NORDAM’s Bankruptcy and the aerospace supply chain

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NORDAM files for Chapter 11 bankruptcy

NORDAM nacelle

PWC PW814GA and PW815GA

Gulfstream G500/G600

 

The NORDAM Group, Inc., together with its domestic subsidiaries and affiliates, today announced it has filed a voluntary petition for protection under Chapter 11 reorganization. NORDAM’s foreign subsidiaries and affiliates have not filed for Chapter 11 protection in the United States or in their home jurisdictions.

The action comes following a protracted contract dispute with Pratt & Whitney Canada regarding the PW800 nacelle system used in Gulfstream G500 and G600 aircraft.

NORDAM CEO Meredith Madden stated: “This court filing is not what we wanted to do, but it is what we had to do. It is the best path forward for our company because it allows our business to operate without interruption.”

The filing is supported by additional financing from NORDAM’s bank lenders to help ensure operations continue uninterrupted during the restructuring process.

“We are confident in our company and its future. We will emerge from the Chapter 11 process successfully, as an even stronger company,” Madden said.

“During an eight-year period, we invested in excess of $200 million. The PW800 nacelle system has FAA approval and is operating as expected, having flown more than 6,400 flight-test hours as of July 20 with exceptional performance and quality.”

Madden emphasized today’s court filing in no way affects other NORDAM programs or customers.

“Outside of the contract situation with Pratt & Whitney Canada, our company programs and product lines are performing well, and we are pursuing several new business opportunities,” she said, adding that the company’s focus is on programs with high-growth potential and a strong competitive position in several market niches.

The aerospace supply chain works better than one would forecast as the airframe OEM, the powerplant OEM and multiple suppliers “bet the company” [The Sporty Game] in the creation of a new plane. All risk-bearing participants typically invest hundreds of millions to billions to develop the necessary new technologies. Their bet is that all of the companies will arrive with their part of the venture at the performance design standards, on time and at/below budget; then all of these parts and systems have to be integrated. It is a testament to American aerospace businesses that these deals usually work.

Gulfstream, Nordam and Pratt & Whitney Canada , as far back as 2010, came together to produce the G500/G600, nacelles and the PW814GA and PW815GA, For Nordam that meant an investment of $200m, hiring an additional 300 employees and technology development:

This business-jet size product is also the largest IPPS (integrated powerplant system) and thrust reverser NORDAM has ever built, and we are proud that Pratt & Whitney Canada trusted our technological capability to build a product that will serve two aircraft platforms over an expected period of more than 25 years,” NORDAM CEO Meredith Siegfried said.

After four years in development, we’re delighted to announce this opportunity to support our long-time customer Pratt & Whitney Canada,’ Siegfried added. ‘This integrated powerplant system has the potential to span across other large-cabin, long range business jets – a market that’s proven its economic resilience and has a promising outlook for future growth.  When the program is in full production, we will have added approximately 300 new jobs to Tulsa.’

The suite of revolutionary features that NORDAM brings to these P&WC powerplants is impressive: There is an all-composite asymmetrical pivot door thrust reverser; cowl doors constructed using automated fiber-placement (AFP); a one-piece, composite, double-degree-of-freedom acoustic inlet-barrel liner (a first for NORDAM); and use of AFP “out of autoclave” vacuum-bag cured material. The result is the best aerodynamic and acoustic performance at the lowest possible weight which maximizes fuel efficiency!”

Other than the existence of some contract dispute between Nordam and P&WC, it is not clear what the underlying issues may be. P&W has only added:

In April, Greg Hayes, the chief executive of P&WC parent United Technologies, disclosed to stock market analysts that “some work” was still necessary on the nacelle. But Hayes added that he doesn’t “think there’s any drama there”, and the G500 would enter service with the PW800 engine this summer.

Less than three months later, Nordam’s CEO says the contract issues with P&WC over the PW800 nacelle threatened to “negatively impact” other parts of the company.

‘To that end, we are doing what is necessary to remain financially secure, serve our customers and protect the reputation we have earned over 50 years in the aerospace industry,’ Madden says.”

P&W has a similar problem with its STATE-OR-THE-ART/INNOVATIVE geared turbofan engines and its 1st airframe application on the Airbus A-320 NEO. Rolls-Royce and Boeing are experiencing similar serious problems with the Trent 1000 on the B-787.

 

 

 

 

These examples warrant greater focus on the integration of technologies from a commercial/contractual standpoint and also as to the regulatory certification perspective.



 

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1 Comment on "NORDAM’s Bankruptcy and the aerospace supply chain"

  1. Sandy Murdock | August 1, 2018 at 3:51 pm | Reply

    Spirit and Boeing–https://www.kansas.com/news/business/aviation/article215907535.html

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