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Helicopter orders will boost Erickson jobs

The Korean Forest Service has ordered two more Erickson S-64E helicopters for its firefighting fleet.

Erickson CEO Doug Kitani announced the deal that will stimulate local employment at the firm's Central Point plant on Friday.

The helicopters, known as K7 and K8, will be outfitted with Erickson's next-generation, performance-enhancing composite blades and are due for delivery by the end of 2019.

"It's meaningful," Kitani said. "It's fantastic news, and a great way to start 2018. It's going to mean growth for the company and growth in jobs here locally, and great for business certainly through 2019."

Kitani said there would be 50 to 100 new hires related to the project, pushing local employment to well over 400.

Korea was the first foreign government to order an S-64 in 2001 and its forestry service presently has three S-64s in its fleet, with K6 slated for delivery in August or September this year to replace a damaged helicopter.

"The Koreans get it," Kitani said. "They understand the value of the S-64 platform and how unique it is aerial firefighting. We need more customers like the Korean Forestry Service. They've done the analysis, they have fleets of other aircraft, they've done testing, they've done operational activities, and they keep coming back to just how powerful the S-64 is and how proven it is. Part of our challenge is getting more international customers to recognize it and embrace it the way they have. It is an investment."

The combined cost for the helicopters is roughly $50 million, although additional training and support work increase the total value.

"We'll do all the training with our instructor pilots and we'll train their maintenance crews," said Andy Mills, commercial aviation president.

Mills anticipates a ripple effect once other customers see the new S-64s perform.

"The sale to the Koreans is a forward step because these are the first aircranes delivered with composite rotor blades," Mills said. "K6 will be the first commercial aircraft, delivered outside our own fleet with composite main rotor blades. That takes the aircrane into the next performance level. That will have an impact on us and our operational fleet being hired for additional fire contracts around the world."

Kitani said the volume of serious interest in S-64s by domestic and international customers dramatically rose in response to the 2017 California fires.

"Obviously, it's international from a press perspective, people are aware of it," Kitani said. "There are dry, challenging fire-prone environments near major cities in France, Spain and Portugal."

Italy, Greece and Turkey are already long-term clients.

"The S-64 on a cost-benefit perspective is a tremendous asset that every aerial firefighting organization globally that has the resources to invest in it should seriously consider," he said.

If another order were to emerge in the near future, Kitani said Erickson would potentially sell one of its 20 existing helicopters and manufacture a replacement.

"We would have to look at the business case, but as least today would advocate back-filling by building another one," he said. "We're very good at maximizing the utilization of our fleet, but in the next couple of years we may forgo that but would construct another one immediately."

Kitani said Erickson will continue to pursue defense contracts and hopes to regain Forest Service work dropped when Erickson temporarily lost its Small Business classification.

"I told the folks at Central Point that Southern Oregon is the epicenter of the organization," Kitani said. "We have certain economies of scales and scope here. The challenge is to get the word out just how good our people are."

To that end, Kevin Cochie was named vice president and general manager of defense and national security sales and operations. He'll be based in Washington, D.C. He was a lieutenant colonel in the Army, deployed to Afghanistan and Iraq.

"He was also involved in Army legislative affairs," Kitani said. "He really gets how important it is to understand not only the aviation needs of commanders deployed globally, but how things happen in the Pentagon, but how things are funded, and how they're supported from a legislative perspective."

— Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness or www.facebook.com/greg.stiles.31.

Doug Kitani, the new CEO of Erickson, stands in front of a S-64 Aircrane in Medford on Friday. [Mail Tribune / Jamie Lusch]