Bell Helicopter Textron Inc.

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Bell Helicopter Textron Inc.

P.O. Box 482
Fort Worth, Texas 76101
U.S.A.
Telephone: (817) 280-2011
Fax: (817) 280-2321
Web site: http://www.bellhelicopter.com/

Wholly-Owned Subsidiary of Textron Inc.
Incorporated: 1957 as Bell Helicopter Corporation
Employees: 8,600
Sales: $1.5 billion (2001 est.)
NAIC: 336411 Aircraft Manufacturing; 54171 Research and Development in the Physical, Engineering, and Life Sciences

Bell Helicopter Textron Inc. is the largest maker of helicopters in the world, and the company has been one the industry’s most significant pioneers. A vintage Bell Model 47 helicopter is even part of the permanent collection of the Museum of Modern Art in New York City. In its first half century of business, Bell produced 34,000 helicopters. Its whirlybirds are active in 124 countries.

Origins

The helicopter has existed in human imagination at least since Leonardo da Vinci conceived his helical air screw. However, a practical model would not be produced for another five hundred years. American inventor Arthur Young is credited with building one of the first viable helicopters in the early 1930s.

Although closely identified with helicopters, Bell’s history goes back to the Buffalo, New York-based Bell Aircraft Corporation, which by the 1940s was producing revolutionary fixed-wing aircraft for the U.S. military. These designs included the P-39 Airacobra, a ground attack aircraft, and America’s first jet plane, the P-59 Airacomet.

After years of experimentation with scale models, Arthur Young showed Lawrence D. “Larry” Bell, Bell Aircraft’s founder, a home movie of his research in September 1941. Bell was taken with Young’s helicopter design and established a small shop in Gardenville, New York (a former Chrysler auto dealership vacated in wartime) to accommodate its production. By June 1945, this operation had been incorporated into the main Bell Aircraft plant, which had moved to nearby Niagara Falls Airport.

The first prototype was called the Bell Model 30, a one-seat, 165-horsepower helicopter capable of reaching 100 m.p.h. in level flight. The first example was christened Genevieve on December 18,1942. Within a year, the dramatic rescue of a Bell pilot, who had crashed testing one of the company’s new jets over snowbound upstate New York, had already generated national publicity for the program. The first production model was called the Bell Model 47B, which began deliveries to the U.S. Army in 1946.

The Model 47 was praised for its simple, elegant design, and ultimately landed a spot in the permanent collection of the Museum of Modern Art in New York City. The craft was durable, too: hundreds of Model 47s remained in service fifty years after their introduction.

However, after the war, helicopters proved a hard sell. Bell Aircraft’s total sales volume fell from $317 million in 1944 to $11 million in 1946. Despite pioneering America’s first jet aircraft, the country’s air forces did not pick it as a manufacturer after the war (though the company did eventually win contracts to supply Boeing and Convair).

A personal helicopter market also failed to materialize, and even selling its two-seat Model 47B at $25,000 each (three times the price of a four-seat airplane), the company was losing money on them. The price was raised to $39,500 each in late 1948, yet soon reduced to $23,500 in the face of competition from the Hiller 360 helicopter.

Though originally intended for the commercial market, the first Bell helicopters produced would go to the military. Most of the helicopters produced in the 1940s went to the agricultural market, where they excelled in crop dusting applications.

In the late 1940s, Bell created subsidiaries to market helicopters and operate them in oil exploration duties. In spite of a nineteen-week strike by the UAW (United Auto Workers), in 1949 Bell Aircraft posted its first profitable year since the end of the war, earning $204,000 on sales of $11.8 million. Employment more than doubled during the year, to 4,000 workers. More than 11,000 were employed by the end of 1951, spurred by the outbreak of the Korean War. Bell’s sales reached $147 million in 1953.

The success of the rotary-wing aircraft had justified the creation in January 1951 of a separate helicopter division, headquartered in Fort Worth, Texas. In March, this division moved to facilities in Kenmore, New York, originally built for Curtiss Airplane Company.

Helicopter Division sales reached $48 million in 1955. By the time of Larry Bell’s death in 1956, the company had developed a number of innovative rotorcraft variants, including the XH-13F turbine helicopter and the XV-3 Convertiplane, which pioneered the tilt-rotor concept that would later be used in the V-22 Osprey. In 1957, the Bell Helicopter Corporation was established as a wholly owned subsidiary of Bell Aircraft. It was acquired in July 1960 by Textron Inc., along with other Bell Aircraft units, for $22 million. Their former parent company, Bell Aircraft, then changed its name to Bell Intercontinental Corporation, while the Bell Helicopter Corporation was renamed the Bell Helicopter Company. At this time, Edwin Ducayet succeeded Harvey Gay-lord as Bell Helicopter’s president.

Choppers Over Korea and Vietnam

Helicopters were first used extensively on the battlefield during the Korean War, where they excelled at evacuating wounded soldiers. A dedicated medical evacuation helicopter was commissioned by the U.S. Army in 1955, resulting in the MU-1 Iroquois, more popularly known as “Hueys.” This chopper, much larger than the Model 47, would be armed and used for attack as well as rescue and medevac duties in Vietnam. A larger and more powerful version, the Model 205 or UH-1D, was ordered in 1960 and entered production in August 1963. It could carry 12 troops and six stretchers, approximately 4,000 pounds in total cargo.

In 1960, Bell lost an Army contract for a light observation helicopter (LOH) to Hughes, a newcomer to the industry. Bell incorporated its research for this bid into the commercial Model 206A JetRanger helicopter, which would dominate the market for light turbine helicopters into the 1990s. A military version of this, the OH-58A Kiowa, won the Army’s LOH contract when Hughes raised the unit price for its second batch of choppers. Deliveries of the OH-58A began in May 1969, though the commercial variant did not enter production until 1977.

Bell developed other military helicopters during the 1960s. The UH-1G Cobra attack helicopter, armed with a 7.62mm minigun in a chin turret and rocket mounts on stub wings, began production in October 1966. The UH-1 spawned more powerful variants such as the Model 214 KingCobra. Iran acquired the first KingCobra in 1975. Bell continued to develop this program after the US withdrew from the country a few years later.

Bell Helicopter’s sales increased phenomenally during U.S. military action in Vietnam, when production totaled 14,000 helicopters. The company had revenues of $150 million in 1962, $60 million of it civil. In 1967, Bell’s revenues were more than $2 billion, with civil sales accounting for just $385 million.

After peaking at $1.81 billion in 1970, Bell’s military sales fell to just $300 a million a year by 1975. Still, its transition to peacetime was much less shocking than that of rival Sikorsky and Boeing Vertol, both of which required substantial bailouts from their corporate parents, notes Whirlybirds author Jay Spenser. Jim Atkins, appointed Bell Helicopter president in 1972, directed the company’s postwar diversification.

The government of Iran’s record $500 million order for 490 civil and military helicopters, announced in December 1972, helped keep Bell’s order books full. (However, this success may have encouraged the U.S. Army to prop up other helicopter manufacturers: Hughes would win the bid to replace the Super-Cobra with its AH-64 Apache, and Sikorsky’s Blackhawk became the military’s replacement for the venerable Huey.) Unfortunately, this contract, which included plans for a co-production venture in Iran, were scuttled by that country’s civil unrest within a few years. Further, it later emerged that the commander of the Iranian air force held an interest in a company that received a $3 million commission in the deal.

By 1976, Bell Helicopter had become Textron’s largest division. In 1982 the name was changed to Bell Helicopter Textron Inc. (BHT). The next year, Bell Helicopter Textron Canada was formed. Its plant at Mirabel, Quebec, opened in 1985. The Canadian unit would build all of Bell’s commercial helicopters, with rotors and transmissions supplied by the Fort Worth plant.

Teaming Up in the 1980s

Bell partnered with Boeing to win a Navy contract to design a Joint Services Advanced Vertical Lift (JVX) aircraft in 1983. Based largely on Boeing research, this program would develop into the V-22 Osprey tiltrotor, an aircraft whose rotors could point either up or forward to fly as an airplane or hover as a helicopter. The hybrid helicopter/planes boasted twice the speed and range capability of a traditional helicopter, but could land in much smaller areas than fixed-wing aircraft. Later in the decade, Bell teamed with McDonnell Douglas to bid on an Army light helicopter contract, which it lost to a Boeing/Sikorsky team in 1991.

Company Perspectives:

As the world’s pre-eminent provider of vertical take-off and landing aircraft, Bell Helicopter Textron is committed to provide every customer with products and services of the highest quality. Our Strategy is to win and keep customers by producing the most reliable helicopters in the world and by being the most responsive company in the industry to our customers’ needs. We will aggressively improve our cost competitiveness and provide our customers the best value in our products of today and our products of tomorrow.

Leonard M. “Jack” Horner, son of H.M. “Jack” Horner, the former head of Sikorsky parent United Technologies Corporation, became Bell Helicopter’s fourth president in 1984. At the time, Bell Helicopter had 7,200 employees and was posting operating income of $30 million a year.

In March 1985, Textron announced it was putting the company up for sale in order to raise $500 million to offset the cost of its recent purchase of major military supplier Avco Corporation. However, this sale was canceled four months later after the US Army announced it was investigating the company for “accounting deficiencies.” Bell ultimately agreed to refund the government $90 million to settle an impending fraud case alleging the company over-billed for spare parts.

Controversy also followed the V-22 Osprey program, which suffered crashes and cost overruns. By late 1992, noted the New York Times, the program had cost $3.6 billion, and another $1.5 billion had been released to the program—more than double the V-22’s original $2.4 billion estimate. Estimates for a proposed production run of 612 Ospeys over ten years exceeded $22 million. Half of the parts for the Boeing and Bell’s V-22 were subcontracted to 2,000 other companies.

The Clinton administration supported the V-22 as both a means to transport small army units rapidly to remote battlefields and, in the civil arena, a way to help relieve congestion at the nation’s crowded airports. Critics doubted the plane’s high fuel and maintenance costs would make it viable for commercial passengers.

The Model 407, a replacement for the fantastically successful Model 206 JetRanger, was introduced in 1995. Commercial sales were particularly strong in South America, where Bell doubled its business in the mid-1990s, stealing market share from rival Eurocopter.

Terry Stinson, a member of the Stinson family of aviation pioneers, became Bell Helicopter’s president and CEO in 1997. The next year, Bell bought three of Boeing Helicopter’s commercial helicopter lines. Boeing had only been selling 30 commercial helicopters a year; just over a tenth of the number Bell was selling. Nevertheless, the deal gave Bell the broadest product line in the market. On the high end of the range, Bell Helicopter was taking orders for a civilian version of the V-22 known as the 609, with a base price of $8 million each. One of the company’s smaller turbine helicopters, the 206, sold for just $750,000.

New Markets for the New Millennium

Bell revived a joint venture project that had been shelved in favor of the V-22 program. This joint venture, with the Italian firm Agusta S.p.A., which manufactured some Bell choppers under license, developed a larger commercial helicopter called the AB 139 that was scheduled to be available for sale in 2002 at a price of between $6 million and $7 million. Bell had exited the market for large helicopters in 1990, when it stopped building its Model 214ST. Agusta had also been chosen as a partner in the commercial version of the V-22 tiltrotor called the Bell/Agusta 609.

One important export market for Bell’s military helicopters was Turkey, which used them to fight Kurdistan Workers’ Party (PKK) terrorists in the country’s southeastern region. In 2000, Bell beat out Italy’s Agusta and a joint venture between Russia’s Kamov and Israeli Aircraft Industries to tentatively win a $4.5 billion order for 145 attack helicopters. The winning model, the AH-1Z King Cobra, was an upgrade of the Super Cobra the company had sold to Turkey in the early 1990s.

A V-22 crashed in April 2000, killing all 19 Marines aboard a training flight. The resulting investigation placed most of the blame on human error. A second fatal accident in North Carolina followed in December, after which the Marines grounded their fleet. A Marine Corps investigation blamed this on a combination of a failed hydraulic line and a software glitch.

Bell opened a new $40 million V-22 Osprey plant in Amarillo, Texas, in November 2000. The town had offered millions in incentives to lure the plant, which was supported by the state’s congressmen. The new plant was not unionized, unlike Bell’s other plants in Fort Worth, Arlington, and Grand Prairie. Bell also devoted about a third of its 6,300 Texas workers to making parts for the tiltrotor aircraft.

By the middle of 2001, Bell had received a handful of orders for its civil Model 609 tiltrotor aircraft—though no prototype had yet been built—and remained optimistic about prospects for the V-22, of which 14 had been delivered. Tiltrotors accounted for $432 million of Bell’s 2000 revenues. “We’re going to change the way people fly,” was the catchphrase of new Bell Helicopter president John Murphey. Indeed, under development was an even larger version of the V-22 known as the Quad Tiltrotor, designed to carry six times the payload of the Osprey.

Principal Subsidiaries

Bell/Augusta Aerospace (75%).

Key Dates:

1941:: Bell Aircraft backs Arthur Young’s pioneering helicopter research.
1946:: The Bell Model 47 helicopter enters production.
1951:: A separate division is created for helicopters.
1953:: Helicopters push Bell’s annual sales to $147 million during Korean War.
1957:: Bell Helicopter Corporation established.
1960:: Textron buys Bell Helicopter.
1967:: Annual revenues reach $2 billion during Vietnam War.
1983:: Canadian unit formed to focus on civil helicopters.
1992:: Controversial Bell/Boeing V-22 tiltrotor project proceeds.
2000:: A new plant in Amarillo, Tx. opens, dedicated to tiltrotor production.