Fort Worth-based Bell Helicopter broke ground on its new headquarters Monday. Bell is banking on new facilities to help it compete in an increasingly tough, global market place. It could get even tougher. KERA’s Bill Zeeble reports defense cuts could run into the billions beginning next year.
Unless Congress acts, Federal defense dollars might be slashed more than 55 billion dollars after the new year. National and state leaders express confidence the cuts won’t happen, but Bell says it’s doing well for now, and with its new facilities, can diversify its money-making options. Fort Worth Mayor Betsy Price is happy Bell will keep calling Fort Worth home. “We need responsible growth, great job creation and economic opportunity and what you’re providing here today offers that to all of us.” Price said.
Bell CEO John Garrison says the company - with its 7,000 local employees -is not only staying in Fort Worth, with a new headquarters, but it’s also adding other buildings, like a flight and training facility. Garrison says the total investment will exceed a billion dollars. He’s looking long term. "We need to offset the downturn in military spending with commercial growth. 78 percent of our sales this year are international on the commercial side. So we’ve made the investment on the military side, commercial side, our after-market service and support. And that’s helped us get through these difficult economic times," said Garrison.
Garrison says the new buildings will help Bell compete for the best and the brightest. Defense industry analyst Richard Aboulafia, with the Teal Group, says Bell needs to make that play, because overseas competitors like AgustaWestland and Eurocopter want the same people. “If you’re looking for talent in this day and age you have to build in an area that is a desirable area for talent. If not the Silicon Valley, then some place that’s reasonably attractive to smart, educated people. because the other guys are offering homes in the South of France or Northern Italy,” Aboulafia said.
Aboulafia says competing against those locales may be a tall order for Fort Worth, but he calls Bell’s recommitment to North Texas solid. In the past, Bell moved some operations to Canada. He also says Bell needs to rebuild its commercial business, “They went from number one to three, before they were being number four at one point. Now they’re trying to get back there by targeting the oil and gas market, and they’re meeting with some success on that,” said Aboulafia.
Aboulafia says Bell is making a good faith effort to restore a great, but eroding, legacy. “They have maybe five to eight years of solid U.S. Marine Corps revenue. After that things get dicey. So they better do what they can to reinforce the civil market position and also generate exports with their military products, which have also lagged badly,” said Aboulafia.
The analyst says there’s not a lot of margin here. Bell expects its new headquarters will be finished in about a year and a half.
