Textron's Bell Helicopter Granted Approval for Full Rate Production of V-22 Osprey Tiltrotor
Company Brings Entirely New Category of Aircraft to Aviation Industry
Textron Press Release
Providence, RI & Fort Worth, TX - September 28, 2005 - Marking a major milestone in aviation, Textron Inc. (NYSE: TXT) today announced that its Bell Helicopter unit has been granted approval by the United States Defense Department for Full Rate Production (FRP) of the Bell Boeing V-22 Osprey tiltrotor aircraft. Current plans include the delivery of 360 aircraft to the U.S. Marine Corps (USMC), 50 for the U.S. Air Force and 48 for the U.S. Navy. The total program is worth in excess of $19 billion to Bell and Textron through 2018.
With FRP, the U.S. Government has authorized Bell and Boeing (NYSE: BA) to increase current low-rate production of 11 aircraft per year up to 48. Today's FRP decision by the Defense Acquisition Board (DAB) follows the successful completion of extensive Operational Evaluation testing, conducted last summer by the USMC.
This revolutionary tiltrotor technology combines fixed-wing airplane and vertical lift capabilities into one efficient and extremely capable aircraft that can take off and land like a helicopter and fly like an airplane, providing military customers with significant improvements in combat capabilities - including speeds and range two to three times more than that of conventional helicopters, as well as increased payloads, survivability and reliability.
"The V-22 Osprey is an unprecedented feat in aviation and an excellent example of how our investments in innovation are fueling organic growth for Textron," said Lewis B. Campbell, Chairman, President and Chief Executive Officer of Textron. "Bell's tiltrotor technology is enabling new capabilities and more operational flexibility for our military customers never before thought possible and will undoubtedly take 21st Century flight to a new dimension. So much so that the Federal Aviation Administration (FAA) is creating an entirely new class of aircraft specifically for the tiltrotor."
"Now that we are authorized for full rate production, U.S. Forces will soon have the most versatile aircraft in the world - which will provide a tremendous advantage in the face of ever-changing future combat challenges around the globe," said Michael A. Redenbaugh, Chief Executive Officer of Bell Helicopter. "Not only is this a pivotal moment for Bell and the literally thousands of employees who helped bring the V-22 to life, but today we mark a truly game-changing advancement in the aviation industry. With this decision, tiltrotor technology has come to life in a big way."
"In addition, today's FRP decision provides us with an opportunity to deliver on our customer commitment to produce the aircraft in the most efficient, cost-effective way possible, ultimately bringing costs down," added Redenbaugh. "And while there's a lot of work to be done, we have the talent, resources and infrastructure in place to achieve this goal." Redenbaugh also noted that Bell expects to reach in excess of $1.5 billion in annual V-22 revenue in 2012 when the program reaches planned capacity of 48 aircraft per year.
The initial Ospreys, called "MV-22s" will be delivered to the USMC for use in combat assault. Each Osprey can carry 24 Marines with full combat gear. The Air Force version of the tiltrotor, called the "CV-22," is a Special Operations aircraft designed for the long range insertion and removal of special teams. Other mission critical capabilities for the V-22 include combat search-and-rescue, aerial refueling and anti-submarine warfare.
With potential future foreign and domestic military sales and the possibilities for next generation tiltrotor development -- tiltrotor technology continues to be an important growth area for the company. Earlier this month the Bell Boeing team was awarded a research contract by the U.S. Army to perform conceptual design and analysis of its next generation tiltrotor technology called the "Quad Tiltrotor" aircraft for the Army's Joint Heavy Lift program.
Tiltrotor technology is also expected to play a significant role in commercial applications such as emergency disaster relief and emergency medical evacuation, regional passenger/cargo transport, search-and-rescue, offshore oil field support and anti-drug efforts, via the company's development of a civil tiltrotor aircraft, which is currently undergoing flight-testing.
Bell Helicopter, a subsidiary of Textron Inc., is a leading provider of commercial and military helicopters and the pioneer of the revolutionary tiltrotor aircraft. Globally recognized for customer service, innovation and superior quality, Bell's global workforce of more than 7,500 employees serves customers flying Bell aircraft in over 120 countries.
Textron Inc. is a $10 billion multi-industry company with more than 44,000 employees in 40 countries. The company leverages its global network of aircraft, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft, Jacobsen, Kautex, Lycoming, E-Z-GO and Greenlee, among others. More information is available at www.textron.com.
Forward-looking Information: Certain statements in this report and other oral and written statements made by Textron from time to time are forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters; or project revenues, income, returns or other financial measures. These forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the following: [a] the extent to which Textron is able to achieve savings from its restructuring plans; [b] uncertainty in estimating the amount and timing of restructuring charges and related costs; [c] changes in worldwide economic and political conditions that impact interest and foreign exchange rates; [d] the occurrence of work stoppages and strikes at key facilities of Textron or Textron's customers or suppliers; [e] Textron's ability to perform as anticipated and to control costs under contracts with the U.S. Government; [f] the U.S. Government's ability to unilaterally modify or terminate its contracts with Textron for the Government's convenience or for Textron's failure to perform, to change applicable procurement and accounting policies, and, under certain circumstances, to suspend or debar Textron as a contractor eligible to receive future contract awards; [g] changes in national or international funding priorities and government policies on the export and import of military and commercial products; [h] the adequacy of cost estimates for various customer care programs including servicing warranties; [i] the ability to control costs and successful implementation of various cost reduction programs; [j] the timing of certifications of new aircraft products; [k] the occurrence of slowdowns or downturns in customer markets in which Textron products are sold or supplied or where Textron Financial offers financing; [l] changes in aircraft delivery schedules or cancellation of orders; [m] the impact of changes in tax legislation; [n] the extent to which Textron is able to pass raw material price increases through to customers or offset such price increases by reducing other costs; [o] Textron's ability to offset, through cost reductions, pricing pressure brought by original equipment manufacturer customers; [p] Textron's ability to realize full value of receivables and investments in securities; [q] the availability and cost of insurance; [r] increases in pension expenses related to lower than expected asset performance or changes in discount rates; [s] Textron Financial's ability to maintain portfolio credit quality; [t] Textron Financial's access to debt financing at competitive rates; [u] uncertainty in estimating contingent liabilities and establishing reserves to address such contingencies; [v] performance of acquisitions; and [w] the efficacy of research and development investments to develop new products.
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