What goes around
Production ramps up at Robinson Helicopter
Kurt Robinson didn’t intend to set off a minor media frenzy when he let slip some good news about business recently.
But after he laid out his view that things were looking up at Robinson Helicopter, validating the company’s strategic decision about product development and allowing the company to hire about 200 new workers, the phone hasn’t stopped ringing with media inquiries.
“We’re sitting here kind of puzzled,” he said in an interview.
Perhaps everyone is just a bit starved for good news about the economy these days.
What generated the excitement was Robinson’s disclosure that since October 2010, when there were about 100 back orders for the company’s newly certified R66 turbine-powered helicopter, deliveries have begun, demand has strengthened, and production has been stepped up. Now the goal at Robinson is to increase manufacturing from two Rolls-Royce RR300-powered R66s a week to three, and hit a target of 100 ships for the year, Robinson said.
“Next year we hope to start the year at four (per week) at the beginning, and move to five,” he said, adding that Robinson has orders to support that production goal.
About 65 to 70 percent of new sales are for the export market, Robinson said. Demand first showed up in Australia and Brazil, and soon spread to European countries, and especially Russia, where the craft was recently certified.
Production of the Lycoming-powered piston R44 series is also up: With upward of 180 R44s expected to be completed this year, the company projects manufacturing about 300 total aircraft in 2011, about double the previous year’s total production.
What’s going on to explain the change from slow to surge?
Robinson said the company believes that the difficulty buyers had obtaining financing held back sales. Now, pent-up demand is being released “as that starts to thaw and banks start lending again.”
Also, the $805,000 R66 fills a pricing niche that makes it attractive to buyers by bridging the gap between the approximately $400,000 R44 models and single-engine turbine helicopters priced in the $1.4 million range.
“It confirms our whole premise back in ‘04 and ‘05 to make the decision to go ahead and design and produce the R66,” he said. Now the R66 “is obviously finding a market very quickly.”
The company president predicted that sales will continue to climb when buyers “work it on jobs and make money with it.”
When news inquiries started coming in about the unusually upbeat reports out of the Torrance, Calif., aircraft manufacturer, Robinson estimated that the company had hired about 150 new employees across multiple types of jobs.
“I went down to personnel and said, ‘Give me the actual number.”
It turned out to be closer to 200.
Robinson did not want to make any macroeconomic pronouncements about the meaning of the sales growth or speculate on why credit seemed to be loosening for his global customers.
However, he reiterated his view that it was worldwide phenomenon driving his production higher.
“We’re certainly feeling more positive coming into next year,” he said.
November 1, 2011