. Anywhere from 15 to 19 Bundeswehr CH-53s are in the hangar at Donauwörth at any given time, and they stay an average of eight to 10 months, Emig said.

“It must go hand-in-hand with the customer to bring in one helicopter and take out one helicopter,” Emig said. But “the real value for the customer is that we combine the upgrade programs with the MRO, so he gets back a helicopter that is equipped with new things.”

The Bundeswehr will be relying on that for years to come, for while its CH-53s are well up in years, and the brutal high and hot conditions of Afghanistan are adding a lot of rough flying hours to many of them, it will be a while yet before a replacement comes along. The European Defence Agency has assigned Eurocopter to develop a new heavy-lift helicopter in the massive 32-ton range, with design to begin in 2011, but the project has moved slowly.

Lutz Bertling, CEO of Eurocopter, said this year that the company had begun pre-design studies and was leaning toward forming a “trans-Atlantic partnership”—that is, teaming with an American company—to build the so-called Future Transport Helicopter. There was talk a while back that Germany and France, the nations that started the FTH two years ago, might opt for something like the CH-53K, which Sikorsky is building for the U.S. Marine Corps. At a March meeting of the European Defence Agency, however, Bertling showed a slide depicting a notion of the FTH that looked remarkably like a tandem-rotor Boeing CH-47 Chinook. Nothing has been decided yet, however, and in any event, the first FTHs are unlikely to be ready for service before 2020 at the earliest.

Until then, and even with a weak economy, it appears there will be plenty of work to do at Donauwörth keeping not only the Bundeswehr’s CH-53s but almost all its other helicopters flying. “This is the speciality of the National Support Center,” beamed Barnscheidt. “We are really working within Eurocopter only for the German customer, independent of which kind of helicopter he is operating.”

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