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Photo: HAI/Mark Bennett

Bankruptcy behind it, MD Helicopters is determined to put customers first.

When it comes to rotary-wing testimonials, few can best that of MD Helicopters, whose aircraft have been called the “Ferraris of helicopters.” Pilots who fly MDs say “it feels like you wear this aircraft.”

Customer feedback like this has fostered a sometimes cultlike following for the brand. But as the company itself will attest, reclaiming the OEM’s position as a trusted service provider following its emergence from bankruptcy in August 2022 won’t happen overnight.

The company did power-boost itself toward that goal, however, with a substantial mid-2022 leadership overhaul, installing new president and CEO Brad Pedersen, new VP of Aftermarket Sales and Support Ryan Weeks, and other critical leaders in areas such as sales, finance, marketing, and customer support.

Now, one year later, this leadership group, in partnership with more than 300 MD employees, has accomplished much—but has much left still to do.

Deep Roots, High Achievements

MD’s heritage can be traced to 1932, when Howard Hughes established Hughes Aircraft Co., which was part of the Hughes group of companies for five decades, until its 1984 purchase by McDonnell Douglas. A merger with Boeing followed in 1997, followed by several additional ownership changes before the company evolved into the MD Helicopters of today.

Along the way, the company developed the OH-6 Cayuse, a single-engine light helicopter produced for the US Army. With a distinctive teardrop design that provided excellent visibility and a four-bladed rotor system prized by pilots for its agility, the OH-6 set world records for speed, endurance, and time to climb. Its civil variant, the Hughes 500, is the basis for today’s MD 500 series of aircraft, which over the decades has developed a host of steadfast users.

One loyal MD customer is the Huntington Beach (California) Police Department. “We were the fifth helicopter agency established in the US and have literally grown up with MD,” says Jerry Goodspeed, a sergeant in the department’s Air Support Unit. “We were one of the first to receive a NOTAR [aircraft] in 1998, and we purchased a total of five before launching our search for replacements in 2021. We found that an MD—the 530F this time—was still the perfect platform for our mission.

“We fly at 800 to 1,500 ft., and sometimes up to 3,000 ft. at night to limit the sound, usually doing rotations over a target,” Goodspeed continues. “The MD keeps us agile in our airspace and gives our tactical flight officer strong visibility so that he can accurately update teams on the ground.”

A New Era

When Pedersen took the helm of MD Helicopters last year, he brought more than 35 years of aviation experience, from test pilot to C-suite, and a track record of rescuing struggling organizations. Pedersen worked at Hughes Helicopters in 1983 and lived through the McDonnell Douglas acquisition and the Boeing merger.

“When I heard MD went into bankruptcy, I wanted back in,” Pedersen says. “I love this product—its performance, its quality, its technology, its style. The day I got the offer to return was one of the best days of my life. Now I’m laser focused on getting MD back on its feet.”

Step one, Pedersen shares, was surrounding himself with smart people who had a common vision and then getting out of their way so they could apply their expertise, enhancing the efforts that are earning the company success and making changes where they’re needed.

“We are a team with expanded industry intel, and we call on each other’s expertise daily,” says Pedersen. “We’re not emotional. We’re not angry. We’re not looking to the past. We listen, we identify challenges, we seek out opportunities, and we pursue those opportunities step-by-step. It’s not magic. It’s commitment applied daily.”

Another cornerstone of Pedersen’s management style: communication.

“Most people come to work and want to do a good job,” he says. “By keeping our employees informed about where we’re going, why we’re going there, and how we plan to get there, we empower them with information that helps them to achieve their best.”

Parts of the Whole

One thing that quickly became clear to Pedersen was how poorly MD was supporting customers in the field. “If we can’t support our helicopters, nobody will buy them,” Pedersen says. “If our customers aren’t flying, they’re not making money, completing missions, serving communities. Comprehensive service and support are required for us to run on all cylinders.”

He immediately made support priority one, hiring Weeks to reestablish and maintain long-term stability on the service-and-support side of the organization.

“In the past, customers have had a hard time getting spare parts from us, or even getting in touch with us to find out if we have a particular part and what that part’s price is,” says Weeks. “We’re not going to solve all of those problems overnight, but our improvements are moving ahead based on annual timelines, and they’re aggressive.”

According to Weeks, MD has just over 1,700 aircraft located around the world: about 40% in North America and 40% in the Asia-Pacific region. It also has about 30,000 unique part numbers. In a single year, MD sells around 3,000 of those parts, with 700 of those ordered 80% of the time.

Weeks and his team began by focusing on the 700 parts identified as key. In less than a year, the company has determined how many of these parts it needs annually and has placed orders to ensure adequate inventory.

By the end of this year, Weeks expects to be “healthy” on approximately 80% of MD’s most common part numbers, meaning that there will be enough parts on the shelf to handle the orders that come in.

The Huntington Beach Police Department is already seeing the improvements. “When we were considering switching helicopter brands, MD service wasn’t at its best, but its leadership was changing,” says Goodspeed. “Now, even when we have issues with a part, we have it in hand within several days. And MD wants to be faster. They take it personally.”

MD also has a five-year demand plan in play and has shared that plan with its supply chain as it works to reestablish relationships and place orders for broader future need. According to Weeks, some of those orders are already coming in, even with lingering pandemic challenges such as a lack of raw materials, labor shortages, and high price points.

“It’s going to take blocking and tackling to fully recover from the pandemic and have all of our parts—and their pricing—available at a moment’s notice,” says Weeks. “That’s the long game, but we’ll get there, with a 24/7 network portal that reflects our understanding that time is money.”

Additional improvements are rolling out for exchange parts and expanded repairs. Weeks’s goal is to have exchange parts one dozen deep on the shelf. “When I joined MD, we didn’t have this, but we hope to be in a healthy position on our rotating inventory by the end of the year,” he says.

MD has also adopted more strategic practices for expanded repairs. “In the past, MD would often replace slightly worn parts on customer aircraft with new parts. But that consumes new-parts inventory,” says Weeks. “Now, we’re working with partners to develop expanded repairs, and our overall process, our parts inventory, and our profitability are all trending up because of it.”

Taking It to the Field

The MD service network has 40 members: 35 Authorized Service Centers (ASCs) located across the globe and 5 supporting parts retailers. The ASCs employ mechanics who are trained on MD aircraft and use MD parts, while its parts retailers sell MD parts to customers who aren’t near an ASC.

Pedersen and Weeks agree there aren’t enough ASCs, and they’re working to change that. One example: There are currently 106 MD helicopters in New Zealand, but until this year, the country had only one ASC—on the North Island. New Zealand now has a service center on the South Island, as well, maintaining aircraft for a community that’s been flying MDs since the 1970s.

“We’re looking at the premier service centers that haven’t joined our network. We’re sharing our vision with them and working to bring them into the MD family,” says Weeks. “We want them to benefit from things that will put more profit in their pocket, like our training resources and parts price discounts.”

The MD team is now determining where other ASCs are needed to align with MD helicopter populations. According to Weeks, several new centers are near signing. Another goal: using ASCs to install upgrades in the field to alleviate the need for customers to send aircraft back to MD’s Mesa, Arizona, headquarters, a move the company hopes will keep its fleet modern and its aircraft relevant.

As a reflection of the OEM’s new straight-talking style, the company has launched a “World Apology Tour.” An MD 500 fly-in featuring 63 aircraft was held in New Zealand in February. The company looks forward to holding additional fly-ins in the future.

“That has brought real moments of clarification,” says Weeks. “When we went to New Zealand, someone told me it was the first time they’d seen an MD face in 10 years. I was glad to be that face. To show them that we’re not just talking; we’re doing.”

Planning for MD’s Future

Collectively, the MD team is determined to move the needle. Within a year, they expect to announce new products in the pipeline. Within 5 years, they want to have the best customer service in the industry. Within 10, they want to be a significant player in the light-single market forecast.

“We’re glad we’re able to continue to fly an aircraft we love,” says Goodspeed. “Staying with MDs also meant we didn’t have to retool or retrain. That, combined with MD’s overall affordability, saved us about 20% over switching to a new helicopter company. That allowed us to purchase three new MDs instead of only two aircraft from another helicopter brand.”

Comments like this remind Weeks of all the customers who are rooting for MD to stick around. “We’re careful not to work an inch deep and a mile wide,” he says. “We identify our top priorities, and we progress week by week so that we’re somewhere new at the end of the year.”

“MD has had many iterations—some great, some not so great,” says Pedersen. “But our product is strong. It will outlive me. It’s an honor for all of us to be entrusted with the future of this company.”